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.