A lot can happen in a week.
On Monday night, NHL Commissioner Gary Bettman addressed the media in Chicago prior to the Hawks game with the Canucks. Most important nugget to Arizona hockey fans? A quote from his holiness that a deal to sell the Phoenix Coyotes to a group headed by Jerry Reinsdorf would be beneficial to the franchise and the league.
"It will be great for this league and that franchise if Jerry is able, with his partners, to consummate that transaction," Bettman said Monday night before Game 2 of the Western Conference semifinals between the Vancouver Canucks and Blackhawks.
And we all lived happily ever after. Right?
Not quite.
Like many sound bites, it faded quickly. The seemingly never ending ownership saga took some new and quite unexpected turns in the past 72 hours. First we heard from the well connected Darren Dreger that Ice Edge, the enthusiastic group of young businessmen, had gotten a call from the City of Glendale inviting them back to the dance. And then we learned that the NHL had asked (told may be more like it) Glendale to guarantee any losses the team might suffer in 2010-11 if new ownership could not be completed by the start of the league season (July 1st).
So what to make of all of this?
Well, we’ve done a little digging and will try to add some context to what is going on.
The NHL is running out of patience with the City of Glendale. The league is facing a June 30th deadline on which they will void the Jobing.Com Arena lease and send it back the Moyes estate if new owners are in place. They are also in the process of drawing the 2010-11 schedule and need to start firming up where this team will be playing next year. Typically the schedule is completed by the first week of July.
The NHL has been extremely patient with Glendale, the bidders and the process but now they are bringing the issue to a head. They have asked the City to guarantee any losses the team has if new owners are not in place by July 1. In effect, they will commit the team here for at least another year but they will not fund the losses.
The message to Glendale is clear – agree to fund the losses if they can’t make a deal with an owner or get a deal done with a buyer the league will approve. And fast. Even though both groups have been vetted by the NHL, there’s still a little matter of finalizing financing and getting the other team owners to approve the sale. Nothing is certain until the Board of Governors approves the transaction.
Let's clarify one important point. The league’s objective is not to have Glendale become the owner or the bankroll the team for an entire season. No one expects a government entity to cover the teams losses from city funds. Even in good times, that dog doesn’t hunt. What the league does want is assurances that Glendale won’t drag this dance on and the best way to do that is to apply significant economic pressure on the city.
And Glendale seems to have gotten the message. The proposal the Council will vote on funds any losses from the special district that will accompany the sale of the team. It’s the same mechanism that will generate more income from ticket surcharges, parking fees and some incremental taxes on the Westgate development to help new owners. And I’m guessing that the City fathers and mothers have already worked out what this means behind closed doors.
Now, about those new owners. At some point, the Team Reinsdorf and/or someone at the City of Glendale realized that the sweetheart deal cut to save the team might be very difficult to pull off. I don’t know who got cool feet first but it’s clear that someone flinched enough that the City decided to call Ice Edge and see if they had made other prom plans. Right now no one is confirming or denying the Reinsdorf deal is officially off but it’s seems shaky enough that Elaine Scruggs and Ed Beasley will likely be getting their ring back this week.
This of course, now brings Ice Edge back into the picture. For those of us who have communicated with the Ice Edge group formally or informally and the many Coyotes fans who have hung on every word of this soap opera, that’s good news. The perception is that these are good guys, they love hockey and as I have told you on several occasions, they have money. These are not the Little Sisters of the Poor trying to buy a hockey team.
And to Ice Edge’s credit, they are also applying some pretty big pressure to Glendale. You want a deal? Then we want to be your exclusive dance partner. When someone jilts you, paybacks can be a bear. Sometime in the next day or two (or perhaps already) it appears they will be getting an exclusive agreement that effectively means the Reinsdorf bid is off the table. And all of Glendale’s chips will now be squarely on their shoulders.
While the Reinsdorf brand may have the bigger reputation and the unabashed support of the Commissioner, I’m an Ice Edge guy. I just think these guys have the energy, acumen and enthusiasm to pull it off. They want to make money but they don’t seem to be in it just for the money. I like their style.
The drama resume on Tuesday. The Glendale Council will vote on the short term proposal to mollify the NHL. Once that proposal is passed, the negotiations with Ice Edge and the NHL will likely be at warp speed.
And if all this fails, we’ll all have a lot to talk about on Wednesday. Much of which won’t be good.
On a separate note I want to thank all of you who have called, written tweeted or texted me supporting the Western Hockey Exchange. I haven’t been able to write as much as I would like lately but I’ll try to stay on top of things in the next few days.
Showing posts with label Jerry Reinsdorf. Show all posts
Showing posts with label Jerry Reinsdorf. Show all posts
Sunday, May 9, 2010
Thursday, April 1, 2010
Glendale's Got (Skin In The) Game
The ball, or shall we say the puck, is in Glendale’s end of the ice. And time is running out.
From day one, we have contended both here and on our frequent calls to sports talk radio that sooner or later, Glendale will have to come forward with lease accommodations or the Coyotes will leave town. Now it’s not only playoff talk that’s heating up. The negotiations to sell the Coyotes have reached a critical stage. Expect news, perhaps big news, in the next few days.
There is a lot of pressure on the Glendale City Council. The Coyotes have become the hot team in town in recent weeks, with their tremendous regular season culminating in a playoff spot. What’s more, as long predicted, the city is responding to the team. Crowds are building. It seems like Coyotes players are everywhere on radio and television. Even chronically disinterested sportscasters like Dave Byrnes and Bob Kemp are starting to pay attention.
The Glendale City Council heard proposals from both groups on Tuesday. No action was taken. There’s been talk that the City is stalling to let Jerry Reinsdorf’s group further their negotiations but little solid proof that is the case. Reinsdorf’s insistence on some kind of an out clause could be a deal breaker for the city.
And while the Coyotes future is the most time sensitive issue, there are a lot of moving parts in Glendale right now. And most of them are moving in the wrong direction. The city continues to fight the Tohono O'odham Indian Nation over their plans to build a casino a mile north of Westgate. Construction has not yet started on the USA basketball development center. And the city’s Main Street development, which is intended to pay for much of the City’s Camelback Ranch debt, has been delayed by financing issues.
Now it doesn’t take a genius to figure out that a) the fate of the Coyotes, b) the construction of the basketball center and c) the lack of the Main Street development to pay for Camelback Ranch all have the potential to be revenue drains on the city. Big revenue drains. At a time where cities are scrambling to keep police and firemen on the street, it’s a litany of issues that Glendale doesn’t need.
The financial issues of car wash entrepreneur Danny Hendon haven’t helped either. Hendon had signed on to the Ice Edge group as an investor and was one of the lead players in financing the Main Street development. He and his money are occupied right now reorganizing his core businesses in bankruptcy court.
Of all of Glendale’s issues, only one, the proposed Tohono O'odham casino, is a potential revenue generator.
I believe the ultimate solution to all of these problems may in some way include revenue from the proposed Indian casino in Glendale. That's how Pittsburgh solved their arena problem. I could never understand why Glendale would not embrace a project that would create jobs and add excitement to the 101 corridor but I do know that money is the mother’s milk of politics. A revenue stream from a proposed casino could be the key to getting all of these disparate projects off the ground. I don’t know what form that may take but I do know the Tribe would certainly like to get building and be good local citizens. This may be their ticket to play in Glendale.
The relative quiet about the casino issue plus the clandestine nature of the Coyote negotiations suggest to me something big is going on. I wouldn’t be surprised if the NHL was briefed about negotiations when Gary Bettman and Bill Daly met with Glendale City officials two weeks ago. Glendale knows they must act to keep the team. They may in fact have already settled on a backup plan (i.e. the favored Coyotes offer) if a bigger deal cannot be struck. Remember, we are talking about politicians. They know that voters are in a firing mood right now. They want to settle this issue quickly and with the greatest possible benefit to Glendale.
