How a NO Vote Affects the Phoenix Sports Market

The ongoing drama that is the Arizona Coyotes continues. Last week voters in Tempe rejected three ballot measures that would have built a new entertainment district that would have housed a new arena for the embattled NHL franchise.

It was packaged as the ‘best arena deal’ in all of sports and surprisingly, the owner of the Coyotes was shocked and surprised at the outcome of the vote.

I wasn’t.

Why did the citizens of Tempe say no and what does this mean to Coyotes sponsors and, perhaps more importantly, sponsors of other major sports entities in the Valley?

Why Did Tempe Say No to a New Arena?

Tempe’s NO vote is a reflection of the current state of affairs between municipalities and the owners of professional sports teams. Whereas it’s initially very appealing from an economic development standpoint, hosting a sports team also creates an expense for the city.  

What we’ve seen from this franchise in the past seems to back the argument of good short-term gains versus bad long-term ramifications. 

But it’s important to note that it’s not unique either. The Diamondbacks and the City of Phoenix have had their differences as of late. It wasn’t that long ago that the Cardinals and the City of Glendale were at each other’s throats. I think every major sports team has bumped heads with their hosting municipality with the exception of the Phoenix Suns who seem to have figured out how to be symbiotic with their city partner by making a long-term commitment to remain downtown. The price tag for that was $230M. 

The real concern lies with the fact that once a stadium is built that a team is not necessarily committed to staying there for the long run. That creates a real challenge for cities. No one wants to build their own personal Westgate. 

So it’s not surprising to me at all that Tempe passed on partnering with a franchise that creates a long-term expense and has a history of challenges both on and off the ice.

What Does This Mean For Sponsors?

There’s a lot to unpack here (pun intended). 

Professional sports franchises are highly desirable. Look for other municipalities to send offers the Coyotes’ way (if they haven’t already). My money is on Houston but I wouldn’t be overly shocked to see the Coyotes go elsewhere, anywhere besides here. If you’re holding out for Mesa or Scottsdale to save the day, they won’t. They’ve been there and done that. Plus both municipalities lack the type of leadership it would take to get a viable deal done at this point. 

Obviously, a move would terminate any local sponsorship deals currently in place. If I was a competitor I’d have a list of current Coyotes sponsors on my desk with an in-depth analysis of the details of said sponsorship. I would be working those clients yesterday with opportunities from my team. Even if they don’t move right away, you still have a very untenable situation with a microscopic venue and an ongoing and unchanging murky future. 

If I worked at the Coyotes I’d be incentivizing local renewals in a highly creative way by strategies that co-promote with the team, help to drive attendance/viewership, and create value outside of the actual game. This is a time where there sales people really have to be their best. 

On the national sponsor front, a move would be at the very least temporarily beneficial. A new city, a new venue, and a new set of engaged fans would move sponsorship metrics in a positive way. The NHL has favorable protocols for teams in new cities that help them to become something the Coyotes have not been for a long time … competitive. 

Regardless, even the most passionate hockey sponsors should be actively renegotiating their current relationship with the team. You simply can’t be hitting deliverables with a 5,000-seat arena and anemic TV ratings.

The End Is Near…If Not Here Already

That’s unfortunate for all of us in the Valley who love hockey, love the Coyotes, and want to retain our four major professional sports footprint. So no, none of this is good news for anyone in this market. 

There’s plenty of blame to go around but it most certainly can be shared by the sports industry in general which has grown used to the unrequited genuflections from fans and the cities in which they reside. This might very well be a warning bell of sorts that publicly funded stadiums will be a thing of the past for owners who make millions, if not billions of dollars off their product. 

The departure of the Arizona Coyotes will not happen overnight. They are committed to staying in their current mobile home of a stadium for the 2024 season but look for an announcement sometime soon that has the team departing for Houston, Hartford, or some other city that sees the benefit of having a viable NHL franchise. I’d be stoked if it was Scottsdale or Mesa, but I just don’t see that happening. 

For the Valley, we’ll have learned a valuable lesson that having a franchise, regardless of the depths of its dysfunction, is better than having no franchise at all.

Want to learn more about what you should do if you’re a sponsor of the Arizona Coyotes? Send an email to ed.olsen@linedrivesportsmarketing.com or give me a call at 602.284.6722.