Sunday, February 28, 2010

The Olympics, The Coyotes, The Trade Deadline, Ice Edge Holdings and a "No-Show Joe" Update

Today was a glorious day for hockey.

Much like 1980, there are dynamics that can never be duplicated. Canada on home ice. The upstart, overachieving US team. A one game winner take all. Sudden death overtime. And the backdrop of a glorious Olympic tournament. What a game. What a moment for hockey.

And for once NBC did the right thing by going live in all time zones with Olympic coverage. The US ratings will be huge, perhaps the best ever for a hockey game. And the resulting interest will help every level of the sport.

The winner today was hockey. For those of us who have loved the game for so many years, it was great to see our sport honored. And for those just joining us, there’s plenty of room (and beer) on the bandwagon. Hang on, it’s a great ride.

Now about those amazing Coyotes...

How can you not be impressed with this team? With 19 games left in the regular season, the Yotes have 79 points. That’s about 20 points better than you could have gotten odds on last October.

No one thing better illustrates the turnaround than the playoff ticket packages that were mailed to season tickets holders last week. Boy did they look good.

In late December we suggested that the Coyotes needed to be around 70 points by the end of January to be in position to reach the playoffs. That observation was based on an unfavorable home schedule beginning January 31st (just a small part of the mismanagement of the team) of 17 road games against 10 home games.

In January, the Coyotes experienced their most difficult stretch of the season. The Yotes went 4-5-1 and it started to look like the clock may have struck midnight.

Well, there’s nothing like a good road trip to end that conversation. After a late January win in Detroit, the Coyotes left Phoenix on January 30 with 69 points and went back on the road and won in Dallas, Nashville and Chicago. The first two teams are fighting for playoff spots and the Hawks have been among the elite in the NHL this year. It was a glorious trip that vaulted the Yotes into 4th place in the Western Conference and solidified their playoff standing.

Ilya Bryzgalov has been the team’s MVP and after a little rough stretch in January, he has snapped back to form. The Coyotes will need him down the stretch. With 79 points in the bank and 19 games remaining a .500 record will get the team into the playoffs. But now, with a playoff spot squarely in the crosshairs, the team is thinking bigger. Home ice in a 4-5 series against either Los Angeles or Colorado is a real possibility. With a sharp Bryzgalov, the team has a chance to gain home ice in the first round of the playoffs and gain a favorable first round matchup.

The NHL trade deadline approaches...

The Olympics have ended and at midnight the NHL reopens for trading. There will be 63hours until the deadline for deals at 3PM Eastern on Wednesday.

Now the spotlight will shift towards Don Maloney to see what he does to strengthen the team for a playoff run. Maloney had two commodities that most general managers don't have -- salary cap space and excess assets in the form of players not currently in the NHL and additional draft choices obtained in prior trades. For the first time in recent memory, the Coyotes will be buyers at the deadline. Maloney's shopping list will likely include a scoring forward and a depth defenseman.

Maloney was interviewed on a New York Rangers television broadcast before the break and he said that any moves the Coyotes make the balance of the year will be dollar for dollar moves. It will require some creative bookkeeping and ingenuity from GMDM to add the scoring he desperately needs as well as the 7th defenseman he craves.
Looking up and down the Coyotes roster, there’s really not many veterans the team would be willing to move. Kevin Porter is still a borderline prospect who might interest some teams. And we’ve heard that that former first draft choice Chris Summers hasn’t developed at Michigan as much as the Coyotes had hoped and might be available. There is plenty of additional salary in the Coyotes farm system that could be packaged with valuable assets to bring back reinforcements for the playoff push.

I don’t put much stock in Peter Mueller trade rumors. Mules has played much better in the last month and filled in capably when Scottie Upshall went down for the season with a torn ACL. The window for trading Mueller is probably past.

So what does all this mean? The Coyotes will probably have to package some useful assets (draft picks and unsigned players) with some dead wood salary to bring back a scorer. It would also be helpful if they were dealing with a team that has some financial flexibility. And Maloney doesn’t want to offer too many assets for a pure rental who has no interest in resigning in Phoenix.

All of which points to Toronto. The Leafs are in the middle of a full scale housecleaning and have made it clear that pretty much everyone is available. One player who might interest the Coyotes is Alexei Ponikarovsky. He’s a 29 year old center with a big body who is headed to a career best season with 19 goals and 40 points in 57 games. He has a $2.1MM cap hit and will be an unrestricted free agent at the end of the season.