The NHL has a lot of clout to wield. The “news” that the NHL can void the Glendale lease at the end of June is not a surprise to anyone who read the court filings last year. The league can’t (and won’t) carry the team forever. But here’s another one you may not have heard – the concert business at Jobing.com Arena is controlled by AEG, a major player in the NHL. AEG owns the Los Angeles Kings and Staples Center. Healthy concert revenue is the one bright spot in the arena’s business plan. Pull the plug on that relationship and Glendale has a building on their hands destined to become a very large warehouse. AEG has a nice fallback in the US Air Center if they ever decided to move their concert business.
Perhaps the most interesting morsel over the last few days came with Ice Edge hiring former Arizona Attorney General Grant Woods to finalize a new lease agreement with the city of Glendale. Woods is a skilled and experienced politician. He’s also highly respected around town. His presence on the Ice Edge team may neutralize any advantage that lobbyist John Kaites provided to the Reinsdorf group. Remember one thing about Ice Edge -- they are very serious.
And remember what we have previously told you. An NHL team executive told me that Ice Edge has the money to do the deal. “Plenty of money” was the exact quote. And from what we’ve read, they apparently have financing lined up from international powerhouse Deutsch Bank to finance the ongoing operation.
Winnipeg? I love the enthusiasm of hockey fans and I truly regret their loss but Winnipeg isn’t the NHL’s first choice to gain a new team. People seem to forget that the Jets were not particularly profitable either. Exactly three years out of 17 in the NHL. They left Winnipeg for a reason. The NHL has serious concerns about the ability of Winnipeg and Quebec City to return to the NHL because both cities do not have enough industry to produce the corporate support and sponsorships necessary for profitability. A second Toronto area team is far more likely to be added.
So as the off-ice issues continue to play out, we finally get to experience a playoff hockey game at the Job. That will be an extraordinary sight. We do know that the upper levels of the arena are essentially sold out for the first round of the playoffs and total ticket sales are around 12,000 per game. Once the dates are finalized and an opponent is known, I expect the demand for tickets will explode. We’ll be back with more insight on the playoffs once we know who the Coyotes will be playing.
And we’ll be watching the off-ice battles with the same tense anticipation.
From day one, we have contended both here and on our frequent calls to sports talk radio that sooner or later, Glendale will have to come forward with lease accommodations or the Coyotes will leave town. Now it’s not only playoff talk that’s heating up. The negotiations to sell the Coyotes have reached a critical stage. Expect news, perhaps big news, in the next few days.
There is a lot of pressure on the Glendale City Council. The Coyotes have become the hot team in town in recent weeks, with their tremendous regular season culminating in a playoff spot. What’s more, as long predicted, the city is responding to the team. Crowds are building. It seems like Coyotes players are everywhere on radio and television. Even chronically disinterested sportscasters like Dave Byrnes and Bob Kemp are starting to pay attention.
The Glendale City Council heard proposals from both groups on Tuesday. No action was taken. There’s been talk that the City is stalling to let Jerry Reinsdorf’s group further their negotiations but little solid proof that is the case. Reinsdorf’s insistence on some kind of an out clause could be a deal breaker for the city.
And while the Coyotes future is the most time sensitive issue, there are a lot of moving parts in Glendale right now. And most of them are moving in the wrong direction. The city continues to fight the Tohono O'odham Indian Nation over their plans to build a casino a mile north of Westgate. Construction has not yet started on the USA basketball development center. And the city’s Main Street development, which is intended to pay for much of the City’s Camelback Ranch debt, has been delayed by financing issues.
Now it doesn’t take a genius to figure out that a) the fate of the Coyotes, b) the construction of the basketball center and c) the lack of the Main Street development to pay for Camelback Ranch all have the potential to be revenue drains on the city. Big revenue drains. At a time where cities are scrambling to keep police and firemen on the street, it’s a litany of issues that Glendale doesn’t need.
The financial issues of car wash entrepreneur Danny Hendon haven’t helped either. Hendon had signed on to the Ice Edge group as an investor and was one of the lead players in financing the Main Street development. He and his money are occupied right now reorganizing his core businesses in bankruptcy court.
Of all of Glendale’s issues, only one, the proposed Tohono O'odham casino, is a potential revenue generator.
I believe the ultimate solution to all of these problems may in some way include revenue from the proposed Indian casino in Glendale. That's how Pittsburgh solved their arena problem. I could never understand why Glendale would not embrace a project that would create jobs and add excitement to the 101 corridor but I do know that money is the mother’s milk of politics. A revenue stream from a proposed casino could be the key to getting all of these disparate projects off the ground. I don’t know what form that may take but I do know the Tribe would certainly like to get building and be good local citizens. This may be their ticket to play in Glendale.
The relative quiet about the casino issue plus the clandestine nature of the Coyote negotiations suggest to me something big is going on. I wouldn’t be surprised if the NHL was briefed about negotiations when Gary Bettman and Bill Daly met with Glendale City officials two weeks ago. Glendale knows they must act to keep the team. They may in fact have already settled on a backup plan (i.e. the favored Coyotes offer) if a bigger deal cannot be struck. Remember, we are talking about politicians. They know that voters are in a firing mood right now. They want to settle this issue quickly and with the greatest possible benefit to Glendale.
The NHL has a lot of clout to wield. The “news” that the NHL can void the Glendale lease at the end of June is not a surprise to anyone who read the court filings last year. The league can’t (and won’t) carry the team forever. But here’s another one you may not have heard – the concert business at Jobing.com Arena is controlled by AEG, a major player in the NHL. AEG owns the Los Angeles Kings and Staples Center. Healthy concert revenue is the one bright spot in the arena’s business plan. Pull the plug on that relationship and Glendale has a building on their hands destined to become a very large warehouse. AEG has a nice fallback in the US Air Center if they ever decided to move their concert business.
Perhaps the most interesting morsel over the last few days came with Ice Edge hiring former Arizona Attorney General Grant Woods to finalize a new lease agreement with the city of Glendale. Woods is a skilled and experienced politician. He’s also highly respected around town. His presence on the Ice Edge team may neutralize any advantage that lobbyist John Kaites provided to the Reinsdorf group. Remember one thing about Ice Edge -- they are very serious.
And remember what we have previously told you. An NHL team executive told me that Ice Edge has the money to do the deal. “Plenty of money” was the exact quote. And from what we’ve read, they apparently have financing lined up from international powerhouse Deutsch Bank to finance the ongoing operation.
Winnipeg? I love the enthusiasm of hockey fans and I truly regret their loss but Winnipeg isn’t the NHL’s first choice to gain a new team. People seem to forget that the Jets were not particularly profitable either. Exactly three years out of 17 in the NHL. They left Winnipeg for a reason. The NHL has serious concerns about the ability of Winnipeg and Quebec City to return to the NHL because both cities do not have enough industry to produce the corporate support and sponsorships necessary for profitability. A second Toronto area team is far more likely to be added.
So as the off-ice issues continue to play out, we finally get to experience a playoff hockey game at the Job. That will be an extraordinary sight. We do know that the upper levels of the arena are essentially sold out for the first round of the playoffs and total ticket sales are around 12,000 per game. Once the dates are finalized and an opponent is known, I expect the demand for tickets will explode. We’ll be back with more insight on the playoffs once we know who the Coyotes will be playing.
And we’ll be watching the off-ice battles with the same tense anticipation.
Tuesday, October 27, 2009
Moyes Throws In The Towel
When Judge Tom tossed Jim Balsilie's bid for the Coyotes, the die was cast. If a potential suitor was not going to be allowed to buy and move the Coyotes, then the NHL would end up with the team. No one was about to bid against the league since the NHL would ultimately have to bless the new owners of the team.
So at the end of the day, Moyes cut his substantial losses and went home. If he had good legal counsel and got frank advice, he knew back in May that the bankruptcy and sale to Balsillie was a longshot. When you are looking at a $100MM haircut (on top of $100MM already sunk) and you have a certain Canadian gadfly ready to foot the legal bills, why not give it a shot?
