SBD/Issue 179/Franchises

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  • NHL Threatened To Move Coyotes Immediately Without $25M

    Glendale "On Track" To Give
    NHL Viable Coyotes Owner

    The NHL demanded that Glendale "show its proof of funds" to cover the $25M pledge the city made in an effort to keep the Coyotes in town "by last Thursday or risk the team leaving Jobing.com Arena immediately," according to Cecilia Chan of the ARIZONA REPUBLIC. Glendale Assistant Deputy City Manager Julie Frisoni said, "The NHL had a buyer on the table waiting to pay $170 million for the team." She noted that the prospective buyer "wanted to relocate the Coyotes to Canada" in time for the '10-11 NHL season. As a result, Glendale transferred $25M "earmarked for city services such as water and sewer" into an escrow account that the NHL "can begin to draw upon in September." City officials said that although Glendale "planned to set up a special taxing district or some other funding mechanism to meet the $25 million obligation, the NHL's deadline made that impossible." The NHL-Glendale agreement states that the city is "off the financial hook if the city finds a viable owner, approved by the NHL, by Dec. 31." City Manager Ed Beasley said that Glendale is "on track to submit a recommended buyer or buyers to the NHL by June 30." Chan noted "talks continue" between the city and two potential buyers: Ice Edge Holdings and Jerry Reinsdorf. Beasley said there also are "additional parties who have shown interest" (AZCENTRAL.com, 5/27).

    LIGHTNING SPEED: The Lightning have reported a "spike" in season-ticket sales and renewals since naming Steve Yzerman GM earlier this week. Exact figures were not available, but Lightning Exec VP/Communications Bill Wickett "called the increase somewhere between moderate and substantial." He said that it is "more notable because ticket sales usually lag around a holiday weekend" (TAMPABAY.com, 5/27). Meanwhile, SI.com's Jim Kelley wrote NHL Commissioner Gary Bettman "gets a lot of criticism for the ownership mess that has been the Phoenix Coyotes these past few years, and much of it is deserved, but in the credit where credit is due department, he's done the job in Tampa Bay." Bettman has found a "creditable owner with real money" in Jeff Vinik, and it is "fair to assume that Bettman steered Vinik" to hire Yzerman. The addition of Yzerman is a "good move for Tampa and, arguably, a great move for Vinik and the NHL." Bettman will not "say a word about how it all came about, but he should at least take a silent bow" (SI.com, 5/27).

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  • WPS St. Louis Athletica Fold Operations, Effective Immediately

     

    WPS Thursday announced St. Louis Athletica are shutting down operations because the team does not have the necessary funds to operate for the '10 season. The decision was made after a review of the situation done together with interested parties, and alternatives suggested included WPS covering the funding shortfall for the Athletica's last two player payrolls. WPS will re-make the remaining '10 schedule for a seven-team league, and Athletica players will be available to other WPS teams as free agents beginning Tuesday (Athletica). Athletica's lead investors, Sanjeev and Heemal Vaid, recently stopped providing funds for the team, throwing it into financial disarray. Athletica is the second WPS team to fold since the league launched last year. The L.A. Sol ceased operations before the start of the '10 season (Tripp Mickle, SportsBusiness Journal).

    LEFT HIGH AND DRY: In St. Louis, Tom Timmermann notes the Vaids joined the organization last year after the team lost "at least $2 million in their first season, substantially more than" Founder Jeff Cooper expected, and they "were responsible for funding of the teams and day-to-day operations." But for "reasons unclear, in early May the Vaids stopped paying the teams' bills and soon thereafter," Heemal, who was running the club, "returned to England." Cooper said, "The termination of St. Louis Athletica is a painful outcome from the funding shortfalls and ultimate default by the investors who had the obligation to fund and operate the team on a day-to-day basis. ... The investors who defaulted on a contract to fund Athletica through this season and beyond broke a promise to a league, team, players and a community." Timmermann notes the Athletica's "on-field success wasn't matched in the stands." The team's average attendance of 3,833 last season ranked fifth in the league, and the average attendance of 3,027 this season ranked last in the league (ST. LOUIS POST-DISPATCH, 5/28).

    '10 WPS ATTENDANCE TO DATE
    TEAM
    ATTENDANCE
    Boston Breakers
    5,250
    Atlanta Beat
    5,180
    Washington Freedom
    4,753
    Chicago Red Stars
    4,638
    Sky Blue FC
    4,119
    Philadelphia Independence
    3,898
    FC Gold Pride
    3,304
    St. Louis Athletica
    3,027

    BLOW TO LEAGUE: FANHOUSE.com's Michelle Smith wrote though WPS was "happy to have survived its first season in a tough economy" last year, that "optimism took a major hit" with Athletica's folding. WPS Commissioner Tonya Antonucci in a statement said, "It's incredibly difficult to lose a team in mid-season like this. We looked at a few options as a league together with our Board and U.S. Soccer, but the operational hurdles and finances just didn't work out." Smith wrote Athletica's folding is a "big setback for the young league, which lost its cornerstone Los Angeles Sol franchise in the offseason" (FANHOUSE.com, 5/27). In DC, Steve Goff wrote, "Let the league's damage control begin" (WASHINGTONPOST.com, 5/27). Philadelphia Independence Owner & CEO David Halstead said that he "still was satisfied with the direction of his team and the league." Halstead: "I'm disappointed but glad the entire league is structured so we are all independent businesses and separating operating entities. We are full-steam ahead and have a solid plan for 2010 and beyond and are confident with it" (PHILADELPHIA INQUIRER, 5/28).

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