Arizona Coyotes make deal that keeps Phoenix options open

When the Glendale City Council voted unanimously Friday to amend its lease with the Arizona Coyotes, it may have provided a short-term resolution to the ongoing issues between the municipality and the National Hockey League team.

But many believe the new deal is merely a precursor to the team moving elsewhere when the two-year lease expires.

Preliminary discussions have already taken place about the possibility that the Coyotes will become one of the anchor tenants, along with the NBA's Phoenix Suns, in a new arena in downtown Phoenix.

There is also preliminary interest in building a new facility for the two professional teams in Scottsdale that would be part of an existing gaming resort and Major League Baseball spring training facility, a source told ESPN.com.

Team CEO and part-owner Anthony LeBlanc said after Friday's vote that the Coyotes are happy to put the lease issue to bed, and he hopes the two sides can work on a longer-term lease arrangement in the future. But LeBlanc also noted the short term of the new lease agreement that was voted on Friday leaves the team little option but to start considering other options for the team.

"We've bought ourselves some breathing room," LeBlanc told ESPN.com Friday.

The two sides can operate now without pressure heading into the 2015-16 season, but if a year from now the city and the team haven't decided on a longer-term lease arrangement, that will turn up the heat on finding a Plan B for the team.

"A year from now, if there's no long-term deal we will be in significant conversations (about playing elsewhere)," LeBlanc said.

Phoenix Mayor Greg Stanton immediately reached out to the Coyotes and the Suns when the city of Glendale first announced in June that it wanted to strike down the 15-year, $225 million lease signed by the municipality with the NHL team two years ago. He was hoping to broker a deal that would see the Coyotes move into Talking Stick Resort Arena downtown (formerly known as US Airways Center), where the Suns currently play, rather than relocate out of the region, which would have been within their right pending league approval.

The short term of the new lease agreement in Glendale means such a partnership is still very much on the table even if the urgency has been lessened with the new arrangement.

Phoenix councilman Michael Nowakowski said everyone is pleased the team and Glendale have come to an agreement that will keep the team in Glendale short term, but he was cautious about appearing to be angling to poach a neighboring city's sports team. But Nowakowski reiterated the Suns have been looking for a new building in Phoenix for some time, and having a facility that could accommodate both an NHL and NBA franchise would be ideal from the city's perspective.

"We need to hold our options open to make sure the new arena's designed to where hockey could fit into that equation," Nowakowski told ESPN.com.

If the Coyotes and the Suns want to enter into some sort of partnership, "that's welcomed," he added.

One of main issues confronting the Coyotes since moving to the municipally funded arena in Glendale in 2003 has been the distance the bulk of the team's fan base has to travel from Scottsdale and Phoenix to get to games. Many feel the team would be far more successful if it was located in Phoenix, where it played when the team first relocated from Winnipeg after the 1996 season, even though the arena where the Suns play is not ideal for hockey.

Scottsdale would also be a more desirable geographic location for the team, and there is some preliminary interest in building a new arena that would expand the Talking Stick Resort, which is currently home to the spring training facilities of Major League Baseball's Arizona Diamondbacks and Colorado Rockies at Salt River Fields in Scottsdale.

One source familiar with the local sports marketplace told ESPN.com that the new lease agreement in Glendale has the potential to be a "gold lining" for the Coyotes long term if they can find a better geographic location in a new building when the current lease expires.

Another source told ESPN.com the new lease agreement sets the table for possible improved options for the team outside of Glendale.

Glendale was looking to get out from under a $15 million annual payout to the team as a management fee for the life of the lease and argued the team had breached conflict of interest language in the agreement by hiring two former city employees to work for the team.

The team and the NHL both publicly denounced the municipality's move as having little legal basis, but ultimately the uncertainty over the Coyotes' status in Glendale in the short term was hampering their ability to do business, including re-signing current players and free agents, which led team officials to work with Glendale officials to rework the deal.

The deal saw the team reduce its management fee from $15 million annually to $6.5 million in return for receiving all of the hockey-related revenue streams from the arena, including parking revenues and ticket surcharges as well as residual fees from the naming rights to the Gila River Arena.

Based on last season's numbers, the new deal would have seen the team receive between $1 million and $2 million less than it made under the previous deal, and projections for this year's revenues put the difference to the team at less than $1 million under the terms of the new deal compared to the old.

Many in the hockey world were surprised that the municipality asked for just a two-year term. The new lease also erases an out clause in the original lease that would have seen a payout to the municipality of $15 million if the team opted out of the lease after five years and $50 million in losses accrued over that time.

Under the terms of the current lease the team can walk away without paying anything to the municipality -- another factor that suggests the team will be leaving Glendale at the end of the lease, assuming a suitable alternative presents itself in the area.

As for what the city's plans might be for the arena at the end of the two-year lease if the Coyotes move on, one source told ESPN.com that it's believed the city is looking at a minor pro hockey team. However, it's difficult to believe any league would relocate to the Phoenix area if an NHL team is still nearby, unless that minor pro team is directly tied to the NHL team, which isn't likely to happen in Arizona.

Although the short term of the lease will lead to more speculation that the Coyotes will relocate to another location like Quebec City, which recently was one of two teams to submit a bid for a potential expansion team, LeBlanc was very clear that he still sees the team's future in Arizona.

"We know that hockey works in the Valley and we are committed to Arizona for the long-term," LeBlanc said in a release announcing the new lease arrangement.

Of course, what is notable is that the release mentioned "Arizona," not specifically "Glendale."

It is a subtle distinction, perhaps, but a distinction that suggests the new lease agreement isn't nearly the end of the Coyotes' story when it comes to finding a permanent home in the desert or elsewhere.