He shot, and he missed. Hey, that's hockey.
There's a very pragmatic part of how the NHL has been funding the franchise. Technically, it's a secured loan to the "estate". The NHL has been fronting the cash but protected their interests by being a secured creditor. Translation? The costs of running the Coyotes until the sale is complete are being absorbed by the "estate". The money the league is spending for the franchise is partly to pay off the secured loans the league has been making to the team to keep the franchise operating. With the dollars available to Moyes dropping with each payroll, he finally decided to cut bait and close the deal.
So now, once a few more legal loose ends are cleaned up, the NHL will be the new owners of the Coyotes. And paying the bills with their money. Then the real sale process will take shape.
The anticipation is that the league wants to flip the franchise quickly. Most observers believe that the team will not have much of a chance of reversing attendance losses until new committed owners are in place.
But there are two issues yet to emerge. One is the asking price for the franchise. $140-150MM was a nice bankruptcy price. It was also the approximate price that Team Reinsdorf was willing to pay for the team in May. It may not be the league's asking price. And that could present a problem locating new owners. There's also a question about what the league's timeline for selling the team will look like.
I'd like to think that Gary Bettman and Bill Daly have been honest and forthright in their declarations that they intend to sell the team to owners who will keep the team in Phoenix. And they know full well that new owners will be looking at a minimum loss of $50MM before they can even think about righting the ship.
The last two warm weather teams to change hands were Nashville for $193MM and Tampa Bay at $200MM. Owners like to keep the price of teams inflated. A rising tide raises all ships, you know. We'll be curious to see if the league expects that kind of money for the troubled Coyotes or will be happy to recoup their $14o investment in the team..
Ice Edge Holdings continues to be a visible and aggressive suitor for the franchise. TV cameras were quick to pick up the ownership group sitting with Gary Bettman at Monday's Coyote-Ranger game. Ice Edge executives have an agreement in principal in place with the City of Glendale and seem to be trying to do things the right way. Unlike you know who.
The concern and caution is a) the asking price and b) the wherewithal of the group. If the NHL is content recouping their $140MM investment and Ice Edge has another $50-100MM ready for operating costs, they will be a strong contender to get the team. They could also be the only contender. It's expected that Jerry Reinsdorf and friends will reappear at some point and get in the bidding but that's not a sure thing. And while there may be others who will appreciate that the team can be purchased directly from the league without legal encumberments, there are no guarantees.
"Ice Edge isn't the only horse in the race," Daly wrote in an email yesterday to Sean Fitz-Gerald of The (Canadian) National Post. But Daly didn't name any other potential buyers.
It's also been reported that Wayne Gretzky isn't pleased that his interests haven't been addressed. That's unfortunate. While money is important, hockey's living legend deserves better treatment. Gretzky's approval is not required for the sale of the team to close but his interests go far beyond the dollars at stake. This is a fence that the league needs to mend and mend quicklky. With all other secured and unsecured creditors on board, his objections may not be enough to stop the deal.
So let the bankruptcy sale be closed and let the bidding begin. Soon.
The quicker something happens, and the sooner committed new owners are in place, the faster the NHL can look for a real turnaround for our home team.
And that can't happen soon enough.
So at the end of the day, Moyes cut his substantial losses and went home. If he had good legal counsel and got frank advice, he knew back in May that the bankruptcy and sale to Balsillie was a longshot. When you are looking at a $100MM haircut (on top of $100MM already sunk) and you have a certain Canadian gadfly ready to foot the legal bills, why not give it a shot?
He shot, and he missed. Hey, that's hockey.
There's a very pragmatic part of how the NHL has been funding the franchise. Technically, it's a secured loan to the "estate". The NHL has been fronting the cash but protected their interests by being a secured creditor. Translation? The costs of running the Coyotes until the sale is complete are being absorbed by the "estate". The money the league is spending for the franchise is partly to pay off the secured loans the league has been making to the team to keep the franchise operating. With the dollars available to Moyes dropping with each payroll, he finally decided to cut bait and close the deal.
So now, once a few more legal loose ends are cleaned up, the NHL will be the new owners of the Coyotes. And paying the bills with their money. Then the real sale process will take shape.
The anticipation is that the league wants to flip the franchise quickly. Most observers believe that the team will not have much of a chance of reversing attendance losses until new committed owners are in place.
But there are two issues yet to emerge. One is the asking price for the franchise. $140-150MM was a nice bankruptcy price. It was also the approximate price that Team Reinsdorf was willing to pay for the team in May. It may not be the league's asking price. And that could present a problem locating new owners. There's also a question about what the league's timeline for selling the team will look like.
I'd like to think that Gary Bettman and Bill Daly have been honest and forthright in their declarations that they intend to sell the team to owners who will keep the team in Phoenix. And they know full well that new owners will be looking at a minimum loss of $50MM before they can even think about righting the ship.
The last two warm weather teams to change hands were Nashville for $193MM and Tampa Bay at $200MM. Owners like to keep the price of teams inflated. A rising tide raises all ships, you know. We'll be curious to see if the league expects that kind of money for the troubled Coyotes or will be happy to recoup their $14o investment in the team..
Ice Edge Holdings continues to be a visible and aggressive suitor for the franchise. TV cameras were quick to pick up the ownership group sitting with Gary Bettman at Monday's Coyote-Ranger game. Ice Edge executives have an agreement in principal in place with the City of Glendale and seem to be trying to do things the right way. Unlike you know who.
The concern and caution is a) the asking price and b) the wherewithal of the group. If the NHL is content recouping their $140MM investment and Ice Edge has another $50-100MM ready for operating costs, they will be a strong contender to get the team. They could also be the only contender. It's expected that Jerry Reinsdorf and friends will reappear at some point and get in the bidding but that's not a sure thing. And while there may be others who will appreciate that the team can be purchased directly from the league without legal encumberments, there are no guarantees.
"Ice Edge isn't the only horse in the race," Daly wrote in an email yesterday to Sean Fitz-Gerald of The (Canadian) National Post. But Daly didn't name any other potential buyers.
It's also been reported that Wayne Gretzky isn't pleased that his interests haven't been addressed. That's unfortunate. While money is important, hockey's living legend deserves better treatment. Gretzky's approval is not required for the sale of the team to close but his interests go far beyond the dollars at stake. This is a fence that the league needs to mend and mend quicklky. With all other secured and unsecured creditors on board, his objections may not be enough to stop the deal.
So let the bankruptcy sale be closed and let the bidding begin. Soon.
The quicker something happens, and the sooner committed new owners are in place, the faster the NHL can look for a real turnaround for our home team.
And that can't happen soon enough.
Thursday, October 1, 2009
Our Long National Nightmare Is Over (Sort of...)
Well, at least one big issue is off the table.
Adios Mr. Balsillie. Seems like we hardly knew yee. Of course, we really had no desire to know yee. Please pack your moneybags and go back to Canada. (But you are welcome to visit anytime, our tourism industry needs your help)
Perhaps the best part of this decision is that we will no longer be treated to Jimberry's smiling picture framed by the Canadian flag every time we open a north of the border website reporting on the Coyotes. That had just gotten bleeping painful.
I won't rehash the entire judgement here but one simple sentence from page 25 pretty much summed it up..."This conclusion effectively is the end of the efforts of PSE, Balsillie, Moyes and The Coyotes to force a sale and relocation of the hockey team."
Thank you Judge Tom.
OK, so now the Balsillie option is off the table. What next?
We know that the Coyotes will play this year in Glendale, the NHL is in charge of revising their bid or finding a new owner and that if a favorable financial deal can be cut, hockey will be assured in Arizona for years to come.
Balsillie has already said he will not appeal. And through his lawyers, Moyes said they are considering next steps but trying to wage an appeal on bankruptcy and franchise law seems to be a longshot. There is no expedient path for an appeal. If Mr. Moyes decides to appeal, he will get on the end of the line and wait his turn in court. It will be a very long time before he will get a hearing, much less any satisfaction.
