You can't blame the Glendale City Council for talking tough. An article last week in The Repulsive featured numerous quotes from Glendale officials...
"We have a contract and we want our contract fulfilled", Councilwoman Yvonne Knaack said. "We're going to hold hard on those issues."
"We're willing to work with whoever's there" said Vice Mayor Manny Martinez who added; "We want to do what's best for the city. We don't want to give any money away"
Councilman Phil Lieberman also chimed in; "How in the world can we come up with millions, no matter who wants it?" he said.
And so it goes.
Well yes, Glendale officials wants the arena contract fulfilled. And no, the City is not in a position to bail out the Coyotes and Jobing.com arena. We understand. Municipalities everywhere are having a pretty rough time balancing their checkbooks right now. And above all else, we're taxpayers first here at the X.
But this is sounding more and more like a football game. Talk is cheap. Very cheap. And much like on the gridiron, who talks the best game may not necessarily be the winning side.
Glendale leaders are desperately looking for bankruptcy Judge Tom Baum to uphold the lease as if it was a secured debt. The walkaway cost to any buyer breaking the lease without bankruptcy relief is north of $500,000,000. In the eyes of The City, that would be a fair pay off to cover the mortgage and replace the anticipated lost tax revenue.
But there's trouble on all fronts. The Moyes/Balsillie axis wants the court to throw out the lease and stiff The City. The low key folks at Ice Edge are talking to Glendale but there's no report whether they have made any progress. The Reinsdorf's have already taken their puck and stick and gone home. And now the NHL has bid for the bankrupt team and they have also made it clear that no team can continue to operate under the current lease. In fact their offer to purchase the Coyotes specifically excludes assumption of the current lease.
The bottom line is that no group is willing to take on the building and the lease as it stands now. And eventually Glendale is going to have to come to grips with that reality or face the prospect of an empty building anchoring their crown jewel development.
As incredible as it seems, Glendale's best short term hope right now may be for Jim Balsillie to win the right to bid on the team. If Balsillie survives on Wednesday, the NHL will immediately appeal Baum's decision and almost certainly delay the September 10th auction. That will push off the day of reckoning and once and for all kill any chance of the team moving this year.
If Judge Tom throws out the Balsillie bid, then it's the NHL and Ice Edge still standing, both of whom want the original lease reworked. And if The Ice Edge group doesn't have concessions agreed to by September 10th, then the NHL may win the auction by default.
Best case, Glendale's got time. Worst case, they've got one year. The NHL isn't taking over this team to operate it indefinitely. It will be sold again quickly. With or without help from Glendale. And without help from The City, it is headed out of town.
Ultimately, The City will have to come to grips with making financial concessions to the new owners in the form of a reworked business arrangement.
Now financial concessions can come in a lot of different sizes and shapes.
During the Reinsdorf negotiation with Glendale (ever think that would be remembered as the Golden Era of this mess) a document was leaked by the Moyes legal team that included some of the demands the Reinsdorf group wanted Glendale to consider. Very few people ever saw the complete document and what made the newspaper was the sexy stuff -- an 11.5% tax on the surrounding retail area, parking charges and penalty payments if the team was still losing money in 5 years. We suspect there was much more than that discussed. But at the end of the day, there was no deal made.
And to hear Glendale officials talk, there is no deal on the table. Yes, we will talk but no we can't give you a whole lot right now. We're a little short ourselves. But that is going to have to change if the Coyotes are going to stay. Glendale is going to have to figure out a way to channel more money to team and the arena. And they probably have to assume some risk that after a period of time if it doesn't work, The Coyotes are going to go away.
Want a bizarre suggestion? Perhaps the Indian Casino that is proposed for the Glendale area might like to pick up some of the tab in return for having the City welcome them rather than suing the group and forcing them to find another west side location. Far-fetched? Not really. In Pittsburgh, casinos that won the license to operate in the area are paying the majority of costs for the Penguins' new arena.
Glendale officials would be smart to cut their losses and make a deal sooner rather than later. If the NHL takes possession of the team under their bid, the team will be on a death watch until a lease concession is granted. No one is going to buy the team without a new lease. And the NHL has made it clear that bailing out the team is now a limited time offer.
Smart business people know when to cut their losses. The city fathers and mothers have a pretty clear picture of the economic impact of the Coyotes staying or going. They can only count on the bankruptcy court to hold off judgement day for so long. They are going to have to make a deal or face the consequences.
Experience tell us that the sooner you make the deal the better off you will be. Glendale's got a lot of skin in this game. They need to swallow hard, cut a deal and start this franchise towards a recovery. The alternatives are not tasteful. Not tasteful at all.
Saturday, August 29, 2009
Friday, August 28, 2009
A Hidden Nugget
NHL Deputy Commissioner Bill Daly made the rounds of the local media yesterday and while there was the usual bravado and rhetoric one comment strikes me as not only important but very essential to the ongoing debate over the future of the Coyotes.
Daly stated in several places that if Judge Tom rules in favor of Jim Balsillie on September 2nd, the NHL will immediately go to court to appeal the decision. It would be the first time in this tangled process that one of the Judge's decisions would be appealed to another court (in this case the US 9th District Court of Appeals) and it would surely slow down the auction process.
As we have said all along, the NHL will do anything to preserve its' constitution and by-laws and their rights to select owners and determine where teams play. This is a strike issue for the league. Having a bidder who has already been voted off the island by the NHL qualifies in their eyes as a strike issue.
If Judge Tom rules in favor of the NHL and excludes Balsillie from the bankruptcy process, my legal friends tell me he doesn't create an antitrust case for Balsillie because there are no damages. He may create one with Moyes though because that finding would limit Jerry's potential recovery. The Moyes camp (funded by Balsillie) may or may not choose to mount their own legal challenge.
And while all this goes on, the clock ticks on Balsillie's September 14th deadline. The NHL would like nothing more to run out the clock here, even if it means pushing the auction process back a couple of months.
Next time at the computer, I'll address the rock and hard place that Glendale now finds it self between.
Daly stated in several places that if Judge Tom rules in favor of Jim Balsillie on September 2nd, the NHL will immediately go to court to appeal the decision. It would be the first time in this tangled process that one of the Judge's decisions would be appealed to another court (in this case the US 9th District Court of Appeals) and it would surely slow down the auction process.
As we have said all along, the NHL will do anything to preserve its' constitution and by-laws and their rights to select owners and determine where teams play. This is a strike issue for the league. Having a bidder who has already been voted off the island by the NHL qualifies in their eyes as a strike issue.
If Judge Tom rules in favor of the NHL and excludes Balsillie from the bankruptcy process, my legal friends tell me he doesn't create an antitrust case for Balsillie because there are no damages. He may create one with Moyes though because that finding would limit Jerry's potential recovery. The Moyes camp (funded by Balsillie) may or may not choose to mount their own legal challenge.
And while all this goes on, the clock ticks on Balsillie's September 14th deadline. The NHL would like nothing more to run out the clock here, even if it means pushing the auction process back a couple of months.
Next time at the computer, I'll address the rock and hard place that Glendale now finds it self between.
Thursday, August 27, 2009
A While Back...
The NHL offered to operate the Coyotes' franchise as a "debtor in possession" for the 2009-10 season. Judge Tom was impressed with that offer.
