Yep, the Arizona Coyotes are in the news again because of off ice ownership issues. This time, IceArizona has confirmed how much money was lost in their first year of ownership.
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On Friday, IceArizona reported the losses to the city of Glendale, which came out to $34.8 million. Now, that’s a lot of money, but there were a few contributing factors.
So, let’s break it down.
There is a one-time fee and closing cost of buying the team that came in at $7.9 million. They had to factor in the total amount of buying out Mike Ribeiro’s contract which came in at $10.5 million. Last but not least, the actual losses from operating the team itself came in at $16.5 million.
Surprisingly, this is good news. The closing fee from purchasing the team could not be avoided. Ribeiro’s contract was an unexpected expense, but even still, this all came in under what IceArizona had projected.
Their projections were set at an operating loss of $20 million. IceArizona has always said that they have a plan laid out in which they feel will make the team profitable. These losses were expected to come, but, were also expected to be higher.
If my math is correct, $34.8 million is over halfway to the dreaded $50 million minimum required for the out clause. That’s only after one year, but again, not only did IceArizona plan for this, but they planned for it to be higher.
On Friday, Coyotes President and CEO Anthony LeBlanc was asked about the losses and told reporters,
"“People are going to focus on the out clause and talk about the $50 million. Based off what we said, I actually don’t know why people would be talking about it. This franchise is doing exactly what we said it would do when we purchased it. This is a viable market.”“We have seen solid increases in every revenue stream associated with the team, and this continued during the current season while we experienced less than a stellar performance on the ice. We always said this was a process; that it would take time. The terrific news is that we showed a better than expected financial result in our very first year. This shows we are clearly on a path to success.”“The out clause was a protection mechanism. It was a mechanism to be used only if success was not attainable. Our better-than-expected financial performance in Year 1 shows that success is well within reach.”"
LeBlanc said that they expect to lose money on the current season, but these losses will be much lower than the $16 million lost last season.
Again, this is all good news for the fans and the team’s future in Arizona. Everything is going better than planned. IceArizona is showing that the Coyotes can be successful with the right ownership group in place.
It should ease fan’s fears hearing about the flexibility with the out clause. Even if they were to hit $50 million, it wouldn’t automatically kick in and the team would be gone, as long as there are significant signs of improvement. Which there are.
LeBlanc also mentioned that ticket sales have met predictions.
LeBlanc noted that corporate sponsorships were a big part in better than expected numbers, but something else that has played an important role in the “positive” numbers is the attendance.
Yes, we all know Arizona has had attendance issues. Are they selling out every night? No, they aren’t. But the ticket sales continue to increase year after year. Despite the terrible play on the ice this season, people are still going to games.
The team is getting closer to turning a profit or at least breaking even. Something that those who are against the idea of the NHL in Arizona said would never happen.