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NHL Makes Bid for Coyotes: Money, Meet Drain ... UPDATE: Jerry Reinsdorf/Tony Tavares Back Out

Byowner The curious case of the Phoenix Coyotes took another strange turn today.

Now the NHL wants to buy the team.

The league put in a bid to purchase the team, likely meaning the other 'major' bid by Jerry Reinsdorf and crew wasn't very strong (which it doesn't look to be) or is falling apart.

UPDATE: There is a report coming out of Arizona that states that Jerry Reinsdorf's group has indeed pulled up stakes in this deal claiming he is dealing with an 'unwilling seller.'

I guess that means they couldn't work out a new lease agreement with Glendale for the Glendale.com Arena. Here's a statement from the Reinsdorf group (which included Tony Tavares who can now run the Panthers if SPAC is approved as the team's new owners):

Glendale Sports and Entertainment, whose principals are John Kaites, Jerry Reinsdorf and Tony Tavares, regrets to inform all interested parties that despite expending a great deal of time, money, and effort, it is unable to comply with the court mandated deadline of August 25, 2009, for having a firm offer to purchase the Phoenix Coyotes and keep them in Glendale.

Despite the fact that we always thought that we were operating on an extremely aggressive timeline, we were able to accomplish a great deal in a very short time period. Our capital structure is negotiated, and we have negotiated acceptable deals with the secured creditors as well as a number of unsecured creditors. We have developed a solid business plan that would result in keeping the Coyotes in Glendale and in a relatively short period of time turning the team into a successful and viable NHL franchise.

All of this was accomplished while the unwilling seller created an expensive litigious environment and pressed a public relations strategy that has had the effect of chilling the negotiations with the City. It is unfortunate that this conduct continues. We have faced an organized publicity effort designed to provide negative and misleading information to interested parties. Not only has this stymied negotiations, but is has eroded local market demand for Coyotes tickets, luxury boxes, and sponsorships.

Despite arduous efforts by the City of Glendale’s administration and ourselves, we have been unable to reach an acceptable lease deal for the operation of the team at the Jobing.Com Arena. Since we have not finalized this critical agreement within the mandated timeline we cannot submit a firm and binding offer to the Court.

And now, back to the blog:

If the judge in the case decides to go with the highest bidder to pay off creditors, Jim Balsillie is going to win. The two bids aren't even close.

And the NHL knows this. They feel they need to save this thing and the only way to do that is by jumping in with the (supposed) backing of 29 other teams.

Isn't that special. A league running its own team. The league did say it would quickly sell the team outside of bankruptcy court.

So, the league overpays for the Coyotes, then sells them at a loss to keep them in Glendale. Sounds good.

Major League Baseball may have ruined the Montreal Expos, but at least they made some money when they moved them to Washington and sold them.

How much money can the NHL lose on this deal? A bundle. Don't forget, the NHL has already been pouring a ton of money into this franchise as it is. And now they are going to lose even more. Looks like expansion is on the way. The league is going to have to make this money up somewhere.

Hamilton, you might be getting a team soon enough. It just may not be this one. But you'll get one to make up for this one. Does that make any sense? To the NHL, apparently so. To everyone else? Eh.

Here's what Bill Daly said in a release today:

"Today, the League filed its own bid to purchase the Phoenix Coyotes’ franchise out of bankruptcy in an effort to maximize the likelihood that the Club ultimately will be sold to an acceptable purchaser who is committed to operating the franchise in Glendale.


"We remain supportive of the other efforts that have been and are being made to purchase and operate the Coyotes in Glendale, and we will continue to do everything we can to assist interested groups in those efforts leading up to the scheduled sale hearing on September 10, 2009 and thereafter, if the NHL is the winning bidder.

"We believe this step was necessary at this time in order to best preserve and maximize the value of the Club asset for benefit of the Club’s creditors and for the community of Glendale.

"The bankruptcy petition and subsequent events have been incredibly damaging to the Club’s business, and the sooner the Club can be extricated from the bankruptcy process, the sooner Club personnel can begin to restore the team’s vitality and local fan base.

"In the event the League’s bid proceeds forward and ultimately is the one approved by the Court, we intend to conduct an orderly sale process to a third party buyer outside of bankruptcy.