That in effect is what the NHL bid would create. But with the NHL now talking about the potential of relocation, I wouldn't be surprised if the compromise to this situation is that the NHL operates the team and the bankruptcy auction is delayed till the end of the season. It may be the best deal Balsillie can get and if The Judge is in anyway positive about getting money for Jerry Moyes as a creditor, he may see it as the best and fairest solution. It would also allow the City of Glendale time to take stock in what they are dealing with and come to the realization that half a loaf may be better than no loaf at all.
Stay tuned.
That in effect is what the NHL bid would create. But with the NHL now talking about the potential of relocation, I wouldn't be surprised if the compromise to this situation is that the NHL operates the team and the bankruptcy auction is delayed till the end of the season. It may be the best deal Balsillie can get and if The Judge is in anyway positive about getting money for Jerry Moyes as a creditor, he may see it as the best and fairest solution. It would also allow the City of Glendale time to take stock in what they are dealing with and come to the realization that half a loaf may be better than no loaf at all.
Stay tuned.
Wednesday, August 26, 2009
The NHL vs. Glendale -- It Could Happen
I'll leave all of the gory details from the last two days for those with deeper resources to report. But one thought leaps to mind that is a little scary and seemingly unthinkable a few months ago.
With the NHL now bidding on the team and the very good chance that Judge Tom will finally have to make a decision and toss Balsillie out on September 2nd, an incredible scenario is looming.
The NHL said in its' filing that it wants to break the lease at Jobing.com arena after one year and move the team if new local ownership cannot be located.
Which would mean that the good folks at the City of Glendale and the league that seemingly has gone out of their way to help the team stay in place, will be at legal odds. Glendale really has no choice but to oppose any offer that even hints at relocation. Especially if our new best friends at Ice Edge commit to stay in Glendale.
And let's remember that Ice Edge now officially has skin in the game. $10 Million was deposited as a condition of their bid. Hmmmm....
It gets more interesting every day.
With the NHL now bidding on the team and the very good chance that Judge Tom will finally have to make a decision and toss Balsillie out on September 2nd, an incredible scenario is looming.
The NHL said in its' filing that it wants to break the lease at Jobing.com arena after one year and move the team if new local ownership cannot be located.
Which would mean that the good folks at the City of Glendale and the league that seemingly has gone out of their way to help the team stay in place, will be at legal odds. Glendale really has no choice but to oppose any offer that even hints at relocation. Especially if our new best friends at Ice Edge commit to stay in Glendale.
And let's remember that Ice Edge now officially has skin in the game. $10 Million was deposited as a condition of their bid. Hmmmm....
It gets more interesting every day.
Tuesday, August 25, 2009
Twists & Turns
Today, the Coyotes bankruptcy proceedings took an interesting and unexpected turn; The Jerry Reinsdorf group has (for now) pulled out of their bid to buy the team. The NHL has announced they will bid on the franchise with the intention of taking control and then reselling the team to a committed local buyer.
Coming one day after a closed door meeting of the Glendale City Council, one can assume that something other than lunch did not sit well. The Reinsdorf's, were clearly trying to play hardball with the Glendale City Council, seeking major lease concessions. They could not make a deal.
For now, the Reinsdorf-Kaites-Tavares-Reinsdorf Jr. group is on the sidelines. Of course, stay tuned. That may change in coming weeks.
The NHL is a stable, secure and responsible bidder. The league has extensive financial resources and is also united in its' efforts to preserve the league constitution and keep a certain Mr. James Balsillie out of their ranks. On the surface, this is a good thing for Phoenix hockey fans.
And if the NHL is to buy the team, they could then proceed in an orderly manner to sell it to an owner of their choosing.
But there is a troubling undercurrent here.
The NHL really had no intention of bidding but they weren't about to let Balsillie be the only bidder to show up. Difficult times call for drastic action.
Starting way back in May, the Reinsdorf group seemed to be the best chance for hockey in Phoenix. They made it clear that they had invested significant time and money negotiating with creditors, developing a business plan and working to build an organization that could make hockey a success in the desert. Now, for at least the moment, they have decided to call off the jam.
Oh and they made it clear on the way out the door that the reason for their withdrawal. The Reinsdorf's complained of an "unwilling seller" and "an organized publicity effort designed to provide negative and misleading information to interested parties." Ouch. This will no doubt add much fuel to the NHL's claim that Moyes should be removed from the bankruptcy process. It may prove to be a very compelling argument.
While NHL ownership would certainly represent stability, at least in the short term, it also represents prolonged uncertainty about who is going to own the team and how will it be operated for the long haul.
Meanwhile our potential new best friends at Ice Edge quietly filed a bid for the team with the bankruptcy court. Until now, they have seemed to be more of a curiosity than leading men. Now with the Reinsdorf group pulling out, they might, might just end up with the team. We'll be watching with interest to see how this somewhat oddball bid plays out. And over the next few days, we expect to learn more about their business plan.
So for now, the uncertainty drags on. And no matter who ends up with the team, much damage has been done. Numerous people in the know have told me that ticket sales are "awful". One would assume sponsorship sales are not much better. And while Don Maloney has done his best to cobble together a representative team, there are still more questions than answers on the roster.
We've had high hopes that new owners would make a blazing entrance and give the franchise a shot of juice to excite the market. A star player, a great marketing campaign or some major organization changes are urgently needed to refocus hockey fans on the game. Now it appears that none of the cures that new vibrant ownership would bring will be in place at the start of this season.
And the band plays on.
Coming one day after a closed door meeting of the Glendale City Council, one can assume that something other than lunch did not sit well. The Reinsdorf's, were clearly trying to play hardball with the Glendale City Council, seeking major lease concessions. They could not make a deal.
For now, the Reinsdorf-Kaites-Tavares-Reinsdorf Jr. group is on the sidelines. Of course, stay tuned. That may change in coming weeks.
The NHL is a stable, secure and responsible bidder. The league has extensive financial resources and is also united in its' efforts to preserve the league constitution and keep a certain Mr. James Balsillie out of their ranks. On the surface, this is a good thing for Phoenix hockey fans.
And if the NHL is to buy the team, they could then proceed in an orderly manner to sell it to an owner of their choosing.
But there is a troubling undercurrent here.
The NHL really had no intention of bidding but they weren't about to let Balsillie be the only bidder to show up. Difficult times call for drastic action.
Starting way back in May, the Reinsdorf group seemed to be the best chance for hockey in Phoenix. They made it clear that they had invested significant time and money negotiating with creditors, developing a business plan and working to build an organization that could make hockey a success in the desert. Now, for at least the moment, they have decided to call off the jam.
Oh and they made it clear on the way out the door that the reason for their withdrawal. The Reinsdorf's complained of an "unwilling seller" and "an organized publicity effort designed to provide negative and misleading information to interested parties." Ouch. This will no doubt add much fuel to the NHL's claim that Moyes should be removed from the bankruptcy process. It may prove to be a very compelling argument.
While NHL ownership would certainly represent stability, at least in the short term, it also represents prolonged uncertainty about who is going to own the team and how will it be operated for the long haul.
Meanwhile our potential new best friends at Ice Edge quietly filed a bid for the team with the bankruptcy court. Until now, they have seemed to be more of a curiosity than leading men. Now with the Reinsdorf group pulling out, they might, might just end up with the team. We'll be watching with interest to see how this somewhat oddball bid plays out. And over the next few days, we expect to learn more about their business plan.
