NHL Gives Coyotes Loan To Keep Franchise In Operation
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Coyotes Use Part Of Loan From NHL To
Pay Overdue Rent For Jobing.com Arena |
The NHL has "loaned money to the Coyotes to keep the financially troubled franchise operating, but if the team fails to pay its debt the league can take the club over," according to Craig Harris of the ARIZONA REPUBLIC. The NHL and the Coyotes agreed to the loan on February 24, and the team the following day paid the city of Glendale almost $351,000 in overdue rent payments for Jobing.com Arena that "dated to late summer 2008." The money also "likely was used to meet player payroll." Harris notes the loan, for an undisclosed amount, "gives the NHL more control over the future of the Coyotes -- including the possible relocation of the team." Sports Business Group President David Carter contends that the NHL investment "ultimately could give the NHL leverage to move the team," and also "gives the league leverage to put the team into a receivership." Financial records show that in order to obtain the loan, the organization "pledged all of its assets, including its management agreement" of the arena, as collateral. Harris notes the loan came about a month after NHL Commissioner Gary Bettman said that the club was "'not on life support' and called formal loans to the team 'wildly exaggerated' speculation." Financial records also indicated that the Coyotes since December '03 have borrowed at least $57.5M from affiliates of N.Y.-based private investment firm MSD Capital (ARIZONA REPUBLIC, 4/29). KPNX-NBC's Brahm Resnik noted based on the Coyotes' lease payments for the most recent full 12-month period, the team still owes Glendale "an estimated $2.3[M]" through April. Glendale Assistant Deputy City Manager Julie Frisoni said that the team "was now up to date on its monthly rent at the arena, but had not made other payments." Under the lease agreement, the Coyotes have to make "monthly, quarterly and annual payments into several accounts" (AZCENTRAL.com, 4/28).
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