When the new Canadian-led ownership group assumed control of the Phoenix Coyotes, it was full-speed ahead to get everything in order.
Hockey was taken care of thanks to general manager Don Maloney, but on the business side the new owners had two months from closing the sale until the season started. They needed to sell tickets, sell luxury suites and get a new concession agreement in place.
“It’s been a lot of work,” president and CEO Anthony LeBlanc said.
Less than two months later, LeBlanc didn’t have to do any work and got to simply smile when the NHL announced a 12-year, $5.2-billion Canadian exclusive-rights television deal with Rogers. The seven Canadian teams will benefit the most because they get a bigger chunk of the money, but it will help the Coyotes almost as much because, as LeBlanc said, “every dollar is important” right now for that franchise.
“League revenues that come to us are a big part of our numbers,” LeBlanc said Monday in an interview with The Canadian Press at the Inn at Spanish Bay, where the NHL board of governors were meeting. “We’d like to get to the point of being like the Rangers and the Leafs where we’re more revenue-driven through our own efforts, but the reality is in markets like our market, national-television deals are really important.”
Of course it didn’t come out of the blue. LeBlanc, George Gosbee and the rest of the ownership group figured something good was coming with the new Canadian rights contract. They just didn’t know how good.
“We didn’t feel that we were just buying the Phoenix Coyotes, we were buying 1/30th of the NHL,” LeBlanc said. “And one of the things that was always attractive to us was the potential of the TV deal. We thought that the TV deal was going to be a home run. I didn’t expect it to be a grand slam.”
This kind of windfall — US$4.9 billion spread out over 30 teams — helps everyone. More money in owners’ pockets isn’t something they’re complaining about.
Perhaps the rapidly rising salary cap is an issue to teams that traditionally spend only to the floor because the Rogers deal is expected to boost the cap significantly in the 2015-16 season.
Under new ownership, the Coyotes aren’t a floor team, and they’ve worked with the NHL on future cap estimations to make sure they were prepared.
“We don’t see any concerns. From our perspective we feel very confident,” LeBlanc said. “We anticipate it’s going to be quite a few years until the floor would reach that level that we’re at currently, and we’ve already baked in, again, in our model the ability to increase our spending year over year.”
The Coyotes don’t spend to the upper limit of the cap, but they’re not far off. According to CapGeek, Phoenix has a cap payroll of roughly US$61.9 million, close to the $64.3-million figure for this season.
LeBlanc said because the Coyotes are a middle-of-the-pack revenue-generating team, it makes sense that they’ll spend accordingly. Within the past year, Maloney extended goaltender Mike Smith and defenceman Oliver Ekman-Larsson with long-term, big-money contracts and signed big-ticket, free-agent centre Mike Ribeiro for four years, as well.
In the upcoming years, having money from the Rogers deal will help the Coyotes but not as much as their own TV contract with Fox Sports Arizona that also runs for the next 12 seasons.
“It’s substantial for us,” LeBlanc said. “It’s a long-term deal, and it’s significantly higher dollars than the franchise was getting paid before.”
Signing a 15-year Jobing.com Arena concession deal with Levy Restaurant Group also helped, and LeBlanc said that long-term agreements are important “because it indicates how devoted we are and committed to the market.”
In the end, the commitment to the Coyotes within the Phoenix market is more crucial to their long-term success than anything Rogers does.
“What is important for us to succeed is going to be putting butts in seats, selling our sponsorships and selling our suites,” LeBlanc said. “Does the TV deal help? Of course. But we will not be a successful franchise until we knock it out of the park on those three revenue-drivers. And we’re moving in the right direction. It may accelerate it by a year. Instead of it being three or five years, it might be three or four years. We’re moving in the right direction.”
The Coyotes are thinking long term but also about the near future. Deputy commissioner Bill Daly revealed in an interview with the Fan 590 in Toronto that the Coyotes were prepared to host an outdoor game next season.
With the Super Bowl at the University of Phoenix Stadium, LeBlanc thinks the Coyotes can follow what the NHL is doing in New York this season by showcasing outdoor hockey close to the NFL’s marquee event.
“It’s very attractive to us,” LeBlanc said of the possibility. “We’re trying to grow the brand of the National Hockey League in Arizona, which is a non-traditional market. Anything we can do that will help us accelerate growing that brand we’re going to do.”