So for now, the uncertainty drags on. And no matter who ends up with the team, much damage has been done. Numerous people in the know have told me that ticket sales are "awful". One would assume sponsorship sales are not much better. And while Don Maloney has done his best to cobble together a representative team, there are still more questions than answers on the roster.
We've had high hopes that new owners would make a blazing entrance and give the franchise a shot of juice to excite the market. A star player, a great marketing campaign or some major organization changes are urgently needed to refocus hockey fans on the game. Now it appears that none of the cures that new vibrant ownership would bring will be in place at the start of this season.
And the band plays on.
Friday, August 14, 2009
The (Still Flawed) Coyotes Look To Be Staying...
The news from Judge Tom's court this week have given everyone renewed optimism that the Coyotes will have new owners, a new arena lease and a new outlook within the next few weeks.
They need all of the above because preparations are underway for the opening of training camp. In Phoenix. Rookies and selected younger players will be due in Arizona on September 5th and veterans will report on September 12th.
Which leads to two important questions; Is this the team we are going to war with and who is the coach going to be?
Over the next few days, I'll look at the team, options to improve the team and the coaching situation.
General Manager Don Maloney has a done a good job shopping the bargain aisle with the free agent signings of Vernon Fiddler, Jason Labarbera and Adrian Aucoin. We love the Aucoin and Fiddler moves but are concerned about Labarbera. That could become a moot point if Al Montoya expands on the promise he displayed late last year and wins the backup goaltending job.
Maloney has also been busy at the trade desk. He swapped two players with no future in Phoenix (Todd Fedoruk and David Hale) to Tampa for Radim Vrbata. GMDM will light a candle hoping that Vrbata can regain his goalscoring magic from the first half of the 2007-08 season. Lauri Korpikoski comes in from New York for the enigmatic Enver Lisin and gritty defenseman Jim Vandermeer comes over from Calgary for Brandon Prust. Vandermeer's contract is a little rich ($2.3MM) for a bottom pair defenseman and Vrbata has to live up to the $3MM contract he got from Tampa but on merit both trades make sense. We'll trust that Maloney couldn't find a better place to spend the money.
But this still leaves Phoenix with a flawed team. Right now, Shane Doan is the only player on the roster who scored more than 15 goals last season. In fact, Lombardi (1), Vrbata (1), Prucha (2) and Mueller (1) are the only Coyotes who have ever scored 20 goals in an NHL season. No matter how you add it up, this team still needs to add goalscoring. Lots of it.
There will be much hope for internal improvement. Mikkel Boedker may be the Yotes' best young forward and he should grow into a constant 25-35 goal scorer. Peter Mueller slid backwards in his sophomore season from 22 to 13 goals. A return to form would be very helpful. Scottie Upshall has long been buried on checking lines but in Phoenix he will get a chance to play top 6 minutes. After scoring 14 and 15 goals the last two years, he could upgrade his production. And there's Kyle Turris, who may not ever become a top goalscorer but hopefully will develop playmaking skills that enhance his teammates.
At the end of the day, that's a lot of hope. But, it's also a lot of "if's". Other teams in the Western Conference have beefed up too. The Coyotes desperately need to make the playoffs and the roster as currently constituted would do well to fight for a playoff spot.
There are still intriguing scorers available. According to many reports, Boston may have to move young forwards Phil Kessel or Chuck Kobasew. Free agents Alex Tanguay and well traveled veterans Miro Satan and Petr Sykora are still on the market.
I spoke to a Coyote official about Kessel and in a polite way, he indicated that Kessel probably wasn't what the team was looking for. His less than pristine attitude is well known and with best friend Blake Wheeler thumbing his nose at the Coyotes and joining him in Boston, it doesn't seem likely he would be thrilled about coming to Arizona.
Tanguay certainly is an option. It's been rumored that he's been close to signing with the Coyotes on multiple occasions. In fact, one popular rumor site went as far as to say he had signed with the Coyotes but his contract was rejected by the NHL because of budget concerns. In any event there's no deal in place but he is still available.
And then there's Dany Heatley. Heatley has made it clear he wants out of Ottawa. I never even though about Heatley and the Coyotes until I looked around the league at teams that might be able to digest his contract. There aren't many.
And it's a contract with some interesting angles. Heatley carries a salary cap hit of $7.5MM. That would seemingly disqualify the Coyotes under normal circumstances, but he has already collected $4MM this year, with an additional $4MM to be paid. Over the next four years, the Coyotes would take a $7.5MM cap hit but pay out an average of $6.75MM. If the Coyotes were looking at $3MM for Tanguay, bringing in Heatley for $4MM this year (with much more in the out years) would seem to make sense under the budget Don Maloney is managing.
That's a lot of money but Heatley is a lot of hockey player. He's connected for 260 goals in 7 NHL seasons and twice has passed the 50 mark. He is a special player unlike anyone who has worn a Coyote uniform in recent years.
And if the ownership situation is settled soon, new management could weigh in here. If and when the Reinsdorf-Kaites-Tavares-Reinsdorf Jr. group gets control of the team it would make sense that they would consider loosening the purse strings a little bit. And as experienced sports promoters and managers they understand that the best way to boost lagging ticket sales is to make some big news.
The Coyotes desperately need some juice to excite the fan base. Vern Fiddler and Adrian Aucoin are nice hockey players but they are not going to sell a lot of tickets. Heatley may not even want to come to Phoenix (and he would have to waive his no-trade clause) but it's sure worth a try. He would give the franchise a marquis name that is badly lacking, great offensive production on the ice and a generous helping of sizzle to help turn the page from this summer's debacle.
What would it take to make a deal? An educated guess would be Peter Mueller, one of the team's prize young defensemen (Goncharov, Summers or Ross) and probably a 1st draft choice. (This is similar to a deal the New York Rangers supposedly had in place with Ottawa earlier this summer) Expensive, yes. Well worth the price? You bet! Ottawa wants to get younger and has a real salary cap problem. If Maloney could get all the stars aligned on this one, he would have solved the team's biggest problem with a bold and imaginative move. And he would probably carry those guys on his back to Ottawa to make the deal.
The legal and ownership issues can't be solved soon enough. Rookie camp starts in less than three weeks. Our first exhibition game is on September 15th. And opening night is less than two months away. And there's still work to be done on this roster.
We'll all feel better when the focus is back on the game and the team rather than the circus.
They need all of the above because preparations are underway for the opening of training camp. In Phoenix. Rookies and selected younger players will be due in Arizona on September 5th and veterans will report on September 12th.
Which leads to two important questions; Is this the team we are going to war with and who is the coach going to be?
Over the next few days, I'll look at the team, options to improve the team and the coaching situation.
General Manager Don Maloney has a done a good job shopping the bargain aisle with the free agent signings of Vernon Fiddler, Jason Labarbera and Adrian Aucoin. We love the Aucoin and Fiddler moves but are concerned about Labarbera. That could become a moot point if Al Montoya expands on the promise he displayed late last year and wins the backup goaltending job.
Maloney has also been busy at the trade desk. He swapped two players with no future in Phoenix (Todd Fedoruk and David Hale) to Tampa for Radim Vrbata. GMDM will light a candle hoping that Vrbata can regain his goalscoring magic from the first half of the 2007-08 season. Lauri Korpikoski comes in from New York for the enigmatic Enver Lisin and gritty defenseman Jim Vandermeer comes over from Calgary for Brandon Prust. Vandermeer's contract is a little rich ($2.3MM) for a bottom pair defenseman and Vrbata has to live up to the $3MM contract he got from Tampa but on merit both trades make sense. We'll trust that Maloney couldn't find a better place to spend the money.
