CXL - UPDATE 12/9 - Coyotes settle bills after unpaid taxes come to light

[TheGreenTBer]

Is relocation ever going to be okay to talk about with the Coyotes?

That 100% depends on the outcome of the Tempe proposal. If it's funded, they're in Arizona for the long haul. If not, they will be relocated out of state after this year. My gut says it gets funded but my gut isn't worth much.

 

[mouser]

Is relocation ever going to be okay to talk about with the Coyotes?

Mod: If there is a credible media report about potential relocation then perhaps this thread or another thread will handle that topic.

Absent that, this thread is for discussing the Arizona Coyotes in Arizona. Turning this thread into a relocation debate will only derail and detract from the thread’s purpose—especially when there’s no new development to discuss like now.

 

[aqib]

Just saying this…

The current business model of the Coyotes being a tenant in an arena they don’t control or own doesn’t work. Anywhere.

That began back when Steve Ellman and Jerry Moyes dissolved their partnership with the result splitting the Coyotes off from Westgate. Moyes didn’t care… but the Coyotes gave him a asset to exploit just to prop up his other businesses.

I’m digressing a bit there, but the result was Moyes’ antics put the Coyotes into a financial chasm that they’ve been trying to crawl out of since.

Since that point there has been multiple ownerships with numerous (and somewhat entertaining) methods to get some sort of additional income that we both can agree the franchise needed. But that’s the problem.

You can’t put the Coyotes and Westgate back under the same tent. That chance was permanently lost when Bob Parsons bought Westgate (for half of what the Coyotes are currently worth) and he’s not going to give it up.

Neither IA nor Barroway had the ability to buy Westgate. Meruelo could have. But he came along too late.

IA had a lease agreement that could have allowed them to stay at GRA but they blew it in regards to how they we’re keeping their financial records (and hiring Glendale’s former city attorney).

You should be aware that in spite of Glendale cancelling that original lease, ever since then the city had been trying to get a new long term lease with the Coyotes. With IA, Barroway and finally Meruelo. Problem with that is (as I stated at the outset) it doesn’t work in this day and age of pro sports.

Now SMG for you might have been a better alternative but it’s been quite clear that GRA was having serious trouble drawing non-sporting events in that era. Glendale went with ASM because they thought it would help keep the Coyotes there.

So a couple of things I am curious about. Ellman used the Coyotes to get Westgate off the ground and then dumped the Coyotes. Meruelo is leveraging the Coyotes to get his mixed use development off the ground. What's his incentive to keep the Coyotes once the rest of the development is off the ground. Especially if the housing is for sale and not rental. Once he has sold off the apartment and leased out the office space what is the need to keep absorbing losses for the Coyotes?

 

[Knights2017]

So a couple of things I am curious about. Ellman used the Coyotes to get Westgate off the ground and then dumped the Coyotes. Meruelo is leveraging the Coyotes to get his mixed use development off the ground. What's his incentive to keep the Coyotes once the rest of the development is off the ground. Especially if the housing is for sale and not rental. Once he has sold off the apartment and leased out the office space what is the need to keep absorbing losses for the Coyotes?

To be honest, it would probably be easier for him to get the land without a hockey arena/s as part of it.. If his play was just a development he could've found it in arizona without buying the team.

 

[StreetHawk]

To be honest, it would probably be easier for him to get the land without a hockey arena/s as part of it.. If his play was just a development he could've found it in arizona without buying the team.

What’s the point of funding an 18k arena and competing with the Suns arena for events that is what like 30 minutes or so away? Seems that space would be better served for something else unless that’s to be used for AZ state sporting events.

 

[TheLegend]

So a couple of things I am curious about. Ellman used the Coyotes to get Westgate off the ground and then dumped the Coyotes. Meruelo is leveraging the Coyotes to get his mixed use development off the ground. What's his incentive to keep the Coyotes once the rest of the development is off the ground. Especially if the housing is for sale and not rental. Once he has sold off the apartment and leased out the office space what is the need to keep absorbing losses for the Coyotes?

Understand what you’re angling at, BUT.

The arena is part of phase one. It’s going to be one of the first places to open and he’s pretty much paying for it. That’s a key difference from Westgate where Ellman got Glendale to build the arena up front and then took too long to get the rest of Westgate up and going.

The recession hit at that time and that cost Ellman most of his large Westgate tenants when they backed out.

Ellman’s long game was also to unload everything once Westgate was built out after ten years. Meruelo is in for the long haul.

