Arizona professional sports teams competing for stadium funding

The state of Arizona is home to a franchise in all four of the United States’ major professional sports leagues and three of those four teams are currently seeking new stadiums and competing for funding.

Three of the Arizona professional sports teams: the National Hockey League’s Arizona Coyotes, Major League Baseball’s Arizona Diamondbacks and the National Basketball Association’s Phoenix Suns have all made it known that they find their present accommodations unacceptable.

While the details of the complaints differ, the main point of contention is the same in all three cases. All three franchises argue that their current stadium situation harms their business.

The Yotes’, DBacks’ and Suns’ Beefs

The Coyotes, who are currently the anchor tenant of Glendale’s Gila River Arena, have been publicly displeased with their situation since 2015, when the city’s council voided the management agreement with the team that paid the Coyotes $15 million a year. The team also maintains that most of its fan base is closer to the Tempe area. In summation, the Coyotes aren’t necessarily discontent with Gila River itself, more its location and the terms of the lease with Glendale.

For the Diamondbacks, however, it’s all about the stadium itself. The team argues that the lease between itself and Maricopa County makes it the responsibility of the county to ensure that Chase Field is a “state-of-the-art” facility and claim the stadium in its current state is not that. Exactly what makes a stadium state-of-the-art isn’t clearly defined in the lease, along with which party gets to set that standard, creating tension between the team and the county.

The Suns may be in the least contentious situation of the three franchises, despite perhaps having the most legitimate beef. Talking Stick Resort Arena has been the team’s home since 1992, and hasn’t had any major renovations in that time. It’s the age of the facility that is the issue, and has the team subtly pressing for a new stadium.

All three teams are seeking the same thing, a new stadium, and all three are petitioning governmental powers in the state for it. The Suns have pressed the city of Phoenix, while both the Coyotes and Diamondbacks have taken their matters to court. The Coyotes have also been part of a bill that is currently in the Arizona state legislature, but seems unlikely to be enacted in its current state.

There is some data to support these claims. The Coyotes haven’t sold more than 81 percent of Gila River’s capacity in a season over the last five seasons and posted an operating loss of $8 million last season. The Diamondbacks have struggled even more to fill seats, as the highest percentage of capacity for them in the same time frame has been 55 percent. Many factors play into attendance figures and profitability, but the age, location and state of the facility being used are certainly three of those factors.

The reality may be, however, that none of the three may get what they are looking for anytime soon. The ironic thing is that they may partially have each to blame.

How the Coyotes, Diamondbacks and Suns are Hurting Each Other’s Cases

Perhaps the community and owners of these three franchises should have anticipated this. All three facilities – Chase, Gila River and Talking Stick Resort – opened within 11 years of each other to accommodate expansion and relocated franchises in Arizona. The introduction of these teams into the market not only created an ambience that had more options for sports fans in the state, but created a scenario in which those franchises are competing for the limited sport entertainment dollars in the state.

Phoenix Mayor Greg Stanton made a proposal last April that would have addressed the concerns of two of these three franchises in a fiscally responsible way, but the competitive nature of professional sports entertainment wouldn’t allow for it.

Stanton pitched the idea that Phoenix could use existing tax revenue to construct a new venue for the Suns and the Coyotes. Not only would the Suns get the new stadium they want, but the Coyotes would get out of their cantankerous relationship with Glendale.

Suns’ owner Robert Sarver has made it clear that he doesn’t want to share stadium revenue with a partner, however. Mixed-use basketball/hockey facilities (like Los Angeles, California’s Staples Center) work well elsewhere in the country, but it’s not hard to understand why this proposal isn’t ideal for them.

NBA teams like the Suns bring in hundreds of millions of dollars in revenue to counter operating costs of hundreds of millions of dollars as well. Being profitable requires every possible dollar of revenue. Additionally, the Suns have been in their own facility for the franchise’s entire life, and have gotten used to running their business without revenue sharing. Adjusting to operating on only a split of stadium revenues would be a big change.

It’s not dead, but if the Suns have any hopes of getting a dedicated facility, they will press for that as long as they believe it to be viable.

All three stadiums were built with public financing, and that’s what all three teams are seeking for new facilities. Complicating those petitions is the fact that public bonds are currently being paid off by taxpayers for Arizona’s Grapefruit League MLB Spring Training facilities and the Cardinals’ University of Phoenix Stadium. Adding even just one, much less three, new stadium project’s worth of bonds could prove difficult until those bonds are paid off. That won’t happen anytime soon, as the bonds on University of Phoenix Stadium aren’t set to mature until 2036.

There’s also an element that any parent with multiple children is familiar with that could come into play. If the governmental powers in Arizona give one of these three franchises a new venue, the demands of the other two will grow stronger. It might be more tempting for lawmakers to avoid that situation altogether.

Arizona is a market that neither MLB, the NBA nor the NHL want to give up on. The Cardinals – who have filled University of Phoenix Stadium to at least 96 percent of capacity since moving into the facility – have demonstrated what is possible. The television money is good, as evidenced by the Diamondbacks’ latest broadcasting rights contract.

The fact that all three franchises are pressing for the same thing at the same time, however, hurts the chances of any one of them garnering success. Convincing any two of them to wait their turn, and lose money in the meantime, may prove just as difficult.