Of course, if he had competent legal counsel they would tell him that any appeal is a longshot. As I assume they told him when he first tried this whole bankruptcy/side door gambit.
But after watching his efforts as a team owner, I don't know if he would listen to sound legal advice if he got it.
So now the NHL has a clear shot at taking undisputed ownership of the Coyotes. They could continue as debtors in possession, revise their bid (as directed by Judge Baum) and become the interim owners or line up an alternate bidder (did someone say Jerry Reinsdorf?) to complete the purchase through bankruptcy.
And despite what you might have read, the NHL or other owners need not sweeten the pot by adding money to their bid. They could actually lower their offer. The only reason their bid was not accepted was that they tried to exclude claims by Moyes and Wayne Gretzky so that all other unsecured creditors would be paid. That won't happen without another hearing...before Judge Baum. Of course this could mean that some unsecured creditors don't get paid. That won't be good for the credibility of the team around town.
How the NHL chooses to handle this is probably under heavy discussion. The owners of the other teams would certainly prefer to minimize their losses. Lawyers are getting rich and the team continues to bleed cash. No one ever imagined that the league would have to fight to maintain their rights and constitution. That wasn't in the budget this year.
One would also theorize that new owners would prefer to get the team sooner rather than later to start rebuilding the fan base. If the Reinsdorf-Kaites-Tavares-Reinsdorf Jr. group or our friends from Ice Edge are still interested in the team, they now have a window to act.
One can also conclude that The City of Glendale would like to get this mess put away as soon as possible. Of course, that will come with a price for the City. The new owners, whoever they are, will require a new revised lease and the city either needs to pony up now or face more lawsuits and a possible departure of the team.
It would seem like all the elements are in place for quick action. Legal barriers have been removed. The NHL is back in charge, where they should have been all along. And its' in everyone's best interests to get a deal done as soon as possible.
Which would be a refreshing change from the tedious pace we've moved at over the last 5 months.
Adios Mr. Balsillie. Seems like we hardly knew yee. Of course, we really had no desire to know yee. Please pack your moneybags and go back to Canada. (But you are welcome to visit anytime, our tourism industry needs your help)
Perhaps the best part of this decision is that we will no longer be treated to Jimberry's smiling picture framed by the Canadian flag every time we open a north of the border website reporting on the Coyotes. That had just gotten bleeping painful.
I won't rehash the entire judgement here but one simple sentence from page 25 pretty much summed it up..."This conclusion effectively is the end of the efforts of PSE, Balsillie, Moyes and The Coyotes to force a sale and relocation of the hockey team."
Thank you Judge Tom.
OK, so now the Balsillie option is off the table. What next?
We know that the Coyotes will play this year in Glendale, the NHL is in charge of revising their bid or finding a new owner and that if a favorable financial deal can be cut, hockey will be assured in Arizona for years to come.
Balsillie has already said he will not appeal. And through his lawyers, Moyes said they are considering next steps but trying to wage an appeal on bankruptcy and franchise law seems to be a longshot. There is no expedient path for an appeal. If Mr. Moyes decides to appeal, he will get on the end of the line and wait his turn in court. It will be a very long time before he will get a hearing, much less any satisfaction.
Of course, if he had competent legal counsel they would tell him that any appeal is a longshot. As I assume they told him when he first tried this whole bankruptcy/side door gambit.
But after watching his efforts as a team owner, I don't know if he would listen to sound legal advice if he got it.
So now the NHL has a clear shot at taking undisputed ownership of the Coyotes. They could continue as debtors in possession, revise their bid (as directed by Judge Baum) and become the interim owners or line up an alternate bidder (did someone say Jerry Reinsdorf?) to complete the purchase through bankruptcy.
And despite what you might have read, the NHL or other owners need not sweeten the pot by adding money to their bid. They could actually lower their offer. The only reason their bid was not accepted was that they tried to exclude claims by Moyes and Wayne Gretzky so that all other unsecured creditors would be paid. That won't happen without another hearing...before Judge Baum. Of course this could mean that some unsecured creditors don't get paid. That won't be good for the credibility of the team around town.
How the NHL chooses to handle this is probably under heavy discussion. The owners of the other teams would certainly prefer to minimize their losses. Lawyers are getting rich and the team continues to bleed cash. No one ever imagined that the league would have to fight to maintain their rights and constitution. That wasn't in the budget this year.
One would also theorize that new owners would prefer to get the team sooner rather than later to start rebuilding the fan base. If the Reinsdorf-Kaites-Tavares-Reinsdorf Jr. group or our friends from Ice Edge are still interested in the team, they now have a window to act.
One can also conclude that The City of Glendale would like to get this mess put away as soon as possible. Of course, that will come with a price for the City. The new owners, whoever they are, will require a new revised lease and the city either needs to pony up now or face more lawsuits and a possible departure of the team.
It would seem like all the elements are in place for quick action. Legal barriers have been removed. The NHL is back in charge, where they should have been all along. And its' in everyone's best interests to get a deal done as soon as possible.
Which would be a refreshing change from the tedious pace we've moved at over the last 5 months.
Monday, September 7, 2009
The Coyote Saga Drags On
As much as things change in Coyotes Ugly, they really stay remarkably the same. Here are my takes on the last few days developments...
What are we to make of Judge Tom's court?
Not a lot new here.
When a bankruptcy is contentious, a judge will often send the competing interests a signal that they should negotiate among themselves by dragging his/her feet. This one is a mess. And Judge Tom is making it uncomfortable for everyone by reserving judgement, reading and researching and generally taking his sweet old time before issuing any judgements in the Coyotes case.
This type of behavior is common by judges in major bankruptcy proceedings. The Judge wants the sides to work things out. By keeping all options on the table, he increases pressure on all sides to make a deal.
Sooner or later, the Judge is going to have to make a decision. Someone will lose leverage and all hell is going to break loose. If Judge Tom allows Balsillie to bid in the auction, the NHL will immediately ask for a stay in the 9th District Court of Appeals to stop the auction. I spoke with a bankruptcy attorney yesterday who told me there is no mechanism for an accelerated hearing under these circumstances so any stay could delay the auction for a long time. And if Balsillie is booted from the auction, he doesn't have much of a legal leg to stand on but Moyes does. How aggressive and quickly he would act is certainly something to watch. Keep in mind he has lost a lot of money and stands to lose a lot more.
Brahm Resnick reported that Gary Bettman and Earl Scudder (Moyes Attorney) had a hallway conversation outside of Judge Tom's court. It would also make sense that there have been other back channel conversations. The prolonged bankruptcy action has sucked an awful lot of air out of the franchise and it is in everyone's best interests to end this circus soon.
Looking back on Judge Tom's ruling from June, it's clear to me he has a healthy respect for franchise law. I just can't imagine he is going to throw the rules of franchising and all professional sports leagues out on their collective ear. And I think that judgement is probably being waived in Earl Scudder's face by the NHL right now as an incentive to negotiate with the league.
The NHL is standing on principle. The Moyes/Balsillie bid is based on money. In these cases money is often more easily compromised than principle.
Meanwhile Balsillie sweetens the pot.
Late yesterday we learned that Balsillie is trying to negotiate a release with the City of Glendale that would give the COG (up to) a $50MM payment to release the Coyotes from any lease obligations. Breaking the offer down, it's an increase of $30MM to his base $212.5MM offer -- with the additional $20MM coming directly out of and money that would be paid to Jerry Moyes. And $10MM of the offer is contingent on the NHL relocation fee (if we ever got that far)being below $15MM -- something that is never going to happen.
So the real offer is $232.5MM with the likelihood of $40MM going to COG.
This was inevitable. Balsillie wants to negotiate everything. By putting a price on the offer, he is trying to goad Glendale into a negotiation. Let's say that they come back to him and say, "OK, we'll release you from the lease for $120MM". His next step? Offer a compromise at $95MM.