But this still leaves Phoenix with a flawed team. Right now, Shane Doan is the only player on the roster who scored more than 15 goals last season. In fact, Lombardi (1), Vrbata (1), Prucha (2) and Mueller (1) are the only Coyotes who have ever scored 20 goals in an NHL season. No matter how you add it up, this team still needs to add goalscoring. Lots of it.
There will be much hope for internal improvement. Mikkel Boedker may be the Yotes' best young forward and he should grow into a constant 25-35 goal scorer. Peter Mueller slid backwards in his sophomore season from 22 to 13 goals. A return to form would be very helpful. Scottie Upshall has long been buried on checking lines but in Phoenix he will get a chance to play top 6 minutes. After scoring 14 and 15 goals the last two years, he could upgrade his production. And there's Kyle Turris, who may not ever become a top goalscorer but hopefully will develop playmaking skills that enhance his teammates.
At the end of the day, that's a lot of hope. But, it's also a lot of "if's". Other teams in the Western Conference have beefed up too. The Coyotes desperately need to make the playoffs and the roster as currently constituted would do well to fight for a playoff spot.
There are still intriguing scorers available. According to many reports, Boston may have to move young forwards Phil Kessel or Chuck Kobasew. Free agents Alex Tanguay and well traveled veterans Miro Satan and Petr Sykora are still on the market.
I spoke to a Coyote official about Kessel and in a polite way, he indicated that Kessel probably wasn't what the team was looking for. His less than pristine attitude is well known and with best friend Blake Wheeler thumbing his nose at the Coyotes and joining him in Boston, it doesn't seem likely he would be thrilled about coming to Arizona.
Tanguay certainly is an option. It's been rumored that he's been close to signing with the Coyotes on multiple occasions. In fact, one popular rumor site went as far as to say he had signed with the Coyotes but his contract was rejected by the NHL because of budget concerns. In any event there's no deal in place but he is still available.
And then there's Dany Heatley. Heatley has made it clear he wants out of Ottawa. I never even though about Heatley and the Coyotes until I looked around the league at teams that might be able to digest his contract. There aren't many.
And it's a contract with some interesting angles. Heatley carries a salary cap hit of $7.5MM. That would seemingly disqualify the Coyotes under normal circumstances, but he has already collected $4MM this year, with an additional $4MM to be paid. Over the next four years, the Coyotes would take a $7.5MM cap hit but pay out an average of $6.75MM. If the Coyotes were looking at $3MM for Tanguay, bringing in Heatley for $4MM this year (with much more in the out years) would seem to make sense under the budget Don Maloney is managing.
That's a lot of money but Heatley is a lot of hockey player. He's connected for 260 goals in 7 NHL seasons and twice has passed the 50 mark. He is a special player unlike anyone who has worn a Coyote uniform in recent years.
And if the ownership situation is settled soon, new management could weigh in here. If and when the Reinsdorf-Kaites-Tavares-Reinsdorf Jr. group gets control of the team it would make sense that they would consider loosening the purse strings a little bit. And as experienced sports promoters and managers they understand that the best way to boost lagging ticket sales is to make some big news.
The Coyotes desperately need some juice to excite the fan base. Vern Fiddler and Adrian Aucoin are nice hockey players but they are not going to sell a lot of tickets. Heatley may not even want to come to Phoenix (and he would have to waive his no-trade clause) but it's sure worth a try. He would give the franchise a marquis name that is badly lacking, great offensive production on the ice and a generous helping of sizzle to help turn the page from this summer's debacle.
What would it take to make a deal? An educated guess would be Peter Mueller, one of the team's prize young defensemen (Goncharov, Summers or Ross) and probably a 1st draft choice. (This is similar to a deal the New York Rangers supposedly had in place with Ottawa earlier this summer) Expensive, yes. Well worth the price? You bet! Ottawa wants to get younger and has a real salary cap problem. If Maloney could get all the stars aligned on this one, he would have solved the team's biggest problem with a bold and imaginative move. And he would probably carry those guys on his back to Ottawa to make the deal.
The legal and ownership issues can't be solved soon enough. Rookie camp starts in less than three weeks. Our first exhibition game is on September 15th. And opening night is less than two months away. And there's still work to be done on this roster.
We'll all feel better when the focus is back on the game and the team rather than the circus.
Wednesday, August 12, 2009
A Different Kind of Punch
OK, I was looking for a home run right cross. Instead Team Balsillie got nailed by a straight left jab.
The NHL never got a hearing on having Jimberry excluded from further participation in the process. Even though Gary Bettman was in the courtroom and poised to testify, the league's motion to exclude Balsillie was never fully vetted. Instead it will be dealt with at a September 2nd hearing.
The blow that staggered Balsillie's bid came instead from lawyers for MSD Capital, the Coyotes largest (and one of only two) secured creditors. MSD announced they had reached an agreement with the Reinsdorf-Kaites-Tavares-Reinsdorf Jr. group on a restructure and repayment of MDS' substantial and secured loan to the Coyotes.
Don't underestimate the importance of this agreement. As one of two secured creditors (the NHL is the other) Judge Tom has looked to MSD for their position and agreement. One of the reasons he has been loathe to excuse Balsillie from the proceedings is that his first duty is to the creditors of the Coyotes with secured creditors receiving the highest priority. Without a viable alternative to Balsillie, the Court had to keep that option open. It put pressure on the Reinsdorf group to make a deal.
That void has now been filled. And now as Reinsdorf+ looks to bring negotiations with the City of Glendale to completion, their bid is gaining more legitimacy in the eyes of the court. Once a Glendale deal is struck, it will be much easier for The Judge to excuse Mr. Balsillie from further participation.
That's exactly what the NHL wants. They will be back in full force on September 2nd. They would like nothing better than to drive a stake through Mr. Balsillie's heart.
Judge Tom gets what he wants too. He would simply prefer that people and the situation work itself out rather than have him rule on lofty matters like ownership approval and franchise relocation. Bankruptcy courts (and judges) seldom stray beyond their corner of the law. He has sent plenty of signals to their participants. It's their job to pick up those signals and act accordingly.
So on September 2nd, we'll be back for more fun with the expectation that the Reinsdorf's will have their dealings with Glendale in order and the full support of the creditors committee. That will make it easy for the courts to excuse Mr. Balsillie. And to those who asked, Balsillie really has no anti-trust grounds to sue on because he hasn't incurred any damages. Another reason the NHL wants him out and out now.
The longer this spitting contest goes on it's looking a lot like a 7-5 hockey game. Not exactly an artistic success but we'll take the two points. And after the game, we'll all be talking about how we can build on a very ugly win.
The NHL never got a hearing on having Jimberry excluded from further participation in the process. Even though Gary Bettman was in the courtroom and poised to testify, the league's motion to exclude Balsillie was never fully vetted. Instead it will be dealt with at a September 2nd hearing.
The blow that staggered Balsillie's bid came instead from lawyers for MSD Capital, the Coyotes largest (and one of only two) secured creditors. MSD announced they had reached an agreement with the Reinsdorf-Kaites-Tavares-Reinsdorf Jr. group on a restructure and repayment of MDS' substantial and secured loan to the Coyotes.