Toronto needs draft picks to replenish the ones they traded to Boston for Phil Kessel as well as young players. It also helps that Don Maloney and Brian Burke are close friends. Toronto is the leagues richest franchise and can also bury money in the minor leagues to balance a deal. Porter, a salary and a draft pick (probably a 2nd) could bring Alexei to Phoenix. It makes sense because the Coyotes could use another center. In this scenario, Matt Lombardi might permanently swing outside, where he has played well.

And there’s a bonus with Ponikarovsky. While he’ll be an unrestricted free agent this summer, he could be a candidate to stay with the Coyotes. He will likely command a contract that will be in the Coyotes price range. If he likes it in Phoenix, he may be here longer than the average tenure of a rental.

There’s another target that would make even more sense – Keith Tkachuk. With history in Phoenix, not only could he help the team on the ice, he could also sell some tickets. That’s a nice bonus for a team still struggling at the gate. Tkachuk’s base salary is $2.1MM and he has $400K in bonuses available. The same package might interest St. Louis, which a team that is still wavering between being buyer and seller. If the Blues decide to be sellers, Tkachuk will almost certainly be moved somewhere. Tkachuk might not be available to play for a week due to a broken finger but he would add size, versatility and some pizzazz to the Coyotes. He is also a local name brand who could help sell a few tickets.

If Maloney can’t land a big fish, he’ll probably opt for a veteran player with playoff experience. Preferably one who can score a few goals and add depth to a veteran team. Two names to keep in mind are Carolina defenseman Aaron Ward and Atlanta Thrashers forward Colby Armstrong.

And finally…whatever happened to Ice Edge Holdings?

You remember Ice Edge? They signed a 30 day letter of intent to purchase the Coyotes 75 days ago.

I can’t often say I’ve spoken directly to Gary Bettman about an issue, but I can on this one. You see, I called his XM radio show a couple of weeks ago and asked what was going on with Ice Edge.

Bettman’s (very cool) reply? “These deals take time”. He went on to say that even though it was a 30 day letter of intent, “we have not set a deadline for closing the deal.” I tried to ask a follow up question but was cut off mid-question. Bettman and E.J. Hradek sounded a little sheepish about cutting me off however there was no additional discussion or clarification. It seemed to me that Bettman was not very interested in talking about Ice Edge.

His tone didn’t leave me with a warm fuzzy feeling.

There are three compelling reasons that a deal needs to be done soon. The first is that once the playoffs arrive, the Coyotes front office be starting work on next season. That can’t happen soon enough. The playoffs offer a tremendous opportunity to sell season tickets and sponsorships. Another lost summer would doom the franchise. The new ownership needs to be in place to allow fans and sponsors to buy with confidence.

The second and third reasons are Matthew Lombardi and Zbynek Michalek. Both are unrestricted free agents and both are vital parts of the Coyotes. Both will require a minimum three year commitment at least $3MM per year. That will need to come from new ownership.

Possible deal hang ups? There are 3 – long term financing of the group, the arena lease and the whole Saskatoon deal.

Ice Edge has the upfront money to close the purchase. The perspective owners have committed 90% of the purchase price in cash. I was told by an executive of another team that they have plenty of cash. What they may not have is the wherewithal to sustain large losses over a long period of time.

No one expects the Coyotes and the arena to start making money next year. There will be losses. The anticipated magnitude of the losses and the funding necessary to cover them greatly concerns the league. Having the dough in place to cover those losses is part of the greens fees for any purchase to be approved. The league has a number in mind and Ice Edge will have to satisfy the league they can absorb losses over a long enough period to outlive the recession and turn the profitability of the entity around.

One of the things that will help is a new lease arrangement with the City of Glendale. There has been a lot of rustling that indicates conversations are ongoing but secrecy has been the order of the day. You would like to think that something will be done soon here but until a deal is announced one has to withhold judgment.
And about Saskatoon, most people around the NHL agree that a five game package is not going to be approved by the league. We’ve suggested a more modest three game package might gain favor as a trial but there’s not a great appetite to split the schedule. That’s too bad because a few other NHL teams could benefit from a sister city program. If Saskatoon is off the table, you are looking at an additional $5MM in loss projections. Ice Edge is almost certainly looking to line up additional financing.

One way or another, this deal needs to be put to bed soon. Best case, done deal. Worst case, the team goes back on the market in time to entice new owners when the very exciting playoffs are going on.

Oh…and in case you were interested about how No-Show Joe did at the Olympics?

1 Goal in 7 games and a -1 for Thornton as a member of the gold medal winning Canadian team. The only Canadian forward who produced less was the lightly used Patrice Bergeron. As predicted here. Typical of his big game record.

He should package up his gold medal and send it to Shane Doan.

1 comment:

  1. Great article! I think you writing could help snag and retain a few new hockey fans too. Keep it up!