Commentary

Coyotes' future in Phoenix still cloudy

Updated: June 19, 2012, 2:29 AM ET
By Scott Burnside | ESPN.com

Phoenix CoyotesMatt Kartozian/US PresswireCoyotes fans will be cheering loudly if their team can get its ownership situation ironed out.

When the NHL's owners meet in Las Vegas Tuesday afternoon, it's almost inconceivable that the future of the Phoenix Coyotes, the team they have been keeping afloat for the past three years, will be almost as uncertain as it was when they rescued the team out of bankruptcy.

But that is -- more or less -- the situation that will confront league owners as they gather in advance of the NHL's annual awards ceremony set for Wednesday night.

Although league officials were confident at the start of this season that the 2011-12 season would be the final one in which the Coyotes would remain wards of the NHL state, the season has come and gone and the bottom line remains that every scenario imaginable, including relocation of the team before next season, remains a possibility.

With the 2012-13 schedule set to be released later this week, likely before the draft -- which begins Friday evening in Pittsburgh -- it's difficult to imagine the league would be able to relocate the Coyotes before the start of next season and that seems to be the most extreme of possibilities. But as with all things Coyotes, it cannot be ruled out.

As always, trying to predict the final outcome of the Coyotes' saga is a moving target, even when the target appears to have finally come fully into focus.

The city of Glendale has agreed to the framework of a management deal that would see the municipality pay potential owner Greg Jamison in the neighborhood of $300 million over the life of a 20-year deal or between $14 million and $20 million annually in management fees to keep the team in Jobing.com Arena.

That agreement has already been assailed by the conservative watchdog group the Goldwater Institute, which has filed suit to try to block the lease agreement. A court hearing is scheduled for Tuesday morning regarding the suit.

Still, Jamison remains the most viable option for keeping the team in the desert long-term and NHL deputy commissioner Bill Daly told ESPN.com Monday the league remains confident that at some point this summer it will turn ownership of the team over to Jamison.

"That's certainly our expectation," Daly said.

A number of sources close to the situation told ESPN.com they view the latest Goldwater effort to block the city's plans as a red herring. The public watchdog was in recent days unsuccessful in obtaining an injunction to stop the city council from voting on the management fee.

Instead, key observers believe the real issue is whether Jamison can assemble the funds necessary to buy the team from the NHL.

To date, Jamison has been unable to do so. Although league officials remain optimistic, others familiar with the negotiations told ESPN.com they are less optimistic Jamison can come up with the estimated $170 million needed to purchase the team.

That's where the issue becomes interesting for the NHL.

The city of Glendale has committed $25 million in public funds to the NHL to offset operating costs over the past two seasons while a new owner was being sought, thus delaying a potential relocation of the team.

The city has declined to commit such monies for the coming season, but because it has committed monies to go to management of the arena with the Jamison bid, the question becomes whether the league could access that money should it continue to operate the team in the absence of a deal with Jamison (or anyone else, for that matter).

It's unknown whether the city would agree to that, given that the original allocation was based on a 20-year lease with Jamison and not just a one-year stopgap expenditure as has been the case the past two years.

It's unlikely the NHL owners will greet paying more out of their own pockets to sustain this team for another season without any softening of the blow from the city with much enthusiasm. Similarly, it's hard to imagine Glendale ponying up another $25 million if for some reason the league isn't able to access the management fee to keep the team in town for one more year.

If that kind of standoff presents itself, it might prove to be the tipping point in having the league finally pull the pin and move quickly to relocate the team for the start of the 2012-13 season.

Quebec City remains a top alternative to Phoenix, although Seattle continues to be a market the NHL is interested in exploring. The lack of a suitable arena continues to be a major drawback to a Seattle relocation.

The other factor that adds to the uncertainty of the proceedings in Arizona is the upcoming negotiations over a new collective bargaining agreement between the league and the players. Many observers believe the start of next season might be delayed by labor talks, which would give the league more time for Jamison to pull the deal together or for the league to find another owner or maximize the profits of relocating the team.


Among other issues that will come before the board of governors Tuesday will be an update on collective bargaining. It's expected commissioner Gary Bettman and/or deputy commissioner Daly will outline the schedule for bargaining with the NHL Players' Association.

It's believed the two sides will begin meeting before the end of June. The owners will also get an overview of the business operations, including the fact the NHL has seen national revenues -- those generated through Canadian and American broadcast rights and the NHL's other enterprises -- rise by 173 percent since 2006, rising from $2.1 billion to $3.3 billion.

NHL Enterprises, which includes NHL Network, NHL.com, the NHL Center Ice cable packages, international interests and other events, has seen a 270 percent jump in revenues over that same period.

European revenues have started to take off in the wake of the NHL's initiatives at selling the game across the Atlantic, with revenues jumping 328 percent since 2011. There are plans to build a permanent European NHL office.

Although overall ratings for the recently completed Stanley Cup finals dropped compared with recent final series, the first two rounds of the playoffs, rounds in which every game was available on one of NBC's platforms, enjoyed a 17 percent increase in viewership over a year ago.

Owners will also hear about potential streams of revenue that league officials believe could generate $300 million in revenue in the next few years once a new collective bargaining agreement is hammered out. The owners will also be given an update on hockey operations and potential rule changes recently discussed by the competition committee. The competition committee recently agreed to ask the American Hockey League to adopt hybrid icing and the implementation of the so-called ringette line in the defensive zone, beyond which players must skate in order to complete a pass beyond center ice next season. The owners will also be updated on the sale of the Toronto Maple Leafs to a partnership of telecommunications giants Rogers Communications and Bell Canada.