"It continues to be our intention and hope to conclude satisfactory agreements with existing Club business partners that will allow the Coyotes to be owned and operated on a viable basis in Glendale for many years to come."



Comments

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Makes you wonder what the NHL was doing when the Winnipeg and Quebec franchises were relocated. Granted I was far too young at the time to understand anything that went on with those 2, but I'm not seeing how keeping a team in Phoenix will ever make the league money. And I certainly don't know how having the NHL buy the team then sell it off as a substantial loss makes any sense.

Then again, I got a C in high school economics...

I'm with you Karl, my math isn't all that good. They must really like the desert.

Ironic that this article comes from another Sunbelt team's beat writer. Don't you guys know you're on Balsillie's target list too?

I got news for you - hockey doesn't make much sense in a freaking swamp either.

How is me writing news ironic? Am I ripping Phoenix or Hamilton? If Balsillie can't get a team out of bankruptcy court, how is he going to get any team -- including the Panthers? And haven't you ever heard of swamp hockey? It's very popular in other parts of the world (not so much here)...

I lived in Winnipeg, I was a season ticket holder to the Jets. Big difference, the Jets owners wanted out and no one from the community wanted to buy the team. The NHL found a buyer who moved the team to Phoenix. At the time the Jets played in the old Winnipeg Arena which was substandard. In Phoenix's case the team has a new arena and the league has someone to keep the team in Phoenix. The league made an offer because they don't want or trust Jim Balsillie and they shouldn't. If you read the business pages you would know he wasn't allowed to bid on the Nortel auction because his company would not abide by the bankruptsy court rules. Balsillie is a slimeball. The NHL knows this and will never allow him a team.

When Winnipeg and Quebec moved to their present cities, one major factor was the American dollar was worth a lot more money than the Canadian looney (or whatever its called). Its a major reason a lot of the Canadian teams didn't compete as strongly in the 90s, as they do now. Any team with proper management will produce fans and money. Lack of good management will doom any business.

The only reason why swamp panthers are not popular in South Florida is because they suck! Their ownership has sucked and they lost fans. When they win again, they will be a packed house. Hockey makes sense in South Florida because many northerners come down for the fall. Plus, the Panthers and the arena have a lucrative deal with the City of Sunrise (better than Phoenix did in Glendale). Therefore, Panthers stay and will be awaiting new ownership. I would love for the dolphins and media fanatic Ross to buy the team! Why? Because he will get the best mind in hockey to run the team and get us some decent players to win again. Plus, it would be a celebrity bonanza in the Fall for all the northerners. What fun would it be for all the local newspapers@ Dolphins and Panthers getting C list celebrities to the games.

Speaking of buying teams. Here are two that have a big bullseye on the list:

Buffalo Bills
Buffalo Sabres

Who buys them? My bet is on Baiselle making a bid for both teams. Moving both to Winnipeg. Win Win situation.

A few things to keep in mind:

This has more to do with the NHL keeping control over its teams and where they play than is does about Phoenix. For that they would be willing to lose money in the short term. Also, what city would ever build a rink for the NHL again if they just leave Glendale holding the ball on Jobing?

Besides, from what I've read, I don't think the NHL necessarily needs to take a huge bath on this. I think Riensdorf has gotten tired of dealing with the Moyes/Balsillie circus and the bad pub that comes with it. He's going to let the NHL do the dirty work and then buy it after the team is out of bankruptsy. I'm sure the NHL will be able to get some concessions out of Glendale (they basically have to at this point if they want to keep their anchor tenant.)

Finally, keep in mind that the NHL offer doesn't have to be anywhere near Balsillie's offer in terms of money to be considered the best bid since there it would not have to satisfy Glendale as an unsecured creditor.

The management and product the Coyotes have put out over the last decade makes the Panthers look good. Give them a chance with a decently run team and I think they will make money. Plenty of snowbirds.

Balsillie already tried to buy the Buffalo Sabres. The owner, B. Thomas Golisano refused to sell if he was going to move the team.

Ross can't buy an NHL, NBA, or MLB team. Its the very reason Huizenga sold the Marlins and the Panthers in the first place. The NFL owners are not allowed to own a major share of a sports franchise in another of the big 4 sports. Its why Huizenga tried to buy the Heat in his brother-in-law''s name, Whit Hudson, when Wayne was tryin to buy controlling interest in the Dolphins.

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