 

[GordonGraham]

Depending on which venue they choose, what's the timeframe of all the work that will need to be done to get it at NHL level ( ice, dressing rooms.....)

Any options beside those and have some them officially been ruled out ?

Chase
Footprint
Veterans
ASU
Prescott
Tucson

Whats the latest they can wait to get a lease somewere April ? June ?later than that?

 

[mouser]

So a couple of things I am curious about. Ellman used the Coyotes to get Westgate off the ground and then dumped the Coyotes. Meruelo is leveraging the Coyotes to get his mixed use development off the ground. What's his incentive to keep the Coyotes once the rest of the development is off the ground. Especially if the housing is for sale and not rental. Once he has sold off the apartment and leased out the office space what is the need to keep absorbing losses for the Coyotes?

One big question is how much will the gambling license and associated sports book in the new development turn out to be worth?

 

[aqib]

One big question is how much will the gambling license and associated sports book in the new development turn out to be worth?

That's the X factor, my opinion (and again its just my opinion) is that the gaming market saturates pretty quickly once the novelty wears off. We've seen it with casinos all over the country. So after a couple of years I don't think their will be enough gambling business to support all the sports books the will be up in Arizona.

 

[aqib]

Understand what you’re angling at, BUT.

The arena is part of phase one. It’s going to be one of the first places to open and he’s pretty much paying for it. That’s a key difference from Westgate where Ellman got Glendale to build the arena up front and then took too long to get the rest of Westgate up and going.

The recession hit at that time and that cost Ellman most of his large Westgate tenants when they backed out.

Ellman’s long game was also to unload everything once Westgate was built out after ten years. Meruelo is in for the long haul.

So that's part of my question. Are these condos or rental apartments. If they are condos and he sells them off, what's the incentive to hang on to the team.

 

[TheLegend]

So that's part of my question. Are these condos or rental apartments. If they are condos and he sells them off, what's the incentive to hang on to the team.

Actually do not know that part. Right now they call them “housing units”.

There’s a lot of details to this proposal missing (including how the bonding part fits into the equation) and I’m waiting on it like everyone else.

 

[sh724]

So that's part of my question. Are these condos or rental apartments. If they are condos and he sells them off, what's the incentive to hang on to the team.

Obviously we have no idea what the development is going to look like if/when it gets approved. Its possible Tempe includes a stipulation in the agreement that indirectly force Muerello to continue to operate the team for the foreseeable future.

Tempe could require a long term lease with a punitive buy out which would basically force the Yotes to be in the arena. Yes Muerello could technically try to sell the team but the likelyhood of anyone else buying them and not operating the arena is pretty slim.

As mentioned above there is also the sports book angle. I agree the market may become over saturated, but with AZ limiting the licenses to 20 any over saturation will be limited. Also have to factor it doesnt appear all of those will be issued and several of those will not be in PHX. Its possible Muerello's license becomes the most profitable in the state, its also possible it never makes any money. I am sure Muerello's people have run the numbers on the value of the license.

There is also the flip side of the coin, why would he sell the team at all? There is plenty of land out there that cities want developed that doesnt require owning an NHL team. If Muerello's goal was to build the arena then sell the team its probably not a good long term plan. Based on some of the losses being reported it would make substantially more sense for him to just sell the team now and develop something else

 

[aqib]

Obviously we have no idea what the development is going to look like if/when it gets approved. Its possible Tempe includes a stipulation in the agreement that indirectly force Muerello to continue to operate the team for the foreseeable future.

Tempe could require a long term lease with a punitive buy out which would basically force the Yotes to be in the arena. Yes Muerello could technically try to sell the team but the likelyhood of anyone else buying them and not operating the arena is pretty slim.

As mentioned above there is also the sports book angle. I agree the market may become over saturated, but with AZ limiting the licenses to 20 any over saturation will be limited. Also have to factor it doesnt appear all of those will be issued and several of those will not be in PHX. Its possible Muerello's license becomes the most profitable in the state, its also possible it never makes any money. I am sure Muerello's people have run the numbers on the value of the license.

There is also the flip side of the coin, why would he sell the team at all? There is plenty of land out there that cities want developed that doesnt require owning an NHL team. If Muerello's goal was to build the arena then sell the team its probably not a good long term plan. Based on some of the losses being reported it would make substantially more sense for him to just sell the team now and develop something else

Well if he is 100% funding the arena and everything goes bust and the team goes Chapter 22 (restructuring industry term for Chapter 11 twice) in theory Tempe wouldn't be owing anything on the arena so they could just be like "all right go, hey ASU want a free arena?"

