About a month ago, NHL commissioner Gary Bettman and his deputy Bill Daly visited Arizona Coyotes owner Alex Meruelo to discuss the subject of relocation.
The initial reception was not warm, according to a league source.
Meruelo, owner of the franchise since 2019, was focused on winning a land auction in north Phoenix to solve its long-standing arena problem and prepare it for the kind of success that has proven elusive during a turbulent 28-year history in the desert.
But as part of that conversation with the NHL’s commissioner and deputy commissioner, Meruelo was asked a question that ultimately set the wheels in motion on a deal that should see Coyotes players and operations staff hockey team transferred to Salt Lake City by the end of the year. This Week: Can you say for sure when a permanent arena will be completed to replace the temporary facilities at Mullett Arena?
Meruelo couldn’t.
Not with the myriad of problems and potential hurdles that accompany a project of this scale – from securing the land to developing it to securing the political support needed to complete construction on time.
The last two seasons have taken a toll on the Coyotes players and staff. Matt Dumba, traded from Arizona to Tampa Bay on March 8, recently said Athleticism that it felt like a “mental war” taking place in a 4,600-seat college, amid constant uncertainty about the team’s future.
Recognizing that the situation was becoming untenable, not to mention unfair, with no clear remedy in sight, Meruelo and the NHL began working on a complex agreement that will allow him to retain the Coyotes brand, logos and trademarks if he is concluded, according to league sources. The franchise would effectively be declared out of service. Meruelo is also expected to earn the right to bring an NHL expansion team back to Arizona if he gets a proper arena built within five years, while retaining his stake in the American Hockey League’s Tucson Roadrunners, who would become Utah’s AHL affiliate and could end up playing at Mullett Arena in Tempe, pending negotiations with the building’s owner, Oak View Group.
Under the terms of the deal under discussion, the NHL would pay Meruelo $1 billion for the organization’s hockey operations assets — the same expansion fee he would have to pay to bring a team back to the region. Phoenix – and then return them. to Salt Lake City owners Ryan and Ashley Smith of the Smith Entertainment Group for $1.2 billion, with the additional $200 million split among existing NHL owners, according to league sources.
Meruelo and the Smiths were not in direct contact during the negotiations. The NHL negotiates the entire deal.
Nothing’s done until it’s done, but the parties agree that it is best to try to complete the sale before the start of the Stanley Cup Playoffs on Saturday in order to not to overshadow the most important part of the NHL schedule, but obstacles remain. outside the weekend, according to sources.
Among them was specific language regarding the conditions Meruelo would have to meet and the time frame for obtaining contractual rights to a future expansion franchise in Arizona. What we know is that he will not be able to sell or transfer these rights. It will be up to them to practice on their own.
If the deal crosses the finish line, it will allow the NHL to sever its ties with a complicated and difficult Coyotes chapter that included a bankruptcy court battle, several different ownership groups and several failed arena projects .
Bettman is a strong advocate for maintaining a franchise in the fifth-largest metropolitan market in the United States, and for good reason. The minor hockey scene there is thriving – bringing Auston Matthews, Matthew Knies and Josh Doan, the son of Coyotes legend Shane Doan, to the NHL – and there is reason to believe the team could become a major generator of income in the right circumstances.
However, the league could only wait for these circumstances to materialize, especially after Tempe residents voted against a proposed entertainment and arena development proposed by the Coyotes in a referendum last May.
This left Meruelo back at square one in his quest for an NHL-quality setup. It also pushed back the time the Coyotes would need to play at Mullett Arena as a secondary tenant.
The sale and relocation agreement currently in progress represents the cleanest potential exit. Although the NHL’s constitution includes provisions allowing the league to pursue “involuntary termination” of a franchise, doing so would be a contentious route to take. Instead, they are working to get Meruelo to voluntarily part with the organization’s assets by paying him a price that far exceeds his entry threshold (around $300 million, according to Forbes) while leaving the door open for him to return to the club if he succeeds in having an arena built.
A source with extensive knowledge of NHL franchise issues considers this an unsatisfactory outcome for the NHL after years of supporting the Coyotes. “It resolves the potential litigation battle, but they are basically rewarding (Meruelo) for being an ineffective owner.”
There are certainly risks associated with moving to Salt Lake City, a significantly smaller market than the one they would be leaving. The team would move to a 33-year-old building at the Delta Center, at least temporarily, and the home of the NBA’s Utah Jazz features less-than-ideal sightlines for hockey and a capacity of about 11 000 people.
However, Smith said he was confident he would get a new facility built with Salt Lake City considered the favorite for the 2034 Winter Olympics.
Presumably, he will also be willing to invest in building a competitive roster to a degree that Meruelo never did. Under the terms of the deal under discussion, Smith would acquire the Coyotes’ players, coaches, trainers and hockey operations staff (with the business staff left behind). He would also get the organization’s impressive amount of capital — Arizona has 20 total picks in the first three rounds of the 2024, 2025 and 2026 drafts — and a clean cap sheet, free of bloated or ineffective contracts .
A decision would at least represent a clear step forward after years of skating in Arizona. This produced underlying tensions that erupted in early February when NHLPA executive director Marty Walsh publicly criticized the Coyotes for failing to take concrete steps to build an arena.
“The next deadline for me is tomorrow. The snow. It’s now,” Walsh said. “The last conversation I had with the commissioner was the owner was looking at land in the Arizona area. I don’t know where this is. I have my personal concerns about this. There was land in Mesa. There was land in Phoenix. There were three voting questions in Tempe. None of this came to fruition.
Coyotes players will be compensated for inconveniences related to a move and are expected to receive payments to cover expenses, transition to housing and a flat-rate moving fee if the Salt Lake City deal goes through, according to team sources. league.
In the meantime, all indications are that Meruelo will continue with his plan to win a June 27 auction conducted by the Arizona Department of State Lands Board of Appeals. Bidding for the parcel of land starts at $68.5 million.
Bettman said he was “reasonably confident” that Meruelo could carry out his plan.
However, after years of twists and turns, NHL executives have reached a point where they can no longer wait for a solution to the Arizona problem to emerge organically.
“We would have preferred to be in a new arena now,” Bettman said last month. “But there are some things that cannot be controlled. We would have preferred that the Tempe referendum had gone the other way, but that is not the case. So we make do with what we can manage. That said, we believe Arizona, and particularly the greater Phoenix area, is a good market for the NHL. »
With the Coyotes’ final guaranteed game scheduled for Wednesday night against the Edmonton Oilers at Mullett Arena, no one knows how long it will be before the NHL gets another chance to test that belief.
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