More issues with potential Coyotes sale?
It seems there may be some potential problems concerning the two bids for the Phoenix Coyotes. Well, aside from the issues we already know about that’s held up the sale for so long.
Public-policy litigation ‘think tank’ the Goldwater Institute may have some serious concerns over the bids put in for the Coyotes, specifically the one by the Jerry Reinsdorf-led Glendale Hockey, LLC bid that signed a MOU late last week. The institute has threatened to file suit against the City of Glendale if it feels there is an unconstitutional move by the city in order to give incentives to a potential new owner in order to keep the team in town. As Goldwater puts it:
Several media reports have indicated that the City of Glendale intends to offer some form of taxpayer subsidy to a new owner of the Phoenix Coyotes as an incentive to keep the hockey team in Glendale. This is a potential violation of the Arizona Constitution’s Gift Clause.
As they are written now, the Reinsdorf deal raises serious legal questions. It puts a huge amount of risk on the city, whereas Reinsdorf takes on virtually none. It could be a contract without a give and take from each side, which would be illegal. Beyond that, the city might make substantial payments to support Reinsdorf’s ownership and still lose the team after five years.
These are just loose agreements between the city and the two bidders in order to get the process started on leasing the arena and purchasing the team from the NHL. In reading the two MOU’s there is certainly a disparity in how each side will approach payments of the team purchase and it seems that the Glendale Hockey MOU puts an incredible amount of pressure on the City of Glendale to be able to maintain a significant amount of revenue, else the team would up for sale once more in five years.
If the City of Glendale does side with Glendale Hockey, and this is the route the agreement goes without further amendments to appease the taxpayers, then a sticky situation will get even uglier.
There is one thing both sides agree upon: After sale of the team, the buyer will appeal to the NHL to change the name of the team to either the “Glendale Coyotes” or the “Arizona
Cardinals” (Sigh. Should read “Coyotes”.)