This is how the guy operates.
The real risk with Balsillie is that once you agree to put a price on something, he will pay it. He has (close to) unlimited funds. That is why the NHL has been so slow to talk about a relocation or indemnification fee. Give him a firm price and it is game over.
Unless the Glendale City Council wants to take the money and fold their hand, this dog won't hunt.
So?
Consider this. Under Balsillie's new offer, Moyes is down to a possible $60MM recovery. Perhaps the NHL will strengthen their offer by $5-10MM. See the gap narrowing?
See the negotiation ongoing.
How About Some Hockey Stuff? The Coyotes Sign Taylor Pyatt.
Nice role player who has never played to his size or potential. Another GMDM value signing. Given the Coyotes internal budget, probably the last addition to the team unless there's a trade that sends salary back the other way.
Pyatt suffered a horrific personal tragedy last spring when his fiance was killed in an automobile accident. He came back and played for the 'Nucks in the playoffs but was not signed to a new contract.
He'll give the team experience and stability on the left side.
Oh, and by the way, who is going to coach the Coyotes this year?
This question hasn't changed since I left town. It's either Wayne of Ulf.
One of my spies told me that the team website briefly posted a story that announced Ulf Samuelsson as the team's new coach. It was quickly pulled.
Now this could have been a web site party crasher at work or a just in case story (sort of like an obituary) that is prepared in anticipation of an event happening. On the other hand, it may be fact.
If it ain't Wayne, it's almost certainly going to be Ulf. Be prepared. The Coyotes PR team certainly is. And if Samuelsson is named as the team's coach, the biggest intrigue will be whether it is an interim or permanent appointment.
What are we to make of Judge Tom's court?
Not a lot new here.
When a bankruptcy is contentious, a judge will often send the competing interests a signal that they should negotiate among themselves by dragging his/her feet. This one is a mess. And Judge Tom is making it uncomfortable for everyone by reserving judgement, reading and researching and generally taking his sweet old time before issuing any judgements in the Coyotes case.
This type of behavior is common by judges in major bankruptcy proceedings. The Judge wants the sides to work things out. By keeping all options on the table, he increases pressure on all sides to make a deal.
Sooner or later, the Judge is going to have to make a decision. Someone will lose leverage and all hell is going to break loose. If Judge Tom allows Balsillie to bid in the auction, the NHL will immediately ask for a stay in the 9th District Court of Appeals to stop the auction. I spoke with a bankruptcy attorney yesterday who told me there is no mechanism for an accelerated hearing under these circumstances so any stay could delay the auction for a long time. And if Balsillie is booted from the auction, he doesn't have much of a legal leg to stand on but Moyes does. How aggressive and quickly he would act is certainly something to watch. Keep in mind he has lost a lot of money and stands to lose a lot more.
Brahm Resnick reported that Gary Bettman and Earl Scudder (Moyes Attorney) had a hallway conversation outside of Judge Tom's court. It would also make sense that there have been other back channel conversations. The prolonged bankruptcy action has sucked an awful lot of air out of the franchise and it is in everyone's best interests to end this circus soon.
Looking back on Judge Tom's ruling from June, it's clear to me he has a healthy respect for franchise law. I just can't imagine he is going to throw the rules of franchising and all professional sports leagues out on their collective ear. And I think that judgement is probably being waived in Earl Scudder's face by the NHL right now as an incentive to negotiate with the league.
The NHL is standing on principle. The Moyes/Balsillie bid is based on money. In these cases money is often more easily compromised than principle.
Meanwhile Balsillie sweetens the pot.
Late yesterday we learned that Balsillie is trying to negotiate a release with the City of Glendale that would give the COG (up to) a $50MM payment to release the Coyotes from any lease obligations. Breaking the offer down, it's an increase of $30MM to his base $212.5MM offer -- with the additional $20MM coming directly out of and money that would be paid to Jerry Moyes. And $10MM of the offer is contingent on the NHL relocation fee (if we ever got that far)being below $15MM -- something that is never going to happen.
So the real offer is $232.5MM with the likelihood of $40MM going to COG.
This was inevitable. Balsillie wants to negotiate everything. By putting a price on the offer, he is trying to goad Glendale into a negotiation. Let's say that they come back to him and say, "OK, we'll release you from the lease for $120MM". His next step? Offer a compromise at $95MM.
This is how the guy operates.
The real risk with Balsillie is that once you agree to put a price on something, he will pay it. He has (close to) unlimited funds. That is why the NHL has been so slow to talk about a relocation or indemnification fee. Give him a firm price and it is game over.
Unless the Glendale City Council wants to take the money and fold their hand, this dog won't hunt.
So?
Consider this. Under Balsillie's new offer, Moyes is down to a possible $60MM recovery. Perhaps the NHL will strengthen their offer by $5-10MM. See the gap narrowing?
See the negotiation ongoing.
How About Some Hockey Stuff? The Coyotes Sign Taylor Pyatt.
Nice role player who has never played to his size or potential. Another GMDM value signing. Given the Coyotes internal budget, probably the last addition to the team unless there's a trade that sends salary back the other way.
Pyatt suffered a horrific personal tragedy last spring when his fiance was killed in an automobile accident. He came back and played for the 'Nucks in the playoffs but was not signed to a new contract.
He'll give the team experience and stability on the left side.
Oh, and by the way, who is going to coach the Coyotes this year?
This question hasn't changed since I left town. It's either Wayne of Ulf.
One of my spies told me that the team website briefly posted a story that announced Ulf Samuelsson as the team's new coach. It was quickly pulled.
Now this could have been a web site party crasher at work or a just in case story (sort of like an obituary) that is prepared in anticipation of an event happening. On the other hand, it may be fact.
If it ain't Wayne, it's almost certainly going to be Ulf. Be prepared. The Coyotes PR team certainly is. And if Samuelsson is named as the team's coach, the biggest intrigue will be whether it is an interim or permanent appointment.
Saturday, August 29, 2009
A Rock > Glendale < A Hard Place
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.
"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.
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.
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.
Thursday, July 30, 2009
Coyote Auction Delay?
Just when things seemed to be sailing smoothly towards a definitive auction of the Coyotes next Wednesday, there's a turd in the punch bowl. The Toronto Star is reporting in their Friday editions that attorneys for Glendale and the NHL have asked the court to postpone next Wednesday's local bid auction, saying Reinsdorf and another potential bidder, Ice Edge Holdings of Canada, needed additional time to finalize their offers for the team.
The league's brief to the court also said that the Ice Edge group would make their bid public on Friday.
The report went on to say that the City of Glendale is "very close to a definitive agreement...that would allow the team, under new ownership, to continue to play at the Jobing.com Arena."
This news came hours after attorneys for Jerry Moyes ridiculed the Reinsdorf-Kaites-Tavares group offer of $148MM saying that the offer was not a legal offer under bankruptcy law. well, what did you expect them to do?
Update Friday 8:30 AM .. More complete reports of the NHL motions are now coming out. It appears that the NHL is taking the position that since the Balsillie has been denied as a potential owner, he is not eligible to bid in the second auction and as the only bidder interested in moving the team there is no need for a second auction. Of course, Moyes will continue to argue that Balsillie is the only person who has made a bona fide offer. And The Judge may still not look kindly on this bit of last minute chicanery.
The league's brief to the court also said that the Ice Edge group would make their bid public on Friday.
The report went on to say that the City of Glendale is "very close to a definitive agreement...that would allow the team, under new ownership, to continue to play at the Jobing.com Arena."
This news came hours after attorneys for Jerry Moyes ridiculed the Reinsdorf-Kaites-Tavares group offer of $148MM saying that the offer was not a legal offer under bankruptcy law. well, what did you expect them to do?
Update Friday 8:30 AM .. More complete reports of the NHL motions are now coming out. It appears that the NHL is taking the position that since the Balsillie has been denied as a potential owner, he is not eligible to bid in the second auction and as the only bidder interested in moving the team there is no need for a second auction. Of course, Moyes will continue to argue that Balsillie is the only person who has made a bona fide offer. And The Judge may still not look kindly on this bit of last minute chicanery.
