In 2010, the city of Glendale, Arizona, found itself in the center of a financial storm as it quietly began subsidizing the money-losing Phoenix Coyotes, a professional hockey team. This news, uncovered by local reports, sent shockwaves through the local community and beyond, given the city’s simultaneous struggle to plug its own budget deficit. As the Coyotes faced financial instability, Glendale stepped in, offering significant concessions to keep the team afloat.
The revelations raise important questions about the economic role of sports franchises, the long-term impact on municipalities, and the delicate balance between local government spending and the financial well-being of sports teams. As other cities look to attract or retain professional sports teams, Glendale’s experience with the Phoenix Coyotes serves as both a cautionary tale and a case study in public-private financial relationships.
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The Origins of Glendale’s Bailout for the Phoenix Coyotes
The Phoenix Coyotes, a franchise that had struggled both on the ice and financially, became the subject of municipal financial support when the city of Glendale allowed the team to operate rent-free at the Jobing.com Arena (now Gila River Arena) for seven months. According to documents obtained by 12 News, this rent-free arrangement, which took place between 2009 and 2010, provided the Coyotes with an estimated financial break worth $4 million over the course of a year.
The financial deal was seen as necessary at the time, as the Coyotes were hemorrhaging money and were at risk of folding or relocating. For Glendale, the stakes were high, as the city had invested heavily in building Jobing.com Arena specifically to host the Coyotes. The arena was a centerpiece of the city’s sports and entertainment district, and losing the team would have been a devastating blow to Glendale’s efforts to create a vibrant economic hub in the West Valley.
The Impact of the Glendale-Coyotes Deal
While the deal temporarily kept the Coyotes in Glendale, it did not come without costs. Glendale was already grappling with its own financial issues, facing a multimillion-dollar budget deficit. The city’s decision to bail out the Coyotes raised eyebrows, especially as local governments across the country were tightening their belts in the wake of the Great Recession.
At the time, Glendale officials justified the financial support as a way to protect the city’s investment in the arena and the surrounding development. They argued that allowing the Coyotes to fold or relocate would have left Glendale with a vacant arena and a potentially devastating impact on local businesses that relied on game-day traffic. Furthermore, the city’s leaders believed that retaining the Coyotes would eventually lead to increased tax revenue and job creation as the sports district around the arena continued to grow.
However, critics of the deal pointed out that the city’s financial support for the Coyotes amounted to a corporate bailout at a time when Glendale’s residents were facing cuts to essential services. Some questioned whether the city could ever recoup the money it was spending to keep the Coyotes afloat, particularly given the team’s continued struggles to attract fans and turn a profit.
Economic Impact of Sports Franchises: A Broader Debate
The situation in Glendale is part of a broader debate about the economic impact of professional sports franchises on local economies. While proponents argue that sports teams create jobs, generate tax revenue, and serve as a catalyst for local development, opponents contend that the benefits are often overstated.
In many cases, the economic benefits of sports franchises are concentrated in the hands of team owners and developers, while the costs are borne by taxpayers. Stadium construction, infrastructure improvements, and direct subsidies often require public financing, but the promised economic returns—such as increased tourism, job creation, and business development—frequently fall short of expectations.
The case of Glendale and the Coyotes highlights this tension. The city’s investment in Jobing.com Arena and its subsequent financial support for the Coyotes were intended to spur economic growth in the West Valley. However, the long-term impact of these investments remains a topic of debate.
Glendale’s Larger Financial Picture: The Super Bowl and Other Investments
One of the key arguments in favor of Glendale’s investment in the Coyotes was that the arena would not only serve as the team’s home but also attract other major events, including concerts and sports tournaments. The arena played a central role in Glendale’s successful bid to host the Super Bowl in 2008, a move that was expected to generate millions of dollars in economic activity for the city.
However, as with the Coyotes deal, the financial impact of hosting the Super Bowl was less clear-cut. While the event brought thousands of visitors to Glendale and put the city in the national spotlight, it also came with significant costs. Hosting the Super Bowl requires substantial investments in security, infrastructure, and other city services, and some analysts questioned whether Glendale’s long-term financial gains from the event would outweigh these costs.
In the years since, Glendale has continued to invest in its sports and entertainment district, attracting other major events such as college football bowl games and concerts. However, the city’s financial struggles persist, and the question of whether these investments will ultimately pay off remains unanswered.
Lessons for Other Cities
Glendale’s experience with the Phoenix Coyotes offers important lessons for other cities that are considering investing in sports franchises or hosting major sporting events. While professional sports teams can bring economic benefits, these benefits are often uncertain and difficult to quantify. Cities must carefully weigh the costs and risks of such investments against the potential rewards.
One of the key takeaways from Glendale’s experience is the importance of transparency and accountability in public-private partnerships. In the case of the Coyotes, the city’s financial support for the team was not widely known until documents were obtained by 12 News. This lack of transparency fueled public skepticism about the deal and raised concerns about the use of taxpayer dollars to support a struggling sports franchise.
Another lesson is the need for cities to have a long-term plan for economic development that extends beyond a single sports team or event. While sports franchises can be a valuable part of a city’s economy, they should not be relied upon as the sole driver of economic growth. Instead, cities should focus on creating a diverse and sustainable economic base that includes a mix of industries and sectors.
Conclusion: Did Glendale Make the Right Bet?
As of today, the Phoenix Coyotes (now rebranded as the Arizona Coyotes) are still playing in Glendale, but the team’s financial struggles continue. While the city has managed to keep the team in place for now, the long-term economic impact of its investment remains uncertain.
For Glendale, the decision to bail out the Coyotes was a high-risk, high-reward gamble. On the one hand, the city succeeded in keeping the team and its arena operational, which has helped to support local businesses and maintain the sports district’s viability. On the other hand, the financial costs of this decision have been significant, and it is unclear whether the city’s investment will ultimately pay off.
Looking ahead, Glendale and other cities must continue to grapple with the complex economics of professional sports. While sports franchises can bring excitement, jobs, and revenue to a city, they also come with risks and challenges that must be carefully managed. In the case of Glendale and the Coyotes, only time will tell whether the city’s bet on professional hockey was a winning one.
I wonder if Glendale ever made back the money they spent on getting the Super Bowl. Well, you know what they say about other people’s money.
