The unique arrangement is a hybrid between relocation and expansionGetty Images
The NHL Board of Governors today approved a multifaceted arrangement that will see the players, draft picks and hockey operations of the Arizona Coyotes transferred to a newly established franchise in Utah
purchased by Jazz owner Ryan Smith and his wife, Ashley, for the 2024-25 season. It also renders the Coyotes franchise owned by Alex Meruelo inactive and grants Meruelo an option to reactivate the franchise if he can facilitate the construction of an NHL-caliber arena in the Phoenix metro area within five years.
The unique arrangement is a hybrid between relocation and expansion. Technically, the league awarded Smith Entertainment Group a new franchise, and SEG has also purchased the Coyotes’ players, draft picks and hockey operations staff directly from Meruelo. Sources said the whole package cost SEG between $1.2-1.3B. The team will debut at Delta Center, the Jazz’s current home arena in downtown Salt Lake City, in October.
Meruelo, who received $1B in the deal, will retain the club’s IP and brand. If Meruelo meets certain conditions -- most importantly, building the suitable new arena -- the NHL would allow him to reactivate the Coyotes for an undisclosed fee.
The NHL’s capability
to broker the complex deal with Smith and Meruelo enables the league and its players to immediately move on from the
Coyotes' problematic arena situation without attempting to force an involuntarily sale of the franchise. Such an effort would have likely resulted in a protracted legal battle that the league preferred to avoid.
“As everyone knows, Utah is a vibrant and thriving state, and we are thrilled to be a part of it,” NHL Commissioner Gary Bettman said in a statement. “We are also delighted to welcome Ashley and Ryan Smith to the NHL family and know they will be great stewards of the game in Utah. We thank them for working so collaboratively with the League to resolve a complex situation in this unprecedented and beneficial way.”
Meruelo said, “I agree with Commissioner Gary Bettman and the National Hockey League, that it is simply unfair to continue to have our players, coaches, hockey front office and the NHL teams they compete against, spend several more years playing in an arena that is not suited for NHL hockey. But this is not the end for NHL hockey in Arizona. I have negotiated the right to reactivate the team within the next five years, and have retained ownership of the beloved Coyotes name, brand and logo. I remain committed to this community and to building a first-class sports arena and entertainment district without seeking financial support from the public.”
For Smith, the 45-year-old founder and CEO of software company Qualtrics, the league’s desire to escape an untenable arena situation in Arizona became an opportunity to receive a franchise years sooner than he might have through expansion and to avoid bidding against ownership groups in other markets.
Smith had been in informal conversations with Bettman for the better part of two years about bringing a team to Utah. SEG in January put out a statement asking the league to initiate a formal expansion process and making the case for Utah.
Smith told SBJ that shortly before last month’s NHL GMs meetings, the NHL approached him about whether it would be feasible for SEG to launch a franchise in October.
“The whole time [our focus] has been expansion, and then this option came up, and it's an opportunity for us to help solve a couple of situations,” Smith said. “We went right to work saying, ‘Is it even possible doing it in this timeframe?’”
But talks really heated up earlier this month -- not long before the first public reports last week about the relocation of the Coyotes to Utah being a possibility. While Smith acknowledged that the five-month window to prepare for the team’s debut next season will present myriad challenges, he views acquiring an NHL team as a can’t-miss opportunity.
“It'd be great to be able to say we're playing here in 2027, this is what it's going to look like, you have all the time to name, you have all the time to get the market ready,” Smith said. “But the reality is we want to be in the NHL, and I've just learned over time when these things come up, you're either in or you're out.”
What’s next in Utah?
The situation in Utah will allow the new franchise to drive more revenue than the Coyotes could in their 4,500-seat arena, but it’s still a work in progress. Delta Center, which was designed specifically for basketball, will seat approximately 12,000 fans in 2024-25, making it the smallest arena in the league. Some seats for NHL preseason games previously held at the facility have offered severely obstructed views of the rink reminiscent of the Barclays Center, where the Islanders played from 2015-20.
SEG’s goal is to eventually conduct a significant renovation of the facility as part of a larger mixed-use project in downtown Salt Lake City. Utah lawmakers in March approved a bill setting up the framework for SEG to work with state, county and city government on the project. SEG last week submitted a plan to the city for consideration.
Smith also acknowledged that while he’d prefer to keep the Jazz and his new NHL team downtown, building an entirely new arena elsewhere in the region is an option. There have been reports that SEG is nearing the purchase of land south of Salt Lake City.
In the short-term, SEG will do its best to make more modest improvements to the arena for next season, such as optimizing the seating bowl for hockey and upgrading locker rooms.
With a population of roughly 1.3 million, the Salt Lake City metro area is one of the smallest markets in North American pro sports. That hasn’t been a problem for the Jazz under the Smiths’ ownership, however, as the team has sold out nearly 300 consecutive home games. The city is also among the fastest-growing cities in the country, and its 2.8% GDP growth in 2022 ranked No. 7 in the country among major metros.
What’s next in Arizona?
The first step in Meruelo’s bid to build a new arena and bring the NHL back to Arizona would be winning an auction for a 95-acre piece of land (110 gross acres) in Northeast Phoenix on June 27. The auction is open to the public, and several experts on Phoenix-area real estate said they expect numerous bids for the highly desirable land just outside Scottsdale.
The Coyotes announced earlier this month -- before the relocation reports -- that the team planned to build a new $3B mixed-use development on the site anchored by an arena. Team President & CEO Xavier Gutierrez said the new arena could have been ready in time for the 2027-28 season, a timeline that was widely viewed as very ambitious. The five-year window Meruelo negotiated offers additional time for small delays.
While the Coyotes’ entire history in Arizona has been defined by instability, the situation snowballed under Meruelo’s ownership over the past two years, ultimately becoming untenable. Mullett Arena, the college hockey arena where the Coyotes have played their past two seasons, was supposed to be a stopgap home while Meruelo built a new arena in Tempe as part of a $2.1B mixed-use entertainment district. Tempe voters, however, shot down three ballot measures last May that were required for the Coyotes to proceed with the project. With the Tempe plan defeated, Meruelo and his leadership team faced substantial pressure to formulate a new plan to deliver a permanent home for the team in the Valley of the Sun.
When the Coyotes had yet to reveal an arena plan by the All-Star break in February, new NHLPA Executive Director Marty Walsh excoriated Coyotes ownership and called playing at Mullett Arena indefinitely “unacceptable.”
The Arizona State Land Department last month agreed at the request of the Coyotes to auction off the plot of state trust land in Phoenix. On April 5, the Land Department said the land eyed by the Coyotes would be auctioned off June 27. The Coyotes at that point announced plans to build a new $3B mixed-use development on the site after winning the auction, complete with renderings. Gutierrez said the new arena could be ready in time for the 2027-28 season, a timeline that was widely viewed as very ambitious.
Just days later, however, reports broke that the league was working on a deal that would see the Coyotes sold to Smith and relocated to Utah. That was last Wednesday.