Wednesday, July 29, 2009
Reinsdorf Bid Approved, Balsillie Shut Out
The National Hockey League Governors made it clear that the Reinsdorf-Kaites-Tavares group is welcome in their fraternity and approved to purchase the Coyotes. Similarly, they bounced Silly Jim out of the room. The Ice Edge Group got an incomplete (but favorable comments) on their presentation.
So.....The Reinsdorf Group is cleared to bid in the auction knowing that they will be approved by the league. The Balsillie's have no real leverage because no matter how good their bid is they have been unanimously denied membership in the NHL lodge. And the Ice Edge group has another 10 days to come up with a lot of money and a plan to put in front of Judge Tom next Friday.
Updates 4:55PM: "All that was considered was the suitability of owners", according to NHL Comissioner Gary Bettman. "This has nothing to do with the relocation issues", Bettman continued. So let's be very clear -- the NHL has rejected Jim Balsillie as a potential owner. While he was approved by the NHL five years ago as the perspective owner of the Pittsburgh Penguins the league Governors have now voted against him. Amazing what backing out of a purchase deal in Pittsburgh and trying to circumvent league rules can do for one's standing. Even though the Balsillie group is trying to put a positive spin on this, facts are facts. Jim Balsillie will not be approved as an owner in the National Hockey League. There may be more motions but the fact is that Judge Tom made it very clear that NHL owners had the right to approve perspective owners. It also means his bid to take over the Coyotes is worthless.
CHICAGO – National Hockey League Commissioner Gary Bettman issued the following statement following today’s Board of Governors meeting:
“The National Hockey League’s Board of Governors met this afternoon to review the ownership applications of three prospective ownership groups for the Phoenix Coyotes. The Board’s process today represents the League’s best efforts to comply with the League’s review procedures pursuant to NHL Constitution Article 3.5 and NHL By-Law 35 within the timetable imposed by the ongoing court process.
“There were three applicant groups that were interviewed by the Executive Committee and considered by the Board. One was Jim Balsillie’s. The second was a group headed by Anthony LeBlanc, involving Mr. LeBlanc, Keith McCullough, Todd Jordan and Daryl Jones. And the third group, headed by Jerry Reinsdorf, included as well Tony Tavares and John Kaites.
“After interviewing all of the applications, the Executive Committee brought forward recommendations to the full Board of Governors.
“Mr. Reinsdorf’s application was unanimously approved by all those Board members present and voting, subject to the League’s completion of its due diligence and review of the final transaction. In Mr. Balsillie’s case, it was the unanimous vote of all members present and voting that his application not be approved. With respect to the LeBlanc group, it was determined that, at this stage, since they’ve only recently begun the process, the application was incomplete and could not yet be acted on by the Board. However, the Executive Committee reported favorably on the LeBlanc group’s interview and endorsed the group’s continued efforts to complete a bid to purchase the franchise.
“We will so advise the Bankruptcy Court and we will move this process forward.”
So.....The Reinsdorf Group is cleared to bid in the auction knowing that they will be approved by the league. The Balsillie's have no real leverage because no matter how good their bid is they have been unanimously denied membership in the NHL lodge. And the Ice Edge group has another 10 days to come up with a lot of money and a plan to put in front of Judge Tom next Friday.
Updates 4:55PM: "All that was considered was the suitability of owners", according to NHL Comissioner Gary Bettman. "This has nothing to do with the relocation issues", Bettman continued. So let's be very clear -- the NHL has rejected Jim Balsillie as a potential owner. While he was approved by the NHL five years ago as the perspective owner of the Pittsburgh Penguins the league Governors have now voted against him. Amazing what backing out of a purchase deal in Pittsburgh and trying to circumvent league rules can do for one's standing. Even though the Balsillie group is trying to put a positive spin on this, facts are facts. Jim Balsillie will not be approved as an owner in the National Hockey League. There may be more motions but the fact is that Judge Tom made it very clear that NHL owners had the right to approve perspective owners. It also means his bid to take over the Coyotes is worthless.
Today In Chicago
The NHL Board of Governors is meeting in Chicago. Among the special guests are Jim Balsillie, he of the Hamilton Coyotes and the perspective Ice Edge ownership. Although it has not been publicized, it's also expected that some representatives of the Reinsdorf-Kaites-Tavares ownership group will be in attendance. Presumably the NHL Governors will be vetting all three bids for the Coyotes.
And even though there are three groups in the running the decision should be easy. Ice Edge still hasn't submitted a formal bid and one of the owners admitted on XTRA Sports that he still didn't have all of the necessary financing lined up. Balsillie will be grilled like he's never been grilled before. Why did you try to circumvent the league constitution? Why did you back out of the Penguins purchase? Why did you even bother coming today? The Governors may add a little juice to the proceedings by formally torpedoing any franchise move to Hamilton. No need to vote up or down on Balsillie because that would only add fuel to the legal fire.
Thanks for playing fellas and drive home safely.
For Jerry, John & Tony, this is a layup. They already have Gary Bettman's papal blessing. Show up, make nice to the other Governors -- many of whom you already know from the NBA and MLB, confirm your business plan and let everyone know how honored you are to be a part of saving hockey in Phoenix.
Hopefully we'll be hearing positive news leaking out of Chicago as soon as the first Governor has to run for a plane.
And even though there are three groups in the running the decision should be easy. Ice Edge still hasn't submitted a formal bid and one of the owners admitted on XTRA Sports that he still didn't have all of the necessary financing lined up. Balsillie will be grilled like he's never been grilled before. Why did you try to circumvent the league constitution? Why did you back out of the Penguins purchase? Why did you even bother coming today? The Governors may add a little juice to the proceedings by formally torpedoing any franchise move to Hamilton. No need to vote up or down on Balsillie because that would only add fuel to the legal fire.
Thanks for playing fellas and drive home safely.
For Jerry, John & Tony, this is a layup. They already have Gary Bettman's papal blessing. Show up, make nice to the other Governors -- many of whom you already know from the NBA and MLB, confirm your business plan and let everyone know how honored you are to be a part of saving hockey in Phoenix.
Hopefully we'll be hearing positive news leaking out of Chicago as soon as the first Governor has to run for a plane.
Monday, July 27, 2009
Catching Up
Been away for a few days at a family wedding so it's time to catch up on the headlines...
The Reinsdorf-Kaites-Tavares Bid is in and among other things it details the assumption of 170 contracts of player and hockey management (as well as sponsorships and suite holders) but not Wayne Gretzky. Given that the bankruptcy bid does not give Gretzky a dime of the money he is owed, it's not like they are trying to make nice with hockey's living legend. Discussion boards and forums like this will be rife with "who will coach the Coyotes" posts shortly. It's sad to see Wayne go under such uncomfortable circumstances but he's not been a success as a coach or marketing ambassador for the franchise. You just think that legends who happen to be nice people deserve better.
It also looks like the management side of the organization will be completely gutted. Our great friend Doug Moss, CFO Mike Nealy and Arena Manager Jim Foss all have contracts that will not be assumed by the new owners. Broadcasters Dave Strader, Bob Heethuis and Tyson Nash are also on the "no thanks" list although new contracts could be arranged with some or all. And keep in mind that several executives who do not have contracts were probably working the old fashioned way; on handshakes. There are going to be a lot of employment at will conversations going on in Glendale if the R-K-T bid is accepted.
There are some good people losing out here. Doug Moss is a great guy and experienced leader, Strader is the best television announcer in the game and Heethuis is an excellent and under appreciated radio announcer.
That, my friends, is the dark side of bankruptcy.