Don't underestimate the importance of this agreement. As one of two secured creditors (the NHL is the other) Judge Tom has looked to MSD for their position and agreement. One of the reasons he has been loathe to excuse Balsillie from the proceedings is that his first duty is to the creditors of the Coyotes with secured creditors receiving the highest priority. Without a viable alternative to Balsillie, the Court had to keep that option open. It put pressure on the Reinsdorf group to make a deal.
That void has now been filled. And now as Reinsdorf+ looks to bring negotiations with the City of Glendale to completion, their bid is gaining more legitimacy in the eyes of the court. Once a Glendale deal is struck, it will be much easier for The Judge to excuse Mr. Balsillie from further participation.
That's exactly what the NHL wants. They will be back in full force on September 2nd. They would like nothing better than to drive a stake through Mr. Balsillie's heart.
Judge Tom gets what he wants too. He would simply prefer that people and the situation work itself out rather than have him rule on lofty matters like ownership approval and franchise relocation. Bankruptcy courts (and judges) seldom stray beyond their corner of the law. He has sent plenty of signals to their participants. It's their job to pick up those signals and act accordingly.
So on September 2nd, we'll be back for more fun with the expectation that the Reinsdorf's will have their dealings with Glendale in order and the full support of the creditors committee. That will make it easy for the courts to excuse Mr. Balsillie. And to those who asked, Balsillie really has no anti-trust grounds to sue on because he hasn't incurred any damages. Another reason the NHL wants him out and out now.
The longer this spitting contest goes on it's looking a lot like a 7-5 hockey game. Not exactly an artistic success but we'll take the two points. And after the game, we'll all be talking about how we can build on a very ugly win.
Tuesday, August 11, 2009
The Knockout Punch
It's devastating when it happens in hockey. In 1997, I saw Nick Kypreos' career ended by one punch from Ryan Vandenbussche. A few years later, I watched Stu Grissom cold cock two St. Louis Blues in one night. And, on numerous occasions, I've watched Todd Fedoruk...well you know. In his career, Todd has beat up a lot of hands with his face.
And today in Judge Tom's court, the NHL goes for the knockout punch on Jim Balsillie. Officially, today's court date is intended to set the ground rules and schedules for the auction. But there will be much intrigue layered into the ground rule conversation.
There are pages and pages of motions that have been filed but one in particular stands out. The NHL wants to have Balsillie's quixotic bid terminated since he has been voted down as a potential NHL owner by the Board of Governors.
When it comes to Team Balsillie, The NHL has buzzard's luck. They can't kill it and it won't die.
Today they will show up in court with howitzers.
If the 26-0-3 vote from The Governors wasn't damning enough, the rhetoric that emerged from the owners meeting was certainly intense. Craig Leopold, the current Minnesota Wild and former Nashville Predator owner tried to sell the Nashville team to Balsillie. At the Governors meeting, he painted a damning picture of Jimberry's dealings with the Predators. Before Balsillie initiated contact with the Predators owner, he called the city of Nashville to question whether the Predators were in compliance with their lease. His strategy all along was to undercut the Predators ownership and move the team to Hamilton.
Leopold's speech at the Governors meeting was so moving that a transcript is part of the NHL motion to summarily dismiss Balsillie.
Canadians owner George Gillett, who is in the process of selling the team once was considered a potential Balsillie ally. That all ended when Balsillie breached an NDA and told the world that the Canadians were for sale. Gillett is immensely popular with other NHL owners and his opinion still carries great weight.
And the NHL will also tell the Judge that Balsillie was approved to buy the Penguins, but then ducked out at the last minute when he realized he could not easily move the team.
The league wants to accomplish two important things here. First of all, they want to remind Judge Tom that we're playing with their puck and their stick. The Judge previously said that he had no intention of wading into the NHL constitution and by-laws as part of this proceeding. The league voted Balsillie down. In the league's eyes, that should disqualify him from any further participation in the process. The conversation about league rules keeps coming up over and over for a reason. It is the basis for the existence of the league. It is why other sports leagues lined up in support of the NHL. It would also be the basis for an appeal if the NHL ever lost this case.
Secondly, they would like to put to rest any questions about where the team is playing this year. The league has gone so far as to file an emergency motion asking permission to contract with US Air for travel this year. Ticket sales need a kick in the pants. One can only imagine how bad things are for the guys trying to sell sponsorships. It's August 12th and training camps open in 4 weeks.
The NHL has previously said they would operate the team until local ownership is secured. Hopefully that will come on September 10th at the currently scheduled auction date.
The NHL is also joining with the City of Glendale in a motion to have Jerry Moyes removed from the process, largely because of the leak in a recent bankruptcy filing. The embarrassing and incomplete leak that exposed some of the negotiations (and sexy proposals) taking place between Glendale and the Reinsdorf-Kaites-Tavares-Reinsdorf Jr. group was a nightmare for those trying to keep the team in Glendale. The leak came from Moyes' legal team. Although Moyes was not personally responsible for the leak, he could be sanctioned as well as his attorneys.
At the end of the day, or shortly thereafter, we should have a schedule of the upcoming events as well as a lineup of participants. And once we have a scorecard we can get back to the ugly business of negotiating leases, capital agreements and trying to figure out how to make this team an ongoing concern.
And today in Judge Tom's court, the NHL goes for the knockout punch on Jim Balsillie. Officially, today's court date is intended to set the ground rules and schedules for the auction. But there will be much intrigue layered into the ground rule conversation.
There are pages and pages of motions that have been filed but one in particular stands out. The NHL wants to have Balsillie's quixotic bid terminated since he has been voted down as a potential NHL owner by the Board of Governors.
When it comes to Team Balsillie, The NHL has buzzard's luck. They can't kill it and it won't die.
Today they will show up in court with howitzers.
If the 26-0-3 vote from The Governors wasn't damning enough, the rhetoric that emerged from the owners meeting was certainly intense. Craig Leopold, the current Minnesota Wild and former Nashville Predator owner tried to sell the Nashville team to Balsillie. At the Governors meeting, he painted a damning picture of Jimberry's dealings with the Predators. Before Balsillie initiated contact with the Predators owner, he called the city of Nashville to question whether the Predators were in compliance with their lease. His strategy all along was to undercut the Predators ownership and move the team to Hamilton.
Leopold's speech at the Governors meeting was so moving that a transcript is part of the NHL motion to summarily dismiss Balsillie.
Canadians owner George Gillett, who is in the process of selling the team once was considered a potential Balsillie ally. That all ended when Balsillie breached an NDA and told the world that the Canadians were for sale. Gillett is immensely popular with other NHL owners and his opinion still carries great weight.
And the NHL will also tell the Judge that Balsillie was approved to buy the Penguins, but then ducked out at the last minute when he realized he could not easily move the team.
The league wants to accomplish two important things here. First of all, they want to remind Judge Tom that we're playing with their puck and their stick. The Judge previously said that he had no intention of wading into the NHL constitution and by-laws as part of this proceeding. The league voted Balsillie down. In the league's eyes, that should disqualify him from any further participation in the process. The conversation about league rules keeps coming up over and over for a reason. It is the basis for the existence of the league. It is why other sports leagues lined up in support of the NHL. It would also be the basis for an appeal if the NHL ever lost this case.
Secondly, they would like to put to rest any questions about where the team is playing this year. The league has gone so far as to file an emergency motion asking permission to contract with US Air for travel this year. Ticket sales need a kick in the pants. One can only imagine how bad things are for the guys trying to sell sponsorships. It's August 12th and training camps open in 4 weeks.
