Last week the City of Glendale completed a multi-year, $50 million payment to the NHL concerning the status of the Arizona Coyotes.
The debt between Glendale and the NHL stems back to one of the most tumultuous periods in the Coyotes’ history. In 2009, the team–then known as the Phoenix Coyotes–was put into bankruptcy by owner Jerry Moyes. After a dispute involving several parties, the NHL reached an agreement to buy the Coyotes.
Since the team had been eyed for a move to Hamilton, ON during this time period, the NHL worked out an agreement with the City of Glendale to lease Jobing.com Arena (now Gila River Arena) and keep the Coyotes in Arizona. One of the terms of that agreement was that Glendale would pay the league for operating the arena and assist in covering the franchise’s debts, with the two years the NHL was at the helm of the Coyotes prompting a total of $50 million.
Glendale paid the league over a period of several years, and recently announced that its final payment was completed. More from the Glendale Star:
“Per the agreement dated Sept. 20, 2013, the final $5 million payment from the city into the escrow account occurred yesterday, Sept. 20, 2016 (defined in the agreement as the third anniversary date),” said Assistant City Manager Tom Duensing. “The NHL can withdraw the final $5 million payment from the escrow account on or after Sept. 20, 2017 (defined in the agreement as the fourth anniversary date).”
Council held a special meeting Sept. 20, but went directly into executive session for, “consideration and possible action regarding final escrow payment to the (NHL).”
While the league cannot withdraw the money from the account until Sept. 2017, Duensing said, “any and all accrued interest belongs to the city,” but he wasn’t sure the amount of interest that would be accrued on the escrow account.
Duensing said the interest, which had been approximately $7,500 since fiscal year 2011-12 through FY 15-16, is payable to the city.
“The ability for the NHL to withdraw the final $5 million one year after the city deposit and the fact that any interest goes to the city is simply part of the Sept. 20, 2013 escrow agreement,” Duensing said. “If the payment were made directly to the NHL, there would be no deposit made to the escrow, and therefore, no interest earned and paid back to the city.”
The payment was based on the number of years the NHL owned the team. Essentially, Glendale paid $25 million each for both the 2010-11 and 2011-12 seasons.
