Glendale vs. the Coyotes - Tonight City council in Glendale, Arizona, is scheduled to meet tonight for a special meeting to vote on cancelling an arena management contract with the Arizona Coyotes. TSN Senior Correspondent Rick Westhead, who wrote about the Coyotes' continuing troubles last month, examines the process and possible ramifications of this meeting.

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City council in Glendale, Arizona, is scheduled to meet Wednesday night for a special meeting to vote on cancelling an arena management contract with the Arizona Coyotes.

Without the $225-million arena management agreement, the Coyotes' future in Arizona would be in jeopardy. In June of 2013, the NHL said went so far as to say the team might move to a different city in time for the 2013-14 season if Glendale did not approve the contract.

Glendale councillors agreed to pay the Coyotes $15 million per year for 15 years to manage the Gila Riva Arena, according to terms of a deal reached days after the NHL's threat.

The city was then to receive a portion of the revenue generated from the arena's operation. The Coyotes paid the city about $6.5 million last season, meaning the city's net loss on the arena was about $8.5 million.

According to a copy of Wednesday's special meeting agenda posted on the city's website, councillors are meeting at 9pm et for: "Discussion and possible action to direct the city manager and city attorney to cancel the professional management services and arena lease agreement between the city of Glendale and IceArizona Manager Co. LLC…and to pursue any and all other legal actions and remedies necessary to effectuate cancellation or termination of the agreement."

The NHL released its own statement on Wednesday morning regarding the actions taken by the city of Glendale.

"We have been advised by the Coyotes that the City of Glendale's contentions are without merit and we fully expect the Coyotes to continue to play at the Gila River Arena and for the City to continue to honor its obligations to the Coyotes. After everything that has transpired, it is extremely disappointing that the City of Glendale would do anything that might damage the Club."

Three sports investment bankers who specialize in NHL team sales told TSN it's questionable whether the Phoenix market is big enough to sustain an NHL team, particularly without the $15 million arena management agreement.

Last season, according to one source with a copy of the NHL's combined Unified Report of Operations, or URO, the Coyotes generated less than $25 million from ticket sales, while the average NHL team generated about $48 million.

"They may have a long term deal with Fox Sports, but it pays them next to nothing," the source said. To be sure, the Coyotes say business is booming.

During a June 4 radio interview, Coyotes part owner Anthony LeBlanc said that sponsorship revenue was up fourfold this season, season ticket sales for next season are up as well and that it's been "shameful" that the team has had to navigate the controversy.

On Wednesday, LeBlanc responded to the city's statement.

"There have been no negotiations whatsoever, in fact they wish there were and that's what this latest effort is all about, to try and force us to renegotiate a 15 year lease that was negotiated in good faith, less than two years into the term. We have no intention of doing anything in light of the provocative acts of the city."

At Wednesday's vote, councillors will need a majority vote of the seven-member council to cancel the arena management deal.

Gary Sherwood, a member who helped approve the deal in 2013, has allegedly informed other city councilors he does not plan to attend the meeting or phone in to participate.

Sherwood, who is facing a recall election in November, could not be reached for comment. Anna Lee, chair of the Recall Councilman Gary Sherwood Committee, told TSN she petitioned the elections department with more than 3,000 signatures because Sherwood has flip-flopped on major policy issues such as the arena lease deal since he was elected.

The departure of former city attorney Craig Tindall's from his position more than two years ago will be central to the argument to cancel the agreement.

Tindall was asked to resign as city attorney in February 2013 by mayor Jerry Weiers. He left his position on April 1, 2013, but accepted six months of severance, meaning he was on the city payroll through Oct. 1, 2013.

The city and Coyotes reached their arena management deal on July 2, 2013, when Tindall, who had gone to work for the Coyotes, was still being paid by the city. It's possible that the city in its vote Wednesday night will rely on state statute 38-511. That statute, which is included in the arena management deal, says that the state can cancel a contract within three years if anyone involved in negotiating or drafting the contract for the state or any public department, is an employee of any party to the contract (the Coyotes).

Sources say councillors who want to cancel the deal will likely argue that Tindall was working on the arena agreement before he left his job with the city in April.

Glendale Vice Mayor Ian Hugh has been the most vocal critic of the arena management deal in recent weeks.

He has argued for weeks that the Coyotes have steadfastly refused to disclose the financial details of an arena naming rights contract, even though the city has the right to 20 per cent of the revenue from the deal. In 2006, the Coyotes signed a 10-year, $30 million naming rights deal for the arena with Jobing.com, a local employment website.

Last August, the Coyotes canceled that agreement and signed a nine-year deal for naming rights with Gila River Casinos.

Financial terms have not been released, Glendale officials say, even though Hughes and others says taxpayers have a direct financial interest.

Coyotes spokesman Rich Nairn said any council members who say they didn't have the "deal points" of the agreement are either "lying or have amnesia."

Hugh said that during the May 26, 2015, council meeting he asked Glendale's finance director, city manager and city attorney if any of them have a copy of the naming rights deal.

All of them said no, Hugh said.

But in an interview with NBC Sports Radio 1060 AM on June 4, LeBlanc said it was "shameful" that the Coyotes have had to deal with the "unnecessary political headwinds" related to the controversy and added that no city councilors have asked the team for a copy of the naming rights deal.

"This is a blatant attempt to renege on a valid contract that was negotiated fairly and in good faith and in compliance with all laws and procedures," he said. "In the event the City Council initiates any action to revoke, repeal or otherwise rescind the agreement, the Coyotes will immediately take all actions available to them under the law against the City of Glendale."

Coyotes officials insist that the terms of the naming rights deal were discussed by city councilors during an in camera executive session meeting on Sept. 9, 2014.

LeBlanc said in the interview with NBC Sports Radio 1060 that some councilors confirmed to team officials that financial terms of the deal were discussed during that meeting - even though Arizona state law prohibits anyone who attends those meetings from discussing what is said during them. It's unclear whether the Arizona state's attorney office is aware of LeBlanc's comments.

The reason the naming rights deal is so important, Hugh said, is because the revenue seems to be falling well short of what was promised.

In a video posted on the Coyotes website and dated Aug. 13, 2014, Coyotes part-owner Anthony Leblanc said the deal with Gila River would generate, "north of $600,000 (per year)," worth of revenue for the city.

"When we went through the acquisition process last summer, we negotiated a number of revenue streams with the city of Glendale and one of them was of course them receiving a 20 per cent cut of the naming rights deal and we provided them with an expectation of what we thought that was going to be," LeBlanc says in the video. "We've been able to provide them and hit that number that we provided them which was north of $600,000 a year so we're very excited about that."

Glendale's monthly arena revenues and expenditures breakout, however, shows arena lease and safety and security agreements for the months since August 2014. The latest monthly statement, for the month ended April 30, 2015, shows no income in the month for naming rights, and $274,500 in revenue year to date.

Glendale's fiscal year end is June 30.

Nairn did not respond to a list of questions about the naming rights revenue. He did not reply to an email sent June 9 about Wednesday night's vote.

Last week, The Arizona Republic reported that an assistant Glendale auditor has resigned over her boss' changes to an audit of whether the Coyotes properly paid the city their share of hockey and concert revenue for Gila River Arena.

The arena audit for the 2013-14 fiscal year, which has been overseen by former NHL team executive Tony Tavares, was announced by the city nearly a year ago but has not been completed. A city official found that the changes to the audit were appropriate.