The NHL has previously said they would operate the team until local ownership is secured. Hopefully that will come on September 10th at the currently scheduled auction date.
The NHL is also joining with the City of Glendale in a motion to have Jerry Moyes removed from the process, largely because of the leak in a recent bankruptcy filing. The embarrassing and incomplete leak that exposed some of the negotiations (and sexy proposals) taking place between Glendale and the Reinsdorf-Kaites-Tavares-Reinsdorf Jr. group was a nightmare for those trying to keep the team in Glendale. The leak came from Moyes' legal team. Although Moyes was not personally responsible for the leak, he could be sanctioned as well as his attorneys.
At the end of the day, or shortly thereafter, we should have a schedule of the upcoming events as well as a lineup of participants. And once we have a scorecard we can get back to the ugly business of negotiating leases, capital agreements and trying to figure out how to make this team an ongoing concern.
Sunday, August 9, 2009
Wayne Gretzky Deserves Better
Click on the headline above to read a nice blog by Howard Berger about The Great One.
After posting this article earlier today I was reminded that 21 years ago the trade of the century occurred -- Wayne Gretzky was sent by the Edmonton Oilers to the Los Angeles Kings for $15MM, two players and three first draft choices.
And it was also the biggest scoop I ever missed out on. My dear friend Chris Matthews was working for an advertising agency that handled Emory Air Freight. That long gone company was an official NHL sponsor and Chris had picked up chatter that Gretzky was headed to LA. He had validated the rumor with a friend who worked for the Kings. I told him that there was absolutely, positively no way that anyone would even think of trading Wayne Gretzky. I think he told him he was smoking his underwear.
And as it turns out he wasn't. And from that day forward no professional athlete can ever say they won't be traded because Wayne Gretzky was traded.
After posting this article earlier today I was reminded that 21 years ago the trade of the century occurred -- Wayne Gretzky was sent by the Edmonton Oilers to the Los Angeles Kings for $15MM, two players and three first draft choices.
And it was also the biggest scoop I ever missed out on. My dear friend Chris Matthews was working for an advertising agency that handled Emory Air Freight. That long gone company was an official NHL sponsor and Chris had picked up chatter that Gretzky was headed to LA. He had validated the rumor with a friend who worked for the Kings. I told him that there was absolutely, positively no way that anyone would even think of trading Wayne Gretzky. I think he told him he was smoking his underwear.
And as it turns out he wasn't. And from that day forward no professional athlete can ever say they won't be traded because Wayne Gretzky was traded.
Thursday, August 6, 2009
As The Puck Spins...
We've tried to take a little time to digest the events of the last few days. I don't know if time helps or hurts perspective, but here goes.
The one size fits all auction on September 10th is probably an OK idea.
Judge Tom's job is to do the best possible work on behalf of the team's creditors. The franchise has two secured creditors -- MSD Capital and the NHL. To date, MSD has not reached an agreement with the Reinsdorf-Kaites-Tavares-Reinsdorf Jr. group on the status of the teams $80MM secured loan.
While all that is concerning, the truth is that these types of negotiations are often hard and dirty. MSD wants their money or a new secured loan and understanding on how it will be repaid. They are an investment company, not a traditional lender. It makes sense they would like to understand who their new partners are and how they are going to operate. Jerry's Kids want great terms, perhaps even more money to operate the franchise and a new toaster when the papers are signed. It's no different than when you or I go for a loan. (Well, it is a "little" different) At the end of the day, there will be a deal. If MSD doesn't take the deal then Team Reinsdorf will shop the loan to another investor/lender. They knows that secured creditors need to be paid. That is one of the few non-negotiables in this entire mess.
Financial markets are not easy to navigate right now but operatives like Reinsdorf Sr. and Tavares know their way around. And remember, negotiations by definition are often very contentious.
From the prospective of mollifying the largest secured creditor, Judge Tom did the right thing by pushing back and combining the auctions. He gave the largest secured creditor leverage. If he ruled Balsillie out at this point, MSD would have no leverage. And Judge Tom wouldn't have done his job properly.
The backdrop of this scrum has not changed. The NHL will fight to the death to make certain the league is run by their rules. That means we decide who can own a team and we decide where the team will play. If anything happens in bankruptcy court that tries to circumvent those rules, the NHL will immediately appeal and seek injunctive relief to prevent the rules from being discarded. It will set up a long string of lawsuits, counter lawsuits and rhetoric that will make your head spin.
The NHL also has to take care of its' civic responsibility. Getting a city to build an arena is not an easy undertaking. When that happens in a city where that was really beyond their means it's an even greater risk. The NHL not only has a moral obligation to Glendale but they also have to consider their relationship with every other city that has built or is considering a new arena through public funds. You would like to think that your partner is honorable.
Judge Tom has tried very hard not to get into these messy legal areas. He knows that a Balsillie bid may never be consummated even if he decides it is the best bid. That's a big anchor that will weigh heavily in his decisions.
The Reinsdorf-Kaites-Tavares-Reinsdorf Jr. group is not likely to pull their bid. They have a chance to buy a major league team with little or no money down. They will need money to operate but we are talking about a franchise that's worth a lot of money. The chance for a financial windfall is incredible.
Ice Edge still remains a wild card. Until their bid is filed and made public, their potential ownership remains a mystery. They seem to be doing the right things -- like reaching out to Save The Coyotes Chair Heather McWhorter -- but until their financing is fully vetted and their plan disclosed, they will remain a mystery.
And as for the infamous Glendale document detailing the concessions being sought by the Reinsdorf, I would caution is that the reports of what was proposed, was was being discussed etc. were in a filing that was only visible for 90 minutes. If the good folks at the Arizona Republic captured the entire document, I'd like to see it. I would imagine that like any political proposal there were nuances, trial balloons and other parts that are simply not being reported, either because they were not captured, not sexy enough to make the paper or they represent the Moyes' attorneys synopsis of the key points and little more. I can't imagine that the city council is voting on a one sheeter that has two points -- an 11% tax district and a $15MM yearly payment if the team is still losing $ in 5 years. There's got to be more. A lot more.
And so it goes. Every time this sad episode seems to be winding down, someone pops up and says "but wait, there's more". And there will no doubt be much more. with the next round schedule to go off on Tuesday AM.
The one size fits all auction on September 10th is probably an OK idea.
Judge Tom's job is to do the best possible work on behalf of the team's creditors. The franchise has two secured creditors -- MSD Capital and the NHL. To date, MSD has not reached an agreement with the Reinsdorf-Kaites-Tavares-Reinsdorf Jr. group on the status of the teams $80MM secured loan.
While all that is concerning, the truth is that these types of negotiations are often hard and dirty. MSD wants their money or a new secured loan and understanding on how it will be repaid. They are an investment company, not a traditional lender. It makes sense they would like to understand who their new partners are and how they are going to operate. Jerry's Kids want great terms, perhaps even more money to operate the franchise and a new toaster when the papers are signed. It's no different than when you or I go for a loan. (Well, it is a "little" different) At the end of the day, there will be a deal. If MSD doesn't take the deal then Team Reinsdorf will shop the loan to another investor/lender. They knows that secured creditors need to be paid. That is one of the few non-negotiables in this entire mess.
Financial markets are not easy to navigate right now but operatives like Reinsdorf Sr. and Tavares know their way around. And remember, negotiations by definition are often very contentious.
