Phoenix Coyotes Vote Passes Glendale Council; Team To Stay At Least One More Year

Phoenix Coyotes Vote Passes, But Goldwater Institute Ponders Lawsuit Again

Of course, you didn't think this would go away all that easily, did you?

Just as it seemed that the Phoenix Coyotes were out of the dark when it comes to playing in Glendale, Ariz. for the 2011-12 season, that pesky thorn in their side, the Goldwater Institute, says that a lawsuit over the $25 million payment from the City to NHL isn't out of the question.

GWI's Nick Dranias said that his organization still needs to do their homework on the issue, but he certainly didn't rule out the possibility of a lawsuit, questioning whether or not the payment is a subsidy to the NHL.

"The Arizona constitution clearly bans subsidies to private businesses," Dranias said on Phoenix's 12 News Tuesday afternoon. "The founding fathers saw that bailouts are a bad idea and they are illegal in this state"

Glendale mayor Elaine Scruggs argued at Tuesday night's city meeting, at which Council members voted 5-2 to fork over that $25 million to the NHL, that it's not a subsidy. Her argument was that it's an investment in the arena in and the area, because without the team, Glendale is stuck with a vacant, city-owned arena that will cost them much more than the $25 million.

"If that's true, they ought to be able to break down where those expenses are going. Are they going to preserve the team's operations -- for the Zamboni, for the ice rink, for the jumbotron? Or are those things for the lights and the heat and the air? The bottom line here is that if that payment is going to expenses that exist only because the team is there, it's a subsidy."

Dranias went on to say that his group is "absolutely" looking at the possibility of a lawsuit if they determine that the $25 million payment (and a separate payment of equal value to cover last season's losses) is a subsidy to the Coyotes and the NHL.

Glendale Council Vote Doesn't Guarantee On-Ice Success For Phoenix Coyotes

Phoenix Coyotes To Stay In Arizona At Least One More Year After Council Vote

The City Council in Glendale, Ariz. voted 5-2 on Tuesday night to fork over $25 million dollars to the National Hockey League to cover operating losses of the Phoenix Coyotes for the upcoming season, assuring that, barring any unforeseen circumstances, the team will stay in Arizona for at least one more season.

Of course, given the mayhem involved in this two-year long saga, there's no guarantee that things will now go smoothly from here on out.

Mayor Elaine Scruggs passionately defended the vote. The basis of her argument in extending $25 million more dollars to the NHL is that Glendale has a very real financial stake in the Coyotes and City-owned Jobing.com Arena, where the team plays.

Should the team pack up and relocate elsewhere, they're stuck with an empty building that cost them nearly $200 million to build and millions more to operate. By paying the extra $25 million, which is in addition to a similar payment given to the league just two weeks ago to cover team losses from last season, they keep people coming to the arena and the Westgate City Center near the arena.

They view it as investment, not subsidy to the league. In fact, they're getting a pretty good deal. The Coyotes lost a reported 36.6 million in 2010-11 and could lose that much or more in 2011-12.

There are legitimate gripes with the logic Scruggs and the five affirmative voters are using here, and several residents voiced their displeasure with it during the public comment portion of Tuesday's meeting. One such resident, George Sprankle, wore a pretty incredible USA flag shirt while holding a sign that said "NO NHL OR HULSIZER." Another compared the vote to socialism.

But the news is that for now, the majority of the council agrees with it, and as a result, the Coyotes are sticking around for one more season. If they can't be sold to a local buyer like Matthew Hulsizer in the next year, we'll be back here again, only relocation will be almost guaranteed in that instance.

Should that happen, the Glendale Council will have egg on their face, and that $25 million they voted to hand over tonight will be a complete waste. For now, though, they must hope that stable ownership can swoop in and keep them around to the point where they can turn a profit. 

They certainly share that hope with hockey fans in the desert. For more from those fans, check in with SB Nation Arizona and Five For Howling.

Phoenix Coyotes Vote Tuesday Could Also Impact Atlanta Thrashers Future

On Tuesday in Glendale, Ariz., the City Council will vote to dole out more money to keep the NHL-owned Phoenix Coyotes in their town for at least one more season. It would be a $25 million payment to the league to cover operating losses for the upcoming season, which would come in addition to the $25 million paid by the City a week ago to cover operating losses for the 2010-11 season.

By all local accounts, the vote is expected to pass, which will give the NHL the comfort it needs to keep operating the team beyond this summer, which it previously said it would not do. The thinking is that if they hold on to the team another year, it will buy the time to come to terms with Matthew Hulsizer, a businessman that would keep them at Jobing.com Arena for the long-term.

And thus, out of Winnipeg or any other locale -- at least for another year.

If the money isn't handed over from Glendale to the NHL, all bets are off and the team could very easily find itself in a new home sooner rather than later. But with all that the City has wrapped up in the team and the arena, which would go vacant should the Coyotes leave, it seems like a lock that they'll fork over the dollars.

Should that happen, True North Sports in Winnipeg could turn their attention elsewhere, according to a report in the Atlanta Journal-Constitution. You see where this is going. Could they look to purchase and relocate the Thrashers?

Via the AJC:

The Atlanta Spirit, owner of the Thrashers, Hawks and the operating rights to Philips Arena, have been looking for a buyer and/or investors and have said relocation is a possibility. Co-owner Michael Gearon Jr. told the Atlanta Journal-Constitution in February and again last week that there is a "sense of urgency" to find a solution to the financial losses suffered by the team. The Thrashers could fetch upwards of $170 million from True North with the NHL getting around $60 million as a relocation fee.

The Thrashers are not expected to be sold for that much to a buyer that would keep the team in Atlanta.

And that's really what it seems to come down to, right? Are the current owners more interested in getting top dollar for the Thrashers, or are they willing to take a bit less to keep them in town?

It's a little bit more complex than that, considering the group also owns the arena and it's written into their deal that should the Thrashers move, they'll lose money on the naming rights from Philips.

The answers seem to be in the math, and Atlanta Spirit looks like they could have a huge decision on their hands in the very near future.