Much of this speaks to the Glendale report that says the organization could be streamlined and run at a significantly lower cost. We agree. Our friends at the Suns have told us that even before the NBA team and the US Airways Arena started contracting their organization, they were still staffed leaner than the Coyotes/Jobing.com Arena group. This was an accident waiting to happen. Now the Reinsdorf-Kaites-Tavaers group can come in, start with a fresh slate and put toggether a lean, effective organization.
On the other hand. The potential bid from Ice Edge raises a bunch of questions. To quote Brahm Resnick, it is "very edgy" to say the least. Two big ahas; they want to give Gretzky a contract to coach and be a franchise ambassador. with a lucrative playoff bonus and play at least 5 home games in a Canadian city. Oh, and right now it's a letter of intent, not a real bid. That supposedly is coming in the next few days.
The Ice Edge group includes Coyotes minority owner John Breslow among its investors. One of the key figures is Anthony LeBlanc, a former Research in Motion executive.
This bid is good news in many ways for the NHL. It is a weaker presentation that dimensionalizes the R-K-T bid as much better for Glendale. It answers the question of what happened to the John Breslow group that was bidding on the team. And it creates at least the impression of competition that the judge was hoping to encourage.
It is also dead on arrival. Neither the NHL nor the NHLPA is likely to approve of a split city concept. Saskatoon, one of the cities mentioned as a possible occasional home for the Yotes, was laughed away by the NHL when St. Louis tried to move there 20 years ago. It hasn't exactly boomed since then.
The Ice Edge group is meeting with the NHL executive board on Wednesday. It could be the beginning or the end of the bid process for that group.
Derek Morris to Boston...The Bruins needed a puck moving defenseman in the worst way. In Morris, they get a player who last year was a puck moving defenseman in the worst way. Terrible enough in Phoenix that Don Maloney opted instead to go with Adrian Aucoin as his right handed defensive signing rather than bringing Morris back. A little better in New York but still relegated to third pair status during the playoffs. We're happy for Derek who by all accounts is a good guy but this seems like an ill advised move for the Bruins. It's a one year contract which means Morris steps right back into a contract year.
And finally a couple of new contracts -- Dan Winnik gets $600K in arbitration with the Yotes and Enver Lisin signs a one year deal with the New York Rangers for $790,000.
More to come later today...
The Reinsdorf-Kaites-Tavares Bid is in and among other things it details the assumption of 170 contracts of player and hockey management (as well as sponsorships and suite holders) but not Wayne Gretzky. Given that the bankruptcy bid does not give Gretzky a dime of the money he is owed, it's not like they are trying to make nice with hockey's living legend. Discussion boards and forums like this will be rife with "who will coach the Coyotes" posts shortly. It's sad to see Wayne go under such uncomfortable circumstances but he's not been a success as a coach or marketing ambassador for the franchise. You just think that legends who happen to be nice people deserve better.
It also looks like the management side of the organization will be completely gutted. Our great friend Doug Moss, CFO Mike Nealy and Arena Manager Jim Foss all have contracts that will not be assumed by the new owners. Broadcasters Dave Strader, Bob Heethuis and Tyson Nash are also on the "no thanks" list although new contracts could be arranged with some or all. And keep in mind that several executives who do not have contracts were probably working the old fashioned way; on handshakes. There are going to be a lot of employment at will conversations going on in Glendale if the R-K-T bid is accepted.
There are some good people losing out here. Doug Moss is a great guy and experienced leader, Strader is the best television announcer in the game and Heethuis is an excellent and under appreciated radio announcer.
That, my friends, is the dark side of bankruptcy.
Much of this speaks to the Glendale report that says the organization could be streamlined and run at a significantly lower cost. We agree. Our friends at the Suns have told us that even before the NBA team and the US Airways Arena started contracting their organization, they were still staffed leaner than the Coyotes/Jobing.com Arena group. This was an accident waiting to happen. Now the Reinsdorf-Kaites-Tavaers group can come in, start with a fresh slate and put toggether a lean, effective organization.
On the other hand. The potential bid from Ice Edge raises a bunch of questions. To quote Brahm Resnick, it is "very edgy" to say the least. Two big ahas; they want to give Gretzky a contract to coach and be a franchise ambassador. with a lucrative playoff bonus and play at least 5 home games in a Canadian city. Oh, and right now it's a letter of intent, not a real bid. That supposedly is coming in the next few days.
The Ice Edge group includes Coyotes minority owner John Breslow among its investors. One of the key figures is Anthony LeBlanc, a former Research in Motion executive.
This bid is good news in many ways for the NHL. It is a weaker presentation that dimensionalizes the R-K-T bid as much better for Glendale. It answers the question of what happened to the John Breslow group that was bidding on the team. And it creates at least the impression of competition that the judge was hoping to encourage.
It is also dead on arrival. Neither the NHL nor the NHLPA is likely to approve of a split city concept. Saskatoon, one of the cities mentioned as a possible occasional home for the Yotes, was laughed away by the NHL when St. Louis tried to move there 20 years ago. It hasn't exactly boomed since then.
The Ice Edge group is meeting with the NHL executive board on Wednesday. It could be the beginning or the end of the bid process for that group.
Derek Morris to Boston...The Bruins needed a puck moving defenseman in the worst way. In Morris, they get a player who last year was a puck moving defenseman in the worst way. Terrible enough in Phoenix that Don Maloney opted instead to go with Adrian Aucoin as his right handed defensive signing rather than bringing Morris back. A little better in New York but still relegated to third pair status during the playoffs. We're happy for Derek who by all accounts is a good guy but this seems like an ill advised move for the Bruins. It's a one year contract which means Morris steps right back into a contract year.
And finally a couple of new contracts -- Dan Winnik gets $600K in arbitration with the Yotes and Enver Lisin signs a one year deal with the New York Rangers for $790,000.
More to come later today...
Tuesday, July 7, 2009
Dead Legend Walking
This is a real difficult blog to write. Because, I feel like I am writing Wayne Gretzky’s obituary as the coach of the Phoenix Coyotes.
Watching the game’s living legend be knocked around over the past few weeks has been a painful experience. He’s clearly a Canadian first and with the swirling controversy over Jim Balsillie and Hamilton, he doesn’t want to say or do anything that is not reverent to his birthplace. He is the living icon of the National Hockey League. No athlete, great or otherwise has ever shown the game more respect than Gretzky. He’s also the coach – and ostensibly the head of hockey operations for the Coyotes – and it’s a job he desperately wants to keep.
Each day that passes that seems less likely.
For starters Gretzky stayed away from the NHL draft and meetings last month in Montreal. He has been conspicuously absent in the discussion of the Coyotes off season player moves. His compensation (rightly so) was ripped in a study of Coyote team expenses. Rumors have been circulating that he won’t be welcome in the Reinsdorf-Kaites-Tavares organization. And Glendale has called into question his standing as a creditor in the Coyotes bankruptcy.
You can read more about Glendale and Gretzky here:
http://www.theglobeandmail.com/sports/hockey/glendale-takes-aim-at-great-one/article1204887/
It’s a sad turn of events. At first he was clearly out of his element behind the bench. In the last two years, he’s grown in the job and seemed to enjoy it more than in prior years. His teams played hard even if they were not particularly well schooled. Now the vibe seems to be that he really wants to keep the job, is willing to take a substantial pay cut to keep it but may not get the chance.
New ownership is keeping their mouths shut until the bankruptcy purchase is completed but you get the sense that a late summer coaching change is imminent. While there is hockey and business justification for a coaching change, there is still an emotional tug that says he’s the greatest player who ever played the game and someone who has always honored the game. He deserves better.
Wayne Gretzky won’t get fired. If the decision is made to end his association with the Coyotes, he will resign gracefully. Because that is his style. And while he has not been the great one as a coach, he has handled a difficult situation with grace and composure. Wayne Gretzky has never demanded the spotlight – it always found him. Now he lurks in the background as a creditor, a financial albatross and a supporting actor in a play that has gone horribly wrong. It is so uncomfortable.
I’m reminded of a comment that was made about Wayne when he played and lived in LA. “He’s a great, hockey player” a business associate once told me, “but he’s an even better human being”. Good people deserve better.
