Finally, after $50-million and who knows how much more was poured into the Phoenix Coyotes, Glendale Mayor Elaine Scruggs had her come-to-Jesus moment.
As a result, she fired the first shot in what looks to be a messy divorce from the NHL and happy marriage with Quebec City or Seattle or some other city.
During a city council budget meeting on Tuesday, Scruggs unloaded on the NHL, which she accused of misleading Glendale officials about the prospects of selling the Coyotes, particularly last year when Chicago businessman Matthew Hulsizer was interested. She also wants a refund on the money the suburban city put up to help cover this season’s losses.
Scruggs said there is no deal in sight to sell the Coyotes despite the NHL’s claims it is negotiating with multiple parties. Finally, the mayor said there is no way she will ever agree to a proposal to throw another $20-million at the NHL, dressed up as a management fee for Jobing.com Arena, to help it through yet another season if no owner is found.
What the city needs to do, Scruggs said, is demand its latest $25-million gift back from NHL commissioner Gary Bettman. He can keep $5-million, she said, we’ll use the rest to fix our horrendous budget problems and promise to pay the NHL back.
When Bettman was told of the request by Glendale city manager Ed Beasley, after much prodding from the mayor, he was said to have taken it “under advisement.”
NHL deputy commissioner Bill Daly said in an e-mail message he “would strongly deny and reject the suggestion that anyone from the NHL misled city council or the mayor. We have at all times been completely transparent with the City of Glendale.”
At the end of Scruggs’s tirade, Beasley said he did have something to report on the Coyotes, so city council needed to go into an executive session, which is not open to the public. Beasley said he expects the NHL to cut some sort of an agreement to sell the Coyotes quickly but offered no information on the prospective buyer or a price or, most important, whether Glendale would have to pony up any money for the club, which did not impress city councillor Phil Lieberman.
“What he said is what’s been said for months, that there may be two or more people working on it and he hopes there will be a sale or settlement or some action on the part of the NHL in two or three days,” Lieberman said. “Nothing more definitive than that. No names mentioned, no organizations mentioned. I keep hearing this same thing over and over again.
“Do I personally want to rush into a deal with anyone? Yes if they have cash and they are buying the Coyotes without expecting anything from the city. No if it’s the same old deal, will you give us $100-million up front or provide $100-million in five to 10 years and we’ll think about buying it. I don’t want any of that.”
The only prospective buyer who did not come to Glendale with his hand out was the much-reviled Jim Balsillie, who wanted to move the Coyotes to Hamilton. Thus it’s safe to say there are no prospective buyers looking to pay the NHL’s asking price of $170-million for a club that loses $20-million in a good year, plus pay the city a reasonable rent and not ask for a cut of the arena’s revenue.
The $25-million on which Scruggs would like a partial refund is supposed to be sitting in an escrow account. It is due May 2. The problem is, there is only $20-million in the account because the cash-strapped city was $5-million short. Scruggs indicated the city still doesn’t have it and won’t be getting it.
The mayor was also quite exercised about the fact the city does not control the escrow account. The NHL does. She discovered this recently when she told Beasley she wanted to get Glendale’s $20-million out of the escrow account. Only the NHL can do that, she was told.
Leaving aside the question of what the mayor should or should not have known about the deal with the NHL, this nasty shock seems to have been the wake-up call for Scruggs. She then teed off on the NHL in Tuesday’s meeting.
The NHL still holds all the cards, though, which is good news for the folks in Quebec, Seattle or wherever. Officially, Bettman and the NHL have been in position to move the Coyotes since Dec. 31, when a deadline for the city to find a local owner passed.
Now that Scruggs made it clear the league is going to be $5-million short at the very least when it comes to collect May 2 and the money tap is turned off for next season, those buyers Bettman talks about had better come up with some cold cash fast.
Otherwise, it’s au revoir Glendale and bonjour Quebec.