Investigation into Coyotes reveals major dysfunction and crippling financial woes

An absolute bombshell of a report from The Athletic. How much longer is the NHL going to keep this team afloat?

HockeyFeed

Katie Strang of The Athletic has published a pretty damning report on the inner workings of the Arizona Coyotes under owner Alex Meruelo that has exposed the team for what it really is: a dysfunctional team struggling to pay even the most basic bills.

Worse than the financial concerns though are the allegations hurled against Meruelo who took over 95% ownership of the team in 2019. According to second hand reports from Strang, Meruelo regularly has verbal outbursts with employees.

From Strang's article:  

Outbursts from those at the very top of the organization were not uncommon; multiple employees detailed profanity-laced dressing-downs by Meruelo, whose vexation could be provoked by such commonplace matters as loss projections or mentions of how other teams around the league do business. (Meruelo envisioned himself as an owner in the mold of the Lightning’s Jeff Vinik but also bristled when compared to him.) Multiple employees said he barked at them if they called him “Alex,” insisting he be addressed as “Mr. Meruelo.”

I get it... the boss is full of himself. We've all had jobs like that, right? But in the Coyotes' case, the real problems seems to be dollars and cents. Meruelo and the Coyotes currently have a litany of lawsuits filed against them for non-payment. The team failed to pay its employees on time and even NHL players were getting late payments on their bonuses this past offseaason.

More from Strang:

Last March, shortly after the NHL shut down for COVID-19, Meruelo affirmed his commitment to paying employees through the end of the regular season: “We pride ourselves on treating all our staff and players like they are part of our family. … I value my team members and am committed to making sure that everyone remains safe, secure and part of our great team.” In April, the team announced it was furloughing half of its staff due to pandemic-related financial issues. In May, the Arizona Republic reported that promises to pay the arena’s part-time and hourly staff members had not been met. The team and arena management company, in response to the report, said they would “finalize our support plan that will be executed within the next 30 days.” The team then released a second statement later the day the report was published that said the club “provided their agreed upon contribution to Gila River Arena this week.” 
In July, after prospect Tyler Steenbergen did not receive his bonus on time, his agent, Rick Valette, sent a strongly worded email (the contents of which were shared with The Athletic) to the team over what he called a “serious breach” of contract. In September, The Athletic reported that a handful of players did not receive their signing bonuses on time. 
The NHLPA got involved, though the players’ association did not issue a formal grievance because the issues were quickly rectified. The union had previously been engaged with the organization over financial issues during the playoff bubble, as players were not issued per diem payments mandated by the collective bargaining agreement.

The worst part though is that even if the Coyotes started paying their bills on time they have absolutely destroyed their good will with business partners. 

Again from Strang:

The team’s relationships with corporate partners, vendors and suppliers eroded as Meruelo Group executives applied what appeared to be a specific strategy: call up the partner, vendor or supplier, and ask that entity to “work with them.” This was often the starting point of a process in which Meruelo’s associates would haggle over line items in invoices or portions of a contract; it was also not uncommon for Meruelo associates to use the threat of litigation as leverage to get out of paying outstanding invoices or to make payments at drastically reduced costs. Over the course of reporting this story, The Athletic identified and spoke with eight vendors with whom the Coyotes had outstanding or past due balances or negotiated their debt to a lower amount. 
“This is a group of people not acting honorably on the basis of business, not treating people and their partners with respect,” said one vendor. “If those are the borders that define a dumpster fire, then there is indeed a fire burning within the borders of this dumpster.”
“They default on a bill and then chisel you down to what you accept and then they pay you,” said one vendor. 

Suffice it to say that this report is absolutely blowing the barn doors off the Coyotes franchise. My only hope is that the NHL finally takes a deep look at this franchise and decides that the experiment is over. The fact of the matter is that this team has struggled since day 1 after arriving from Winnipeg. It's been propped up by Gary Bettman and the NHL for nearly 30 years now. Enough is enough.

For the full article from Strang, click below: