Coyotes in advanced discussions with ASU to use new multi-purpose venue as interim arena solution

The Coyotes are in the advanced stages of discussions with Arizona State University and arena manager OVG Facilities (a division of the Oak View Group) to use ASU’s new multipurpose arena as their temporary home, sources familiar with the situation confirmed to PHNX Sports. The arena, which is scheduled for completion this fall, would serve as the Coyotes’ arena for all home games while they await approval and construction of their proposed arena along the south bank of Rio Salado in Tempe.

Per sources, the Coyotes are negotiating on a three-year deal with an option for a fourth year if construction of the permanent arena takes longer than hoped. ASU’s new arena will only seat 5,000 spectators so the venue is significantly smaller than other NHL arenas, or even Arizona Veterans Memorial Coliseum, which currently seats about 10,000 because some of its risers have been decommissioned and removed.

UPDATE: ASU CFO Morgan Olsen confirmed the talks with a statement on Thursday evening:

“If an agreement for use of our multipurpose arena is finalized, we would be glad to help the Coyotes by providing a temporary home while their new arena is built just a couple of miles away,” said Olsen, who is also ASU’s executive vice president and treasurer. “Our new multipurpose arena also would benefit from the addition of NHL-level enhancements paid for by the Coyotes that would remain with our building. We are beyond excited to open this wonderful new ASU arena. This agreement would just make it even more special.”

When asked about using an unconventional venue such as ASU’s, NHL deputy commissioner Bill Daly said the league is not opposed to such a move.

“While we have arena standards, we would approach the entire situation in a way intended to accommodate the club’s needs in effectuating a successful transition to a new venue,” Daly wrote in an email. “While there may very well be some, I can’t think of any hard and fast rules that couldn’t be relaxed to accommodate what is necessary.”

When asked specifically if the league would approve the Coyotes playing in an arena with a seating capacity as low as 5,000, Daly said it “depends on the totality of circumstances, but I wouldn’t rule it out.”

Due to NCAA compliance issues, the Coyotes would not be permitted to use Sun Devil hockey’s team areas. There are also specific league requirements for team areas so the Coyotes would have to build their own, without contribution from ASU, which does not need the extra areas or it would have already built them. One source estimated that cost between $15 and $20 million, with all of that money coming out of owner Alex Meruelo’s pocket.

Because of the necessary construction, the deal would have to be approved by the Arizona Board of Regents.

It’s still unclear how the NHLPA would feel about the decision, but the league and the NHLPA have begun discussions regarding the Coyotes’ plans for next season. There are issues with team-space requirements, revenue sharing and more that the PA will need to understand.

“The Coyotes’ anticipated move in 2022-23 from Gila River Arena in Glendale to a temporary Arizona venue raises a number of matters that the league and the NHLPA will need to work through,” a spokesperson for the NHLPA said. “Ideally, these matters will be sorted out well in advance of next season.”

Given the estimated cost of building team areas at ASU, the likely cost of necessary improvements at an existing practice facility, (the Coyotes are still exploring those options with the Ice Den Scottsdale a strong possibility), and the losses that Meruelo will incur by playing in front of smaller crowds at an arena that will not provide him with a lot of corporate sponsorship money or ancillary revenue, it’s fair to wonder why the Coyotes wouldn’t just spend the estimated $40 million to $50 million on renovations at the Coliseum where they could play and practice. 

For one, playing in Tempe would allow the organization to establish a partnership and relationship with the city immediately; one that the Coyotes hope will flourish in a central location much closer to the vast majority of their premium season ticket holders. There are also revenue issues at the Coliseum that would create financial losses for Meruelo. It does not have any luxury suites. ASU’s arena includes 20 luxury suites, two group suites, a large club lounge and event-level premium club seats. Because the Coliseum is a state entity, it would also require state approval. It’s unclear how long that process would take.

In addition, the time needed to make the improvements to the Coliseum would not allow the Coyotes to play there at the start of next season. The Coyotes could have begun those improvements sooner, but sources said that they were under the assumption that they would be able to continue their year-to-year lease with the City of Glendale. When it became clear that this would be their last season at Gila River Arena, it was too late to renovate the Coliseum as an option for next season. 

Scheduling will be another issue for the Coyotes. Sun Devil hockey’s schedule is already in place for the 2022-23 season and ASU hockey will maintain priority for all future dates, a source said. ASU has 24 home dates next season and all of them are on Friday or Saturday with 7 p.m. starts. The Coyotes would need to work around that schedule with some less than optimal dates.

The multi-purpose facility is also slated to host ASU’s wrestling and gymnastics teams, concerts, conferences, youth competitions and other events.

The City of Glendale, through arena manager ASM Global, has told the Coyotes that they must vacate Gila River Arena by June 30; the end of the fiscal year.

NHL commissioner Gary Bettman has remained steadfast in his assertion that the Coyotes will remain in Arizona. So has the Meruelo ownership group.

“Alex is committed, Alex has the resources, and the Coyotes aren’t going anywhere,” Bettman said from the NHL Board of Governors meetings in December. “Well, they’re going somewhere else other than Glendale, but it’s in the greater Phoenix area.”

The Coyotes released a statement after the PHNX Sports report.

“As we have said many times, we are completely committed to building our future in Arizona. As part of that process, we are excited to be exploring some great temporary arena options here before we move in to a new permanent home in the Valley.”

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