I am sure his people ran the value of the license, but we see in a lot of new industries lots of people enter the industry. Lots of capital flows in and then eventually there are too many players. The winners do well and the losers fold up shop. I am seeing it with pot stores in Ontario. There are too many and some are closing as the novelty of legal pot fades. We saw it with search engines, travel sites, etc. That's why I wonder if each sports book in Arizona will make it.

 

[TheLegend]

Well if he is 100% funding the arena and everything goes bust and the team goes Chapter 22 (restructuring industry term for Chapter 11 twice) in theory Tempe wouldn't be owing anything on the arena so they could just be like "all right go, hey ASU want a free arena?"

I am sure his people ran the value of the license, but we see in a lot of new industries lots of people enter the industry. Lots of capital flows in and then eventually there are too many players. The winners do well and the losers fold up shop. I am seeing it with pot stores in Ontario. There are too many and some are closing as the novelty of legal pot fades. We saw it with search engines, travel sites, etc. That's why I wonder if each sports book in Arizona will make it.

You’re overplaying the sports book angle
(Arizona btw is still breaking records for volume)

It’s not going to be an end all his debt thing. It’ll be just another revenue stream along with whatever he gets from renting spaces around the district he controls.

 

[sh724]

Well if he is 100% funding the arena and everything goes bust and the team goes Chapter 22 (restructuring industry term for Chapter 11 twice) in theory Tempe wouldn't be owing anything on the arena so they could just be like "all right go, hey ASU want a free arena?"

I am sure his people ran the value of the license, but we see in a lot of new industries lots of people enter the industry. Lots of capital flows in and then eventually there are too many players. The winners do well and the losers fold up shop. I am seeing it with pot stores in Ontario. There are too many and some are closing as the novelty of legal pot fades. We saw it with search engines, travel sites, etc. That's why I wonder if each sports book in Arizona will make it.

If he declares bankruptcy and Tempe takes over the arena then we just recycle everything that previously happened. The league takes over the team and sells it to whomever who then signs an arena management contract with Tempe. The state pulls his gaming license forcing that closure of that business. Then no one in Phoenix ever does business with him again. Its really not a good long term plan.

 

[Bondurant]

Since there was someone that doubted gambling would work in Arizona (because it's a desert or something):

Arizona Generates $777M Of Handle In First Two Months Of Sports Betting

 

[TheLegend]

While we're waiting for some more details of the proposal I did some poking around and found this on Phoenix Sky Harbor's page on the project.

This was the Coyotes' presentation to the Phoenix Aviation Board last November 29th. The link is to the PDF file containing the slides used and it adds a little more definition in how Meruelo has done his homework, including some items the Coyotes have agreed to in respect to Sky Harbor's concerns and outlines how the project fits right into all he established safety parameters Sky Harbor and FAA already had in place.

https://www.skyharbor.com/docs/default-source/pdfs/rio-salado-project/paab-presentation-(111721).pdf

His FFA Consultant comes with quite a pedigree....

George D. Williams – President |

 

[aqib]

Since there was someone that doubted gambling would work in Arizona (because it's a desert or something):

Arizona Generates $777M Of Handle In First Two Months Of Sports Betting

Its not sports betting won't work, it was a question about would all the sports books continue being profitable long-term after the novelty of legal sports betting wears off. Even the article says:

Arizona’s strong start, aided by the popularity of NFL wagering in general and the Cardinals in the thick of the NFC West race as well as the reigning NBA Western Conference champion Phoenix Suns entering the new year with a 27-8 record, makes it a near certainty the Grand Canyon State will be the fastest to $1 billion in handle when the Department of Gaming releases its November numbers.

If the proposition is that having a sports book is what will keep the Coyotes afloat, its not heresy to wonder if they will capture enough sports gaming revenue to do it.

 

[Bondurant]

Its not sports betting won't work, it was a question about would all the sports books continue being profitable long-term after the novelty of legal sports betting wears off. Even the article says:

Arizona’s strong start, aided by the popularity of NFL wagering in general and the Cardinals in the thick of the NFC West race as well as the reigning NBA Western Conference champion Phoenix Suns entering the new year with a 27-8 record, makes it a near certainty the Grand Canyon State will be the fastest to $1 billion in handle when the Department of Gaming releases its November numbers.

If the proposition is that having a sports book is what will keep the Coyotes afloat, its not heresy to wonder if they will capture enough sports gaming revenue to do it.

Sports betting is big business. If there is sports, there is betting. Smart move to keep it in house with our proximity to Vegas.

