Phoenix Coyotes deal with Glendale will come up short In the first year of a 15-year deal between Glendale and the Phoenix Coyotes, the money is coming up short, adding yet another expense for a city dogged by sports-related debt. As part of the $225 million agreement, which was signed by city leaders and the owner of the Coyotes in July to keep the team in town, Glendale expected to recoup $6.8 million this year from sources that include ticket sales, parking receipts and naming rights for the arena. But too few non-hockey events at the Jobing Arena and lackluster revenue from parking means the city likely will get just $4.4 million. Two City Council members already are calling to renegotiate the agreement with Coyotes owner IceArizona, but thats unlikely to gain traction with the majority of the council. Other members of the council say the deal just needs time and that losing the team would have been disastrous for nearby businesses. The city is expecting to recoup roughly $7.3 million next year. Still, Monty Jones, general manager of Jobing Arena, with Global Spectrum, the company that books events at the arena, said it had a successful year. Were continuously pushing to get new entertainment, whether it be sporting events or live concerts, Jones said. The council expected to collect revenue from 23 non-hockey events based on prior years, but the city will only collect revenue from eight this year under the new agreement. The arena hosted more events than that, but the city did not collect revenue from events that did not sell tickets, such as a cheerleading competition and other charitable events, said Tom Duensing, Glendales financial services director. Jones said the company hopes to book more events next year. The agreement does include a partial safety net — an escrow account funded by an additional surcharge on tickets — that Glendale will dip into to make up some of the difference, but that will still leave the city with onlyabout $5.3 million, according to estimates by Duensing. Strong fan support The citys low return is not an indication of weak fan support for the Coyotes, however. Despite increased ticket prices and new parking fees, average attendance at games was 13,776, up by more than 1,300 more fans from its last full season. The team had seven sellouts and even broke the single-game record for revenue three times. That put Glendale on target for money coming from ticket surcharges at hockey games. But the dearth of non-hockey events meant that, overall, the city has collected about $1.4 million less in ticket surcharges than was expected. Parking revenue was a significant problem. Parking revenue at hockey events came far closer to the target but the overall total came up short. Leaders had expected to collect $2.2 million in a full year, but the total is about $1.3 million short of that, not counting revenue from the final few games. The reasons for the parking shortfall are numerous: Duensing attributed the cause to the dearth of non-hockey events. But one reason cited earlier this year could further strain the already frayed relationship between Glendale and its other major sports team. In January, Anthony LeBlanc, president and CEO of IceArizona, told The Arizona Republic that the Arizona Cardinals had bled city revenue by opening lots at the neighboring University of Phoenix Stadium during arena events. The Cardinals charged half as much as the Coyotes for parking in some circumstances and attracted 100 vehicles for weeknight hockey games and about 300 for weekend games against high-profile hockey opponents, said Cardinals spokesman Mark Dalton. City leaders have noticed, and they arent happy about the Cardinals actions. Councilman Gary Sherwood suggested last week that the city consider blocking off a road to make it more difficult to access those lots during arena events. Councilman Manny Martinez said such a move probably has crossed most of our minds. Coyotes spokesman Rich Nairn wrote in an e-mail that the team has a great relationship with the Arizona Cardinals and that LeBlanc would not have further comment. The Cardinals Dalton, however, reacted strongly to city officials comments. Councilman Sherwood seems to be suggesting that the city use its governmental powers to restrict the rights of private property owners competing in a business in which the city itself has a direct financial stake, Dalton wrote in an e-mail. That would be an improper use of governmental authority and runs contrary to the American principle of free enterprise. But the Cardinals parkingis not the only problem. Fans can find about 3,000 free spaces in the Westgate Entertainment District, which is the shopping and entertainment plaza outside the arena. Proceeds from naming rights for the arena have also brought in far less than was anticipated by city leaders. City finances The agreements shortfall comes as city leaders talk of slowly turning a corner to take Glendale out of years of crippling financial problems. Duensing said the city wouldnt change next years budget based on this years returns, predicting that Global Spectrums first year at the arena would be the most difficult for bringing in a lot of events. The arena already has five events booked for next fiscal year, but Jones would not address Duensings prediction about the current year. When the city entered into the deal last year, Mayor Jerry Weiers voted against the agreement, likening it to stepping out in front of a bus without knowing whethersomeone was there to pull you back. azcentral/story/news/local/glendale/2014/05/27/coyotes-deal-glendale-will-come-short/9654953/
Posted on: Wed, 28 May 2014 17:10:33 +0000
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