SBD/Issue 195/Franchises

Reinsdorf Group Submits $148M Offer For Coyotes In Court

Reinsdorf's Group Submits
$148M Offer For Coyotes
A group headed by White Sox and Bulls Chair Jerry Reinsdorf entered a $148M offer for the Coyotes in U.S. Bankruptcy court Friday night. The group, known as Glendale Hockey, also includes Arizona attorney John Kaites and will be joined by former Nationals President Tony Tavares and other equity investors. The offer is $64.5M less than RIM co-CEO Jim Balsillie offered when he proposed to buy and relocate the Coyotes to Hamilton in early May. Reinsdorf's bid, which will not exceed $148M, would see Glendale Hockey renegotiate more than $127M in claims from secured and unsecured creditors. The offer also calls for a new Jobing.com Arena lease with Glendale. The claims to be renegotiated include: $79.7M owed to Michael Dell's MSD Capital (secured creditor), $38.8M owed to the NHL (secured creditor), $5.6M owed to Aramark Sports and Entertainment (unsecured creditor), $3M owed to the city of Glendale (unsecured creditor), $355,000 owed to AEG Facilities (unsecured creditor) and $320,000 owed to FS Arizona (unsecured creditor) (Tripp Mickle, SportsBusiness Journal). The GLOBE & MAIL's Waldie & Shoalts reported "any additional amounts" of club debts up to the $148M maximum would "go toward other unsecured creditors but not" Coyotes Owner Jerry Moyes. The offer is "conditional on Reinsdorf reviewing the club's finances and being 'satisfied with the results of such investigation.'" An NHL source close to Commissioner Gary Bettman said that league officials are "confident" that U.S. Bankruptcy Judge Redfield Baum "will find the offer acceptable even though it is far less than Balsillie's bid." The source: "The way it's structured, it really takes care of all the unsecured creditors except Moyes, who isn't really an unsecured creditor" (GLOBE & MAIL, 6/27). In Toronto, Kevin McGran notes if the sale to Reinsdorf's group is "denied, another auction would be held in September for buyers like Balsillie who want to move the team." Balsillie spokesperson Bill Walker: "We've just received the new offer. We will need time to study it. But we wish Mr. Reinsdorf well, he is a fine professional sports owner. Jim Balsillie's effort to purchase the Coyotes and relocate the team to Hamilton continues" (TORONTO STAR, 6/27).

GREAT ONE TAKING A HIT: The GLOBE & MAIL's Allan Maki wrote Coyotes Managing Partner and coach Wayne Gretzky is "being rubbed face-first against the glass; his character and allegiances called into question by those who want a seventh NHL franchise in Canada and believe it is the Great One's obligation to make it so." Gretzky, "whether he cares to admit it," is "involved in the Phoenix situation and his opinion can sway others." If Gretzky "were to tell ... Bettman, 'Hey, I love Phoenix but this team needs to go,' then rest assured the league would be moving heaven and ice to find the Coyotes a new locale." But instead the NHL is "fighting to stay in Arizona while Mr. Gretzky is content to avoid the issue by saying how much he would like to see an NHL team in both Phoenix and Hamilton" (GLOBE & MAIL, 6/27).

Writer Questions Coyotes'
Chances Of Survival In Phoenix
TEMPORARY FIX: In Vancouver, Ed Willes wrote it "appears Reinsdorf has saved the Coyotes for the time being but, really, what's the point?" Willes: "The patient is terminal. The NHL might be able to buy it another year. But the sickness remains." Reinsdorf in offering to buy the team "has basically absorbed the debt and now has control of an asset he can flip for $200[M] or so." However, the Coyotes "will also have an owner who isn't interested in investing in the team; a new coach when Wayne Gretzky is taken out; and a lineup of kids who finished tied for 13th in the conference last season." Willes: "This is not a recipe for success" (Vancouver PROVINCE, 6/28). Meanwhile, the GLOBE & MAIL's David Shoalts notes by July 1 "up to 10 players from the Phoenix Coyotes roster could become restricted or unrestricted free agents," and in theory, a rival GM "could submit a generous offer sheet to one of those restricted free agents, daring the NHL as financial custodian of the team to match the offer and keep the player." Shoalts: "How will the league respond if the sharks start circling the Coyotes' free agents? ... Does the NHL tell the rest of the league to back off, thereby skewing the free-agent market?" NHL Deputy Commissioner Bill Daly said that there "will be no interference from the league," and Shoalts wrote that is the "wise thing to do ... given the obvious conflict-of-interest and collusion implications" (GLOBE & MAIL, 6/27).

SALARY DUMP: In Vancouver, Tony Gallagher noted the Flames Saturday acquired the negotiating rights to D Jay Bouwmeester from the Panthers for a "player they weren't going to re-sign in [D] Jordan Leopold and a third-round pick." But in order to "clear the cap space to have even a ... chance to sign Bouwmeester, they first off-loaded the $2.3[M] cap hit" of D Jim Vandermeer to the Coyotes for F Brandon Prust, who makes $500,000. Gallagher: "There you have it in a nutshell. A league run for the benefit of losers to the detriment of the teams that have a decent hockey market and know how to run their businesses properly. It's a league where the fans in the best markets get screwed" (Vancouver PROVINCE, 6/28).

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