From the prospective of mollifying the largest secured creditor, Judge Tom did the right thing by pushing back and combining the auctions. He gave the largest secured creditor leverage. If he ruled Balsillie out at this point, MSD would have no leverage. And Judge Tom wouldn't have done his job properly.
The backdrop of this scrum has not changed. The NHL will fight to the death to make certain the league is run by their rules. That means we decide who can own a team and we decide where the team will play. If anything happens in bankruptcy court that tries to circumvent those rules, the NHL will immediately appeal and seek injunctive relief to prevent the rules from being discarded. It will set up a long string of lawsuits, counter lawsuits and rhetoric that will make your head spin.
The NHL also has to take care of its' civic responsibility. Getting a city to build an arena is not an easy undertaking. When that happens in a city where that was really beyond their means it's an even greater risk. The NHL not only has a moral obligation to Glendale but they also have to consider their relationship with every other city that has built or is considering a new arena through public funds. You would like to think that your partner is honorable.
Judge Tom has tried very hard not to get into these messy legal areas. He knows that a Balsillie bid may never be consummated even if he decides it is the best bid. That's a big anchor that will weigh heavily in his decisions.
The Reinsdorf-Kaites-Tavares-Reinsdorf Jr. group is not likely to pull their bid. They have a chance to buy a major league team with little or no money down. They will need money to operate but we are talking about a franchise that's worth a lot of money. The chance for a financial windfall is incredible.
Ice Edge still remains a wild card. Until their bid is filed and made public, their potential ownership remains a mystery. They seem to be doing the right things -- like reaching out to Save The Coyotes Chair Heather McWhorter -- but until their financing is fully vetted and their plan disclosed, they will remain a mystery.
And as for the infamous Glendale document detailing the concessions being sought by the Reinsdorf, I would caution is that the reports of what was proposed, was was being discussed etc. were in a filing that was only visible for 90 minutes. If the good folks at the Arizona Republic captured the entire document, I'd like to see it. I would imagine that like any political proposal there were nuances, trial balloons and other parts that are simply not being reported, either because they were not captured, not sexy enough to make the paper or they represent the Moyes' attorneys synopsis of the key points and little more. I can't imagine that the city council is voting on a one sheeter that has two points -- an 11% tax district and a $15MM yearly payment if the team is still losing $ in 5 years. There's got to be more. A lot more.
And so it goes. Every time this sad episode seems to be winding down, someone pops up and says "but wait, there's more". And there will no doubt be much more. with the next round schedule to go off on Tuesday AM.
Bill Daly Talks About The Coyotes
Click on the headline above to be linked to his XM interview this morning. The first 12 minutes talks about the Coyotes quandry.
Wednesday, August 5, 2009
Ed And John
An article in the Phoenix New Times has raised questions about the cozy relationship between Glendale City Manager Ed Beasley and potential Coyotes investor John Kaites.
The article notes that Beasley's calendar reveals he held "repeated meetings with both Kaites and (Jerry) Reinsdorf over the past year." Kaites and Beasley had "no fewer than four scheduled meetings or conference calls in August and September 2008, which is right about the time the Coyotes' ownership began asking City Hall for help."
While there is no reason to dispute the facts here, there is a context that appears to be missing. No matter when Jerry Moyes and Jeff Shumway started asking Glendale for help with the team, there is no question that long before August of 2008 the team was being quietly shopped. Ed Beasley would certainly have been aware of this. And as the Manager of a city with a lot of skin in the game, it makes all of the sense in the world that Beasley would be tapping into his client base to find possible ownership solutions for the team.
Bankruptcy Court Judge Redfield T. "Tom" Baum yesterday allowed Coyotes Owner Jerry Moyes to "have his lawyer question" Bulls and White Sox Chair Jerry Reinsdorf and Arizona attorney John Kaites about "possible collusion with Glendale officials or the NHL" in their bid to acquire the Coyotes, according to David Shoalts of the Tornoto Globe & Mail.
Is it collusion or collaboration? I think the latter.
Later today or tomorrow we will learn whether Judge Tom will allow Jim Balsillie to participate in any auction for the Coyotes. Balsillie, you may remember, was unanimously voted down by the NHL Governors as a potential owner last week. While there probably won't be any lawsuits over the initial judgement, down the line there will be legal ramifications. And they won't be pretty.
I spoke to a bankruptcy attorney this weekend about the way that bids for the Coyotes are being constructed. In both the Reinsdorf-Kaites-Tavares and Ice Edge bids, the great majority of the bid is the assumption of existing debt. I was told that this is not unusual and in fact it is the way most bankruptcies are adjudicated. Both organizations need to demonstrate the wherewithal to pay back the debt (and in this case that starts with the inherent value of the franchise) and will need operating capital going forward. But no cash assumptions are hardly a novelty.
More later today as the dogfight in the desert rolls on.
The article notes that Beasley's calendar reveals he held "repeated meetings with both Kaites and (Jerry) Reinsdorf over the past year." Kaites and Beasley had "no fewer than four scheduled meetings or conference calls in August and September 2008, which is right about the time the Coyotes' ownership began asking City Hall for help."
While there is no reason to dispute the facts here, there is a context that appears to be missing. No matter when Jerry Moyes and Jeff Shumway started asking Glendale for help with the team, there is no question that long before August of 2008 the team was being quietly shopped. Ed Beasley would certainly have been aware of this. And as the Manager of a city with a lot of skin in the game, it makes all of the sense in the world that Beasley would be tapping into his client base to find possible ownership solutions for the team.
Bankruptcy Court Judge Redfield T. "Tom" Baum yesterday allowed Coyotes Owner Jerry Moyes to "have his lawyer question" Bulls and White Sox Chair Jerry Reinsdorf and Arizona attorney John Kaites about "possible collusion with Glendale officials or the NHL" in their bid to acquire the Coyotes, according to David Shoalts of the Tornoto Globe & Mail.
Is it collusion or collaboration? I think the latter.
Later today or tomorrow we will learn whether Judge Tom will allow Jim Balsillie to participate in any auction for the Coyotes. Balsillie, you may remember, was unanimously voted down by the NHL Governors as a potential owner last week. While there probably won't be any lawsuits over the initial judgement, down the line there will be legal ramifications. And they won't be pretty.
I spoke to a bankruptcy attorney this weekend about the way that bids for the Coyotes are being constructed. In both the Reinsdorf-Kaites-Tavares and Ice Edge bids, the great majority of the bid is the assumption of existing debt. I was told that this is not unusual and in fact it is the way most bankruptcies are adjudicated. Both organizations need to demonstrate the wherewithal to pay back the debt (and in this case that starts with the inherent value of the franchise) and will need operating capital going forward. But no cash assumptions are hardly a novelty.
More later today as the dogfight in the desert rolls on.
Monday, August 3, 2009
I'm Mad as...Jerry, Glendale & Jerry
First, the important stuff...the auction for the Coyotes will be moved to September 10th at 9AM. Judge Tom will rule later this week if it's a local auction only or whether out of town interests will be welcome. Everyone will be back in court Wednesday. And hopefully, a few days will allow everyone to cool off a little.
Jerry Reinsdorf is livid because some of the details of the agreement he is negotiating with Glendale were inadvertently leaked to the media. The document described several proposals that the Reinsdorf-Kaites-Tavares group has made during negotiations with Glendale on how to raise millions in team revenue. Jerry is reportedly mad enough to walk away. We'll see. If he gets anything close to the deal that was leaked to local media outlets, he would be crazy to walk away.
