Over the past 26 seasons, the Arizona Coyotes have at times been bankrupt, ownerless, a ward of the NHL, the subject of relocation rumours and, more recently, in a prickly relationship with the owners of their home arena. The team has long struggled to draw fans to its suburban rink, even with Wayne Gretzky as its coach for four years, and it has never contended for the Stanley Cup.
This month, the Coyotes may have reached a nadir. Glendale, Ariz., threatened to lock the team out of Gila River Arena in the middle of its season because Alex Meruelo, the team owner, owed US$1.3-million in unpaid state and city taxes and arena operating costs from last season.
The City of Glendale, which was owed about US$250,000 in taxes, had told Xavier Gutierrez, the Coyotes’ chief executive and president, that it would cancel the team’s business license if the total amount was not paid by Monday.
Before the deadline, but not before the Arizona Department of Revenue put a tax lien against the Coyotes’ parent company, IceArizona Hockey LLC, Meruelo paid US$1.3-million to state officials and ASM Global, the company that manages Gila River Arena for the city.
On Dec. 9, the morning after the Coyotes received a letter from city manager Kevin Phelps, the team released a statement blaming the unpaid bills on “human error.”
However, the NHL’s most persistent headache and, at US$400-million, the least valuable of its 32 franchises, faces even bigger problems. The Coyotes will be without a home at the end of this season with no alternative in sight.
Glendale, a suburb of Phoenix, has made it clear since August that it is tired of wrangling over unpaid bills. Phelps says the relationship between the team and the city is over when its lease expires June 30, 2022.
“We’re going to continue to work hard to protect the interests of our taxpayers,” Phelps said. “We will not hesitate using every mechanism and tool that we have if they are not meeting their end of the obligation. I hope that the NHL and the team, in particular, know that when I say that they don’t think that I am bluffing.”
He said that the Coyotes are current on their bills through December but will owe about US$4-million by the end of June.
“We decided we weren’t going to wait until the kids were out of high school to get the divorce,” he added.
Relocation is a notion more than a practical solution. Quebec City and Houston have both been floated before as potential homes for the Coyotes. Both cities have arenas fit for the purpose. In Houston, the Toyota Center is owned by Tilman Fertitta, who also owns the Rockets of the NBA.
“The Coyotes aren’t going anywhere,” NHL commissioner Gary Bettman said last week after the league’s annual board of governors’ meeting wrapped up in Palm Beach, Fla. “They’re going somewhere else other than Glendale, but they’re not leaving the greater Phoenix area.”
However, Bettman, who has long been intransigent on the subject, also said that he planned to meet with representatives of the Quebec government in January, but he brushed aside questions.
“Other than scheduling the meeting, I don’t know what the specifics are of what they want to talk about other than at 10,000 feet we can all figure that out,” he said.
The Phoenix metropolitan population of almost 5 million is the 10th-largest in the United States, and the 11th-largest Nielsen TV market.
Neither an NHL spokesperson, or Bill Daly, the league’s deputy commissioner, responded to emails seeking comment and further clarification of Bettman’s remarks. The Coyotes also declined to comment.
Meruelo, 57, bought a majority share of the team for US$300-million in 2019. The California-based businessman is said to be a billionaire with interests in media, real estate and casinos, including the Sahara Las Vegas.
It will cost a lot of money to keep the Coyotes in the Phoenix area. The goal of Meruelo and Gutierrez is to finance and build a US$2-billion arena and entertainment district with hotels, restaurants, retail and residential components in the city of Tempe, which is on the east side of Phoenix, in time for the 2025-26 season.
In the meantime, they must find an alternative arena while the Tempe project goes through the approval and building process. Alternative venues are either unsuitable or require millions of dollars to be brought up to NHL standards.
The Tempe site is on city-owned land and requires remediation of a large landfill site before it can be developed. Phelps thinks this could take as long as six years before the arena is ready.
In the meantime, the Coyotes, currently the worst team in the NHL with only five wins, need somewhere to play next season. Robert Sarver, who owns the NBA’s Phoenix Suns, the WNBA’s Phoenix Mercury and their Footprint Center, the only major arena aside from Gila River, has rejected several approaches over the years about taking in the Coyotes.
The hockey club has two choices, both expensive. They are talking to the Arizona Diamondbacks of Major League Baseball about building a permanent ice rink at Chase Field. The logistics of placing an ice surface in a baseball stadium that seats 48,405 fans are awkward at best; ask the Tampa Bay Lightning.
The other choice, suggested by the NHL, is to build a temporary structure in either the East Valley or West Valley.
One thing is clear: the Coyotes will not remain in Glendale. Phelps wants a deal richer than the US$500,000 the team currently pays in annual rent, but the city manager said he is more focused on the value the Coyotes bring.