My comments were directed at the constant goal post moving and a silly comment about gambling in the past. Doubt there is anyone that ties gambling to the success of the Coyotes but it is definitely important to Meruelo as gambling is his bread and butter business.

 

[Llama19]

Its not sports betting won't work, it was a question about would all the sports books continue being profitable long-term after the novelty of legal sports betting wears off. Even the article says:

Arizona’s strong start, aided by the popularity of NFL wagering in general and the Cardinals in the thick of the NFC West race as well as the reigning NBA Western Conference champion Phoenix Suns entering the new year with a 27-8 record, makes it a near certainty the Grand Canyon State will be the fastest to $1 billion in handle when the Department of Gaming releases its November numbers.

If the proposition is that having a sports book is what will keep the Coyotes afloat, its not heresy to wonder if they will capture enough sports gaming revenue to do it.

However...Meruelo may have a sportsbook license...but he has yet to obtain a sportsbook partner...and is losing out on all of this revenue...

 

[aqib]

Sports betting is big business. If there is sports, there is betting. Smart move to keep it in house with our proximity to Vegas.

My comments were directed at the constant goal post moving and a silly comment about gambling in the past. Doubt there is anyone that ties gambling to the success of the Coyotes but it is definitely important to Meruelo as gambling is his bread and butter business.

We all know its a big business but doesn't mean everyone that enters the business is going to make it. Cell phones are a big business but when is the last time you saw a Palm phone? Or made a call on Alltel?

The bottom line is every scenario in which the Coyotes survive in Arizona is predicated on them being kept afloat by something else (other events at the arena, surrounding development, or sportsbook). Each one has a hole in it and yes people have pointed to the sportsbook license as something that would mitigate the losses from the Coyotes. My point is simply that there maybe too much competition for that to work out for the Coyotes.

 

[aqib]

However...Meruelo may have a sportsbook license...but he has yet to obtain a sportsbook partner...and is losing out on all of this revenue...

ha so the other players are already establishing themselves without him being in the market...

 

[Llama19]

ha so the other players are already establishing themselves without him being in the market...

Wonder what took so long...as a third of the season is over...

Arizona Coyotes enter sports betting landscape with digital presence

"With Arizona Coyotes ownership already in the resort and casino business, the team didn't have to look far for an official sports betting partner to take advantage of the large market in Arizona since it became legal last year.

Majority owner Alex Meruelo and his Meruelo Gaming, LLC, which is an affiliate of the two casinos he owns, the Sahara Las Vegas and the Grand Sierra Resort in Reno, Nevada, on Wednesday announced along with the Coyotes the launch of SaharaBets, an online and digital sports betting platform that will be available for download on Jan. 12."

Source: www.azcentral.com/story/sports/nhl/coyotes/2022/01/05/arizona-coyotes-partner-sahara-enter-into-sports-betting-business/9096102002/

 

[aqib]

Wonder what took so long...as a third of the season is over...

Arizona Coyotes enter sports betting landscape with digital presence

"With Arizona Coyotes ownership already in the resort and casino business, the team didn't have to look far for an official sports betting partner to take advantage of the large market in Arizona since it became legal last year.

Majority owner Alex Meruelo and his Meruelo Gaming, LLC, which is an affiliate of the two casinos he owns, the Sahara Las Vegas and the Grand Sierra Resort in Reno, Nevada, on Wednesday announced along with the Coyotes the launch of SaharaBets, an online and digital sports betting platform that will be available for download on Jan. 12."

Source: www.azcentral.com/story/sports/nhl/coyotes/2022/01/05/arizona-coyotes-partner-sahara-enter-into-sports-betting-business/9096102002/

I am sure there are some fees to pay in order to get started and they were just late paying them due to some "human error"

 

[Llama19]

A little different take on the sportsbook 'partner' from the Phoenix Business Journal...

Arizona Coyotes owner launches his own sportsbook app

To quote:

"Even if there is money to be made, it is clear that it costs a lot of money to operate in this sports betting marketplace. Sportsbook operators have spent millions of dollars on advertising, promotions and free bets in hopes of gaining customers. Arizona bettors received $57.2 million in free bets and site credit in September and October. according to data from the state’s gaming department.

The high cost of customer acquisition has turned off some operators. With some companies willing to pay such high cost to get consumers, some competitors have decided to take a step back. Matt Maddox, the CEO of Wynn Resorts (Nasdaq: WYNN), said the Arizona market is “not sustainable right now.”"

Source: www.bizjournals.com/phoenix/news/2022/01/05/arizona-coyotes-owner-launches-his-own-sportsbook.html