Inside the Arizona Coyotes Bankruptcy

Inside the Arizona Coyotes Bankruptcy

On June 10, 2015, news that the Glendale City Council had voted to end the Arizona Coyotes’ lease at Gila River Arena suggested the team was on the brink of relocation. Two weeks later, an agreement was reached to keep the Coyotes in Glendale — for now. This potential relocation saga has plagued the team since former owner Jerry Moyes first tried to sell it in 2008, culminating in the Arizona Coyotes bankruptcy of 2009, and its roots go back even further, all the way to the Coyotes’ first season in Arizona.

A Rocky Start in the Desert

The Coyotes arrived in style in 1996-97, posting a regular-season winning percentage over .500 in each of their first six seasons. This on-ice success came despite the problems at America West Arena, the Coyotes’ original home. Designed for the Phoenix Suns, the arena was never built with hockey in mind. After it was re-designed to accommodate an ice rink, the upper deck on one side ended up hanging over the ice, meaning a lot of the seats could only see one goal. This design flaw reduced available seating to 16,000 — one of the lowest capacities in the league. Attendance began dropping, and by 2001 the owners cut their losses and sold the team to local developer Steve Ellman.

Building a New Home in Glendale

It had been clear since 1996 that the Coyotes needed a new home, and Ellman had a plan in place even before he bought the team. In 2001, Ellman was in the midst of developing the Westgate City Center in nearby Glendale, Arizona. A hockey arena seemed like the perfect centerpiece for this project. The plan was finalized, and the Coyotes moved to Glendale during the 2003-04 season. With the new Glendale Arena open and running, Ellman had all he’d wanted from the Coyotes, and he sold the team to Jerry Moyes in 2005.

The Moyes Era Unravels

Under Moyes, the Coyotes’ situation went from bad to worse.

Mounting Losses On and Off the Ice

The team’s plan to host the 2006 All-Star Game was derailed when the 2006 Winter Olympics forced the NHL to cancel the event. The Coyotes finished the 2006-07 season with their worst record since relocating to Arizona. They acquired some high-level talent in the off-season and were competitive through the 2007-08 season, but they were still losing money — according to some reports, as much as $40 million a season.

The NHL Steps In

By late 2008, the team began receiving covert payments from the NHL to keep it solvent. Moyes secretly turned the operations of the franchise over to the NHL. Commissioner Gary Bettman started looking for other ownership options and worked out a deal to sell the team to Jerry Reinsdorf, who would keep it in Arizona. Jerry Moyes, however, had other plans.

The Arizona Coyotes Bankruptcy and Jim Balsillie’s Pursuit

Two Failed Attempts North of the Border

Fans of both the Pittsburgh Penguins and the Nashville Predators are familiar with the name Jim Balsillie. A native of Ontario, Balsillie has been obsessed with bringing a second team to the Canadian province since 2006, when he tried to buy the struggling Penguins. When that bid fell through, he turned his attention to the Predators in 2007; Predators owner Craig Leipold decided not to sign an agreement, and the team stayed in Nashville. Following both of these attempts, Commissioner Bettman made it clear he didn’t approve of a new team in Ontario, based mostly on concerns that it would oversaturate the hockey market in that area.

A Bid Amid the Wreckage

Nonetheless, when Moyes declared the Arizona Coyotes bankruptcy in 2009, Balsillie attempted to sneak in and make a purchase — despite the fact that, having ceded control of the club to the NHL, Moyes no longer even had the authority to make the initial bankruptcy declaration. The bid was ultimately rejected, but the fallout from the Arizona Coyotes bankruptcy continued to shape the team’s ownership disputes for years afterward.

NHL Ownership and On-Ice Resilience

Collapsed Sale Attempts

After Moyes was stripped of ownership privileges, the Coyotes became property of the NHL. A series of subsequent deals made between 2009 and 2013 — some of which would move the team, some of which would keep it in Glendale — all collapsed.

Success Under Dave Tippett

Despite the uncertainty surrounding their future, the Coyotes made a strong showing on the ice, returning to the playoffs in 2009-10 under the leadership of new head coach Dave Tippett, and making it all the way to the Conference Finals in 2011-12.

A Fan Base Caught in Limbo

The low number of season-ticket sales was cited by the city of Glendale as proof that the “Arizona experiment” has failed. City officials claim it shows Arizona isn’t interested in hockey. But this is a definite chicken-and-egg situation; fans won’t be as likely to commit to a team that might or might not be around the next season. The on-ice success from 2009 to 2012 did not help build a fan base. At this point, winning is not enough. The 2015 deal was an extension of agony, not a commitment from the city — and not enough stability to make anyone associated with the Coyotes, fans and players alike, feel very comfortable.