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NHL Gives Glendale Dec. 31 Deadline To Find Buyer For Coyotes
Published May 24, 2010
|Glendale Must Find Buyer For
Coyotes By Dec. 31
Winnipeg's hopes to "get back in the NHL jumped again, as the league issued an ultimatum to the city of Glendale -- find a buyer for the Phoenix Coyotes by Dec. 31 or we will sell them to someone we have waiting to buy and move the team," according to David Shoalts of the GLOBE & MAIL. The NHL's mandate is included in an agreement completed Friday between the NHL and Glendale "in which the city agreed to pay" up to $25M of the Coyotes' operating losses for the '10-11 season. The agreement says the NHL has a "bona-fide offer from a viable purchaser who would relocate the hockey team to another market for the 2010-11 season." Glendale has until Dec. 31 to "find a buyer willing to keep the team at Jobing.com Arena," and after that date the NHL can "sell the team as it chooses." The pact notes the only way Glendale can keep the Coyotes after Dec. 31 is if it finds a local buyer and the league has "not yet entered into an agreement to sell the team in a non-Glendale sale and the city identifies a prospective bona fide purchaser." The city's "obligations to pay the Coyotes’ losses begin July 1 and run until the team plays its last game of the 2010-11 season." Glendale also signed an agreement stating that it will place $25M "in an escrow account with the Bank of America Merrill Lynch in Chicago or post a letter of credit so the league can begin drawing on it when the agreement begins" (GLOBESPORTS.com, 5/22). In Winnipeg, Gary Lawless reported True North Sports & Entertainment, led by Thomson Reuters Chair David Thomson, has "had the framework of a relocation deal in place with the league for some time, and is the third party the league is referring to" in the new agreement (WINNIPEGFREEPRESS.com, 5/22).
ON THE CLOCK: The GLOBE & MAIL's Shoalts reported the "next step for the NHL is to work out a deal with one of the two prospective buyers for the Coyotes." White Sox and Bulls Chair Jerry Reinsdorf has been the "preferred buyer for Glendale city council, although it tried to re-open negotiations recently" with Ice Edge Holdings "after talks about an arena lease with Reinsdorf hit a snag." After agreeing to the $25M deal with the NHL, Glendale has to "contend with legal action" from Phoenix-based government watchdog the Goldwater Institute. Excessive public subsidies of private businesses are "illegal under Arizona law and Goldwater lawyers have said it is also illegal for a community to give a city manager the power to close a binding agreement with another party without public debate and a vote of approval from city council." However, a Goldwater lawyer last week said that the group "will not go to court until it sees a written copy of the deal between the NHL and the city" (GLOBE & MAIL, 5/22). TSN's Darren Dreger cited sources as saying that Glendale city officials "talked with representatives from Ice Edge Holdings" on Friday, but the ownership group "remains reluctant to engage in further discussions with the city without exclusivity" (TSN.ca, 5/22).
|Coyotes Fans Now Have Seven More
Months Of Speculation About Team's Future
MORE OF THE SAME: In Phoenix, Brahm Resnik noted local hockey fans now are "guaranteed up to seven more months of speculation about the team’s future." Coyotes fans have "just reveled in the best season in franchise history, played out amid questions that have lingered for more than a year about the team’s future in Glendale." Resnik noted it is "not clear how the agreement -- and the enduring uncertainty -- will affect the team’s efforts to sell season tickets, suites, advertising and marketing agreements" (AZCENTRAL.com, 5/22). YAHOO SPORTS' Sean Leahy wrote the "follow up season to the Coyotes' storybook run to the playoffs will once again be filled with relocation discussions and more news about the franchise's possible future in Winnipeg than the on-ice product." Leahy: "The clock is now ticking on the franchise's future in Phoenix. It will be interesting to see how much greater the fan support is at the start of next season after the team's successes this year. And with the December 31st date looming overhead, this long, drawn-out mess could finally be coming to an end" (SPORTS.YAHOO.com, 5/22).
WORTH ALL THE TROUBLE? In Vancouver, Tom Mayenknecht cites a study from the Vancouver Sun and TheSportMarket.biz, which contends that if the NHL "relocated three of its weakest Southern U.S. franchises to Canada, their individual franchise values would increase" by more than 50% and the "league's average team valuation would jump" by $11M. The combined revenues of the three relocated teams would rise by $100M per year. The study shows "how the NHL, its member franchises, broadcast partners and other corporate stakeholders" would be "well-served if the NHL shifted its centre of gravity northward" (VANCOUVER SUN, 5/22). In N.Y., Larry Brooks wrote by keeping the Coyotes in Phoenix and "sacrificing immediate additional guaranteed revenue north of the border," NHL officials are "taking money out of the pockets of every player in the league without giving them, or their representatives in the NHLPA, a seat at the table or a voice in the process." This will be a "significant issue in the next round of collective bargaining." Commitment to retaining the Coyotes in Arizona "might be part of the league's strategy to get a more lucrative national television contract when the current one with NBC expires following next season." However, this is "still a gate-receipts league, one in which numerous teams -- including Atlanta, St. Louis, Florida, the Islanders and the Coyotes -- cannot generate revenue off ticket sales" (N.Y. POST, 5/23).