NHL Helping Search For New Investors Or Ownership For Coyotes
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NHL Assisting Coyotes In Efforts
To Solidify Ownership Situation |
The NHL is taking an "active role in trying to find new investors or ownership" for the Coyotes, and it is "being kept apprised of any ‘significant’ financial decision the team makes,” according to team and league sources cited by Scott Burnside of ESPN.com. The Coyotes are “expected to lose another $30[M] or more this season, on top of the more than $60[M] they are reported to have lost the past two years.” Coyotes Owner Jerry Moyes is in “dire financial straights, with his outside business interests -- most notably Swift Transportation, a large trucking firm -- having been hammered by high gasoline costs, followed by the dramatic downturn in the economy.” Sources said that the Coyotes’ “biggest hurdle is the current lease with Glendale” for Jobing.com Arena. The league, which has not yet "taken over control" of the team, is “trying to broker changes to the existing lease with the city of Glendale in the hopes of making the situation more attractive to new investors or owners.” The 30-year lease has a “number of problem areas as it relates to the franchise’s ability to generate revenues.” Sources said that talks with the city “'are in progress' but it’s unknown how amenable Glendale officials are to making alterations to the lease.” Coyotes CEO Jeff Shumway: “Everybody agrees that we need to find a solution that works for both of us.” Burnside wrote, “No one knows for certain if the Coyotes can finish out the season under the current financial climate, and at some point the specter of bankruptcy looms large” (ESPN.com, 12/23).
LIFE SUPPORT: The GLOBE & MAIL’s David Shoalts cited an NHL BOG source as saying that the league is “providing financial assistance to keep the Phoenix Coyotes alive in the form of advances on the franchise’s share of league revenue.” NHL Deputy Commissioner Bill Daly “did not directly confirm or deny the Coyotes are receiving money.” But in an e-mail he said “advances on league distributions are not unusual.” A league governor said that he is “‘99.9[%] sure’ NHL commissioner Gary Bettman has approved providing funds to the [Coyotes], with the permission of the governors’ executive and finance committees.” Shoalts also noted financial documents show that the Coyotes have “pledged the franchise and all its assets, including all forms of revenue (with the possible exception of arena-naming rights), as collateral for loans” from N.Y.-based SOF Investments LP, a subsidiary of the MSD Capital hedge fund controlled by Dell CEO Michael Dell. A source said that the Coyotes' collateral “covers an obligation of about $80[M] to SOF Investments.” Daly said that the Coyotes’ “pledge of all their assets and revenue is not a concern to the NHL.” Daly said in an e-mail, “Secured lenders grab as much as they can -- for the amount of their loan. The only relevant issue is whether the club is worth more than the secured loan. … We have no doubt that the Coyotes’ secured loan is more than covered by the value of the franchise” (GLOBE & MAIL, 12/24).
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