The City of Glendale is mad too. When proposals like this are released only the goriest details make the newspapers. The Glendale representatives are livid because it "undermines the ability to get a deal negotiated with any bidder", according to their court brief. And of course, they lay the blame for the leak squarely at the feet of Jerry Moyes.
Jerry Moyes is mad too. Of course, he hasn't been very happy for a long time now. Maybe he should pay more attention to what he is buying in the future. He knows he won't see another dime if the team is sold to local interests and he is trying to salvage any money he can from this wreck. He may be a lifelong resident and supporter of Glendale but he is doing everything in his power to see the Coyotes leave Arizona. He watched last week as the NHL voted 29-0 to deny approval of Jim Balsillie as a potential owner. He knows that if a vote was ever held on moving the team to Hamilton, it would be an even longer shot. Dan Bickley had a great line today; "Moyes has a puncher's chance" of winning any type of favorable judgement. Yep, just like Oscar Bonavita had against Muhammed Ali.
No word whether Balsillie is mad but after being scorched by the NHL Governors, he can't be too thrilled. Aside from the unanimous vote, some of the quotes that have made their way into print have been pointed and nasty. Balsillie's chance of owning an NHL team depend strictly on Judge Tom's willingness to cram a sale down the leagues throat and force a move to Hamilton. Good luck Jim. If that ever did happen, the only happy people would be the lawyers who would get rich litigating this case for the next several years.
Meanwhile, no on has heard whether the folks at Ice Edge are mad too. It wouldn't surprise me though.
The leaked filings contained two controversial provisions; a special taxing district that would provide as much as $23 million next fiscal year through a "voluntary" surcharge on retail sales and a $15 million payment to the Coyotes against losses for each year of losses after 5 years. It's impossible to judge those ideas without understanding the full context of the plan. Neither sounds very plausible but keep in mind they are pieces pulled out of a document, not the entire plan. We'll wait until a more complete agreement between Glendale and the local bidders surfaces before passing judgement. And keep in mind, any deal would require approval by the elected members of the Glendale City Council.
Also remember that what sounds incredible may still be the best possible result for Glendale. The team is in bankruptcy and the City needs to make some accommodations to help the franchise. Doing nothing is not an alternative. The downside is an empty building that would be a aesthetic and financial disaster. This may be a place where half a loaf is better than crumbs and table scraps.
A couple of other points to share...
I can dispel one rumor that surfaced in a local publication today. The Coyotes didn't just go up for sale after the start of the 2008-09 season. The team was quietly shopped for at least 15 months prior to the bankruptcy. In March of 2008, I was introduced to the owner of a junior hockey franchise who knew I had a background in hockey and was moving to Phoenix. During the course of the conversation I was asked a number of questions about the Coyotes and my perception of their marketing and business practices. The individual in question told me that he could only share certain information because he had signed a non-disclosure agreement pertaining to the possible purchase and sale of a National Hockey League team. His clear inference (and the only reason he would have called me) was that it was the Coyotes.
And for people who wonder why does Jerry Reinsdorf want the Coyotes, the answer is almost certainly his son Michael. Michael has spent the last few years as the owner and operator of the wildly successful Stockton Thunder of the ECHL. We all would do anything for our kids. Why not set him up with a National Hockey League team?
This is all getting to be very old. Rather than wondering who will be playing on the second line or pondering another free agent signing, legal talk continues to hover over the team. The September 10th auction will come right as training camp is starting. I wonder who will be coaching the team that day.
And I wonder if anyone will be buying a ticket or a sponsorship until this is settled.
Jerry Reinsdorf is livid because some of the details of the agreement he is negotiating with Glendale were inadvertently leaked to the media. The document described several proposals that the Reinsdorf-Kaites-Tavares group has made during negotiations with Glendale on how to raise millions in team revenue. Jerry is reportedly mad enough to walk away. We'll see. If he gets anything close to the deal that was leaked to local media outlets, he would be crazy to walk away.
The City of Glendale is mad too. When proposals like this are released only the goriest details make the newspapers. The Glendale representatives are livid because it "undermines the ability to get a deal negotiated with any bidder", according to their court brief. And of course, they lay the blame for the leak squarely at the feet of Jerry Moyes.
Jerry Moyes is mad too. Of course, he hasn't been very happy for a long time now. Maybe he should pay more attention to what he is buying in the future. He knows he won't see another dime if the team is sold to local interests and he is trying to salvage any money he can from this wreck. He may be a lifelong resident and supporter of Glendale but he is doing everything in his power to see the Coyotes leave Arizona. He watched last week as the NHL voted 29-0 to deny approval of Jim Balsillie as a potential owner. He knows that if a vote was ever held on moving the team to Hamilton, it would be an even longer shot. Dan Bickley had a great line today; "Moyes has a puncher's chance" of winning any type of favorable judgement. Yep, just like Oscar Bonavita had against Muhammed Ali.
No word whether Balsillie is mad but after being scorched by the NHL Governors, he can't be too thrilled. Aside from the unanimous vote, some of the quotes that have made their way into print have been pointed and nasty. Balsillie's chance of owning an NHL team depend strictly on Judge Tom's willingness to cram a sale down the leagues throat and force a move to Hamilton. Good luck Jim. If that ever did happen, the only happy people would be the lawyers who would get rich litigating this case for the next several years.
Meanwhile, no on has heard whether the folks at Ice Edge are mad too. It wouldn't surprise me though.
The leaked filings contained two controversial provisions; a special taxing district that would provide as much as $23 million next fiscal year through a "voluntary" surcharge on retail sales and a $15 million payment to the Coyotes against losses for each year of losses after 5 years. It's impossible to judge those ideas without understanding the full context of the plan. Neither sounds very plausible but keep in mind they are pieces pulled out of a document, not the entire plan. We'll wait until a more complete agreement between Glendale and the local bidders surfaces before passing judgement. And keep in mind, any deal would require approval by the elected members of the Glendale City Council.
Also remember that what sounds incredible may still be the best possible result for Glendale. The team is in bankruptcy and the City needs to make some accommodations to help the franchise. Doing nothing is not an alternative. The downside is an empty building that would be a aesthetic and financial disaster. This may be a place where half a loaf is better than crumbs and table scraps.
A couple of other points to share...
I can dispel one rumor that surfaced in a local publication today. The Coyotes didn't just go up for sale after the start of the 2008-09 season. The team was quietly shopped for at least 15 months prior to the bankruptcy. In March of 2008, I was introduced to the owner of a junior hockey franchise who knew I had a background in hockey and was moving to Phoenix. During the course of the conversation I was asked a number of questions about the Coyotes and my perception of their marketing and business practices. The individual in question told me that he could only share certain information because he had signed a non-disclosure agreement pertaining to the possible purchase and sale of a National Hockey League team. His clear inference (and the only reason he would have called me) was that it was the Coyotes.
And for people who wonder why does Jerry Reinsdorf want the Coyotes, the answer is almost certainly his son Michael. Michael has spent the last few years as the owner and operator of the wildly successful Stockton Thunder of the ECHL. We all would do anything for our kids. Why not set him up with a National Hockey League team?
This is all getting to be very old. Rather than wondering who will be playing on the second line or pondering another free agent signing, legal talk continues to hover over the team. The September 10th auction will come right as training camp is starting. I wonder who will be coaching the team that day.
And I wonder if anyone will be buying a ticket or a sponsorship until this is settled.
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