The Puck Stops Here
Phoenix Coyotes Season In Purgatory
by PuckStopsHere on 06/13/10 at 11:57 AM ET
Comments (2)
It was May of 2009, when the Phoenix Coyotes declared bankruptcy. Last summer was spent in bankruptcy court where Jim Balsillie attempted to purchase the team and move it to Hamilton and when other potential suitors dropped out, the NHL attempted to purchase the team as well. Neither were awarded the team in the courts, but the NHL soon bought the team directly from Moyes. The plan was for the NHL to sell as soon as a suitable buyer was found. After a year of trying, it looks like none will be found willing to keep the team in Glendale, Arizona.
In December, a potential sale to Ice Edge Holdings was announced. This sale has not come together. Ice Edge Holdings is a group fronted by Anthony LeBlanc and Daryl Jones, who would keep the team in Phoenix, while playing a few games a year in Saskatoon. The problem is nobody in this group has enough money to buy the team and they have failed convincing banks to give them the credit to do so. The mere idea that the NHL is considering such an ownership group shows their level of desperation.
Jerry Reinsdorf, the Chicago Bulls and White Sox owner, has also been sniffing around. He seems willing to buy the team as long as he can convince somebody else to take on the risk, while he takes on the potential profits.
Glendale, Arizona is willing to take on the risk in the short term. They built the Jobing.com Arena in a western suburb of Phoenix in an attempt to make their suburb a recreation and entertainment hub in the Phoenix area. Should the Phoenix Coyotes leave they will be left with an expensive arena that they are still paying for with no major tenant. This is financially crippling to the city. The city of Glendale has guaranteed up to $25 million to pay for losses that the NHL may sustain in running the team in the 2010/11 season. It is not clear that they will be able to raise the money or that they will be legally allowed to pay it to the league, as some right wing tax payer advocate groups are challenging this agreement in court. I think the city of Glendale knows they will be bankrupt if Phoenix leaves, so they are going to “double down” on their gamble to keep them there, even if it is not a good bet. After all, after paying out $25 million to keep the Coyotes for one more year, there is no guarantee that they won’t leave in 2011, when no buyer is found to keep the team in Glendale.
Financially, the Phoenix Coyotes are a mess. There is no reason to expect that to be solved any time soon. It doesn’t look as though the team can be profitable in Glendale at any point in the foreseeable future. As long as somebody (the city of Glendale) absorbs the losses, this is okay for the NHL, but it is unsustainable longterm. I think it is clear that the team will have to be moved. The only question is when and where and how much damage will be done before that happens. Financially, the best location to move the team is Southern Ontario and that option has already had significant time, effort and money spent fighting it. If the NHL winds up going there after a long expensive stay of execution in Phoenix, it will all be a big waste.
On the ice, Phoenix’s rebound was a positive story in the NHL season. Phoenix had a 50 win, 107 point season, that was good enough for fourth seed in the West Conference. It will be hard to sustain that improvement given the expected off-ice distractions concerning the future of the team and the lack of a budget to pay for players to be signed and re-signed.
Phoenix has a good young team, but they have too many financial problems to make it a significant success story. The financial problems are not over. It doesn’t look like there is much chance that a buyer will be found for next year. It looks like there will be another season under NHL control in Phoenix. At some point, the NHL will likely be forced to move the team. The sooner that is pursued as a serious option, and not one to force concessions from the city of Glendale, the better for the overall health of the NHL.
Filed in: | The Puck Stops Here | Permalink
Tags: Phoenix+Coyotes,
Comments
The Big problem is that the Banks are not lending, no matter what the Feds say. Hard to get financing to pull this off, especialy with a shaky commodity.
Posted by 13 user names on 06/13/10 at 04:27 PM ET
Add a Comment
Please limit embedded image or media size to 575 pixels wide.
Add your own avatar by joining Kukla's Korner, or logging in and uploading one in your member control panel.
Captchas bug you? Join KK or log in and you won't have to bother.
Commenting is not available in this weblog entry.
Most Recent Blog Posts
New Jersey Devils Make The Finals
Los Angeles Kings Make The Stanley Cup Finals
Another Potentially Important Signing
World Hockey Championships: Medal Round
About The Puck Stops Here
The Puck Stops Here was founded during the 2004/05 lockout as a place to rant about hockey. The original site contains over 1000 posts, some of which were also published on FoxSports.com.
Who am I?
A diehard hockey fan.
Why am I blogging?
I want to.
Why are you reading it?
???
Email: .(JavaScript must be enabled to view this email address)
Donate to Kukla’s Korner
Like everything the NHL does, this mess doesn’t look like it is going away quickly. It is too bad that the NHL can’t find a suitable owner willing to lose millions in the desert. The NHL should sell to the gentlemen from Winnipeg and be done with it. Southern Ontario may be the popular option with people from that region, but the league has three teams in New York and the Devils and Islanders don’t draw all that well. Putting a team there will kill Buffalo. The folks from the center of the hockey universe feel they should have a better option than be ripped off by the Leafs or wait in traffic for an hour only to be shaken down by the wonderful and pleasant folks at the Peace Bridge. I understand their plight but that doesn’t expand the NHL’s fan base. From here it looks like the Mr. Bettman is looking for a happy ending to all of this and it’s not coming easy or cheap. As usual there must be a lot of attorney’s making a boat load of cash off of this.
Posted by danabob on 06/13/10 at 12:43 PM ET