If Wayne’s World is indeed closing, we’ll be watching a chapter of his remarkable career without a happy ending. And we all will be watching an opportunity slip away that started with so much promise but now is eclipsed by an economic struggle for survival.
Somehow, we’ll all be a little poorer for the experience.
Watching the game’s living legend be knocked around over the past few weeks has been a painful experience. He’s clearly a Canadian first and with the swirling controversy over Jim Balsillie and Hamilton, he doesn’t want to say or do anything that is not reverent to his birthplace. He is the living icon of the National Hockey League. No athlete, great or otherwise has ever shown the game more respect than Gretzky. He’s also the coach – and ostensibly the head of hockey operations for the Coyotes – and it’s a job he desperately wants to keep.
Each day that passes that seems less likely.
For starters Gretzky stayed away from the NHL draft and meetings last month in Montreal. He has been conspicuously absent in the discussion of the Coyotes off season player moves. His compensation (rightly so) was ripped in a study of Coyote team expenses. Rumors have been circulating that he won’t be welcome in the Reinsdorf-Kaites-Tavares organization. And Glendale has called into question his standing as a creditor in the Coyotes bankruptcy.
You can read more about Glendale and Gretzky here:
http://www.theglobeandmail.com/sports/hockey/glendale-takes-aim-at-great-one/article1204887/
It’s a sad turn of events. At first he was clearly out of his element behind the bench. In the last two years, he’s grown in the job and seemed to enjoy it more than in prior years. His teams played hard even if they were not particularly well schooled. Now the vibe seems to be that he really wants to keep the job, is willing to take a substantial pay cut to keep it but may not get the chance.
New ownership is keeping their mouths shut until the bankruptcy purchase is completed but you get the sense that a late summer coaching change is imminent. While there is hockey and business justification for a coaching change, there is still an emotional tug that says he’s the greatest player who ever played the game and someone who has always honored the game. He deserves better.
Wayne Gretzky won’t get fired. If the decision is made to end his association with the Coyotes, he will resign gracefully. Because that is his style. And while he has not been the great one as a coach, he has handled a difficult situation with grace and composure. Wayne Gretzky has never demanded the spotlight – it always found him. Now he lurks in the background as a creditor, a financial albatross and a supporting actor in a play that has gone horribly wrong. It is so uncomfortable.
I’m reminded of a comment that was made about Wayne when he played and lived in LA. “He’s a great, hockey player” a business associate once told me, “but he’s an even better human being”. Good people deserve better.
If Wayne’s World is indeed closing, we’ll be watching a chapter of his remarkable career without a happy ending. And we all will be watching an opportunity slip away that started with so much promise but now is eclipsed by an economic struggle for survival.
Somehow, we’ll all be a little poorer for the experience.
Sunday, June 28, 2009
The Draft, 3 Trades and Where Next?
Draft weekend is a fun time in the NHL. It’s the official start of off-season player movement and one of the key events in building a team for the coming season.
When it comes to the amateur draft, I always take the position of trusting the scouts. Keith Gretzky and his team has done a good job identifying players to draft in the last few years. The Coyotes have lots of good talent already in the NHL, more players on the way and a few unsigned draft choices who could end up being impact players. I get a kick out of the message board experts who really want this player or think that guy can turn around a franchise after watching a few YouTube highlights and reading what so-called draft experts say.
I always appreciate how TSN hockey analyst Bob McKenzie positions himself. McKenzie, who seems to have an direct pipeline to many teams, predicts the draft based on what he hears and what he is told, not what he thinks of the players. A few years ago he predicted the Coyotes were going to go “off the grid” with the 5th pick and they proceeded to pick the much lower rated Blake Wheeler. Think he has sources?
That said, the selection of Ekman-Larsson over Cowen was a bit of a surprise to me. Cowen is a physical, shutdown defensive type unlike anyone the Coyotes have in their organization. Ekman-Larsson shot up draft boards in the last few months and those type of players always scare me a little. Nevertheless, I’ll trust the scouts here and hope they have pegged a very good young player.
General Manager Don Maloney took an innovative route to improving the team by trading a couple of late round draft choices for players who finished last season in the American Hockey League. I did suspect that Maloney would consider trading draft picks for restricted free agents, but frankly I expected the action to be at the top of the Coyotes draft board and not at the bottom.
The Coyotes traded their 5th round pick to the Washington Capitals for the rights to RFA defenseman Sami Lepisto. The Finnish defenseman was stuck behind a number of young defensemen in the Caps system. Lepisto was a 3rd round draft choice in 2004 and has scored 45 and 42 points in his two full AHL seasons. Lepisto has also played 14 NHL games with the Caps. He missed Hershey’s AHL championship run after injuring his spleen in the last week of the regular season.
Maloney then shipped the Yotes’ 7th round pick to the Vancouver Canucks for defenseman Shaun Heshka. A junior teammate of Peter Mueller, Heshka has spent the last three years with the AHL Manitoba Moose, scoring 14 goals and 62 total points in 211 games. The Moose lost to the Bears in the AHL championship series this year.
Both Lepisto and Heshka have completed his entry level contracts. They will need to be qualified by 5 PM Monday or else they will become an unrestricted free agents. Much like Enver Lisin, Maloney is likely to want a fair two-way contract in place for both players. They may or may not agree leaving the possibility that they will have to be qualified (with a one way contract) or become free agents. One can assume the latter option is unlikely either by prior agreement or qualification.
While trading for restricted free agents is a solid strategy, Maloney is clearly shopping in the bargain aisle. He decided not get in on the action for high profile RFAs like Phil Kessel. One assumes the Coyotes have scouted these players extensively and had enough confidence to swap low draft choices for a shot at these players.
More curious was the trade of Brandon Prust to the Calgary Flames for veteran defenseman Jim Vandermeer.
Prust projected as little more than a 4th line energy player for the Yotes but he was cheap -- $500K. Vandermeer has a bigger price tag. Much bigger. He has two years left on his contract at an annual hit of $2.3MM.
The trade is curious in two ways. Vandemeer is a defensive minded player who lacks mobility. He is a 5th or 6th defenseman on a good team. He is not the offensive minded defenseman that the Coyotes desperately need. And at $2.3MM he takes a big bite out of the $5-6MM that we know Maloney has to spend to get to the salary cap floor. Maloney wants to add veteran leadership and Vandermeer will help in that area but he is at best a modest talent.
One wonders if this trade might have been a second act to the Jokinen trade. It just seems to be very out of character for GMDM.
What is missing right now is the element of excitement to the Coyotes off-season. So far, the biggest fireworks have come in the courtroom. . Taken alone, each of these moves can be explained as reasonable hockey judgement. Collectively, they will not excite the fan base. This franchise badly needs some juice. The Coyotes need to sell tickets, They need to win now. As flawed as the Olli Jokinen trade turned out last year, it did give the franchise a shot of energy. Unfortunately that energy didn’t pay off in a productive season or a playoff berth.
There will be more changes in the next few days and hopefully there will be some exciting hockey news for Coyote fans. As we approach the Monday 5PM deadline for qualifying restricted free agents, more players may become available. And on Wednesday over 100 unrestricted free agents hit the market. The Coyotes will not be players for the available big names but I expect GMDM to be shopping the bargain aisle for useful players. The frenzy of free agent activity will also put shake some players loose in trades and that’s where I expect the Coyotes to have their best chance and giving the franchise a real energy boost.
And a shot of excitement, along with investment by the new owners and lots of hard work are all parts of pumping new life into the franchise. I’m getting sick of the Coyotes being the butt of hockey jokes. (Did you hear Montreal fans chanting “Hamilton” when the Coyotes drafted?) It’s time for this franchise to show up, make a few bold moves and show the community that getting to the playoffs is not only a good talking point, but a real possibility. Bold moves can come in business at any time but if you are building a hockey roster, this is the week to be bold.
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