Monday, 21 March 2011

The Future Looks Bright for the Phoenix Coyotes

A long battle between the GWI (Gold Water Institute) and prospective Phoenix Coyotes owner Matt Hulsizer might finally be coming to an end. After several months of a stand-off between the two parties, it looks like the deal is going to move forward and Hulsizer will be able to purchase the Phoenix Coyotes and keep them in Glendale, Arizona.

Some quick facts about the deal:
  • The Coyotes will cost $170 million to buy
  • Hulsizer will pay $70 million
  • The City of Glendale will pay Hulsizer the remaining $100 million to help him buy the team.

The problems started a few months ago when the GWI declared that the payment of $100 million from the City of Glendale to Matt Hulsizer is illegal. To generate that money the City is trying to sell municipal bonds to investors. In return for the money, the City will receive, among other things, the rights to parking revenues at Arena and naming rights for the parking area.

What the GWI stress, beyond the fact that paying a businessman a “gift” of $100 million is illegal, is that the parking revenues will not cover the loss of that $100 million so the deal would be a bad one for the taxpayer. The GWI were threatening to sue anyone who purchased the bonds which pretty much froze any interest in the bonds. With no investors ready to buy the bonds, the City can't pay Hulsizer the $100 million and he can  not buy the team.

However, as stated earlier, things have finally started to move forward. During the first intermission of last night's game against the Chicago Blackhawks (a hard-fought, but disappointing 2-1 loss), Matt Hulsizer declared that of the $100 million he would be payed, the City would get $25 million back straight away. He also said, in a bid to move things forward and satisfy the “gift” clause that has been so problematic, that his party would cover the other $75 million, meaning that the City's taxpayers will pay nothing towards the deal and the City itself will still receive the rights to the parking revenues. 

Hulsizer (centre) watches the Coyotes at Arena.
 In addition to the above, Hulsizer and his party will be paying between $5 and $10 million to the City of Glendale every year. Although there is a sense that Hulsizer has given in to some of the GWI's demands, I think everyone who wants to see the Coyotes stay in Arizona will be happy with this news.

It is about time too.

Last night also saw Senator John McCain also being interviewed, along with former Attorney General Grant Woods, both of whom stated their support for Hulsizer and the deal that keeps the Coyotes in the desert for the long term future. In fact, the Senator stated that, “ It is to the greater good of the state of Arizona that the Coyotes stay here.” Strong words.

While I have to stress that the deal is not yet done, last night's news does mean that the GWI should back down and allow the bonds to be sold which will allow the deal to be completed.

The ball is back in the court of the GWI and we should be hearing from them very soon indeed.

Watch this space...

1 comment:

  1. Great article! So happy about the Coyotes staying!