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 Gary Bettman. Show all posts
Showing posts with label Gary Bettman. 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.
Thursday, September 17, 2009
Tick, Tick, Tick
The clock is ticking on the Phoenix Coyotes.
23 days until opening night and we still need to learn much about this team.
For starters, who will own the team and where will they play this season?
I am still certain opening night will be in Glendale, the team will play here all season and the NHL will control the franchise either as the (congratulations, it's a mess!) new owner, debtors in possession or interim managers while any award to Jim Balsillie is appealed.
The first two scenarios will give a measure of stability to the team. It will also give fans reason to start investing emotionally in the team. Right now both are absent and both are necessary. The third option? Don't ask.
I can't imagine a bankruptcy court handing over the team to Balsillie knowing that the ensuing legal turmoil will run the asset into the ground. It would also create significant new legal precedent and start years of continuing court cases. Just doesn't seem like Judge Tom's (yawn) style. But as I have been warned by my legal experts, surprises do happen in court. Until the ruling is published, we'll just have to be patient.
And then there is the question of who will coach the team.
Wayne Gretzky is still (officially) the coach of the Coyotes. At least in name. Once Judge Tom wakes up from his nap and makes his ruling, the NHL will control the franchise either by outright purchase through bankruptcy, no sale (debtor in possession) or staying any award of the team to Jim Balsillie. If the NHL wants to make a deal with Gretzky, they need to do so within 24 hours. No more time to ponder. Its now or never.
And if The Great One is not going to coach the team, Ulf Samuelsson immediately needs to be named head coach. He's running the team right now. He's the voice of authority players have been listening to through camp. And frankly, there's little available in the way of alternatives given the time and the tenuous state of the franchise. Let's hope that Ulf doesn't get the dreaded "interim" label. Everything with the Coyotes is day to day right now. There's no need for further reinforcement. Ulf is competent and the best choice under very difficult circumstances.
Who will be on the team?
Mostly the usual suspects. Very few roster spots are up for grabs. We'll have more on this after Friday's game.
And finally will anyone come to the games?
An opening week road trip to Los Angeles, Buffalo and Pittsburgh is not exactly the recipe to get the season off to a fast start. This year, it is fortunate for the Coyotes. A nice trip (3 points?) some exposure (at a minimum, the Penguin game will be on NHL Network)could help take the focus off this summer of turmoil and put it back where it needs to be, on the ice. It is far preferable to a first game at home with no build up in advance of the game.
So how can this mess be fixed?
Fixing will take time. Short and long term decisions need to be made that look at the situation frankly and decisively.
I've lived in Phoenix for almost two years now and followed the Coyotes for the last four. As a hockey fan, I've never been excited by the promotion of the team. As a career marketing executive, I've been appalled by the lack of imagination and clarity in the team's message. Some of the team's marketing messages are just not appropriate for an emerging hockey market. How we got to "Pierre the Fanatical Snowman" and "Be Coyotes Cool" (running concurrently) is beyond me.
No single marketing campaign or program is going to fix the Coyotes. Good marketing can create awareness and interest. Winning teams create desire and action.
But let's be frank here -- there is not a lot of interest after what has happened this summer. There's a lot of work to do.
Here are a couple of random ideas. In coming days I'll have a few more suggestions.
There's an exhibition game on Saturday September 26th vs. San Jose. Unless Judge Tom has passed away and I missed it, his decision will have come down by then. And as such, we'll begin to have some clarity for the teams and fans. I'd suggest that whoever is in charge throw the doors open for $5 a head to get some people in the building, expose the players to the fans and generate some energy. Pre-season games aren't going to draw big crowds under the best of circumstances. This isn't the best of circumstances. Sacrifice the gate (ahem) and get some people in the building.
Something similar, albeit not as dramatic might be in order for opening night. Buy everyone a hot dog and a beer to thank them for bearing with what went on this summer.
The Coyotes need to build a message that speaks directly to what has happened this summer. "We Play For You", the contemplated 2009-10 advertising theme is cliched and uninspiring. A slogan like this might work in an established market but it does not communicate what needs to be said here.
Hockey fans in Arizona, casual or hard core, need a pointed message that builds on what happened this summer. The Coyotes got more publicity than ever this summer, although most of it was not positive. Nevertheless, publicity of any kind can be good. I'm not the first person to say that, P.T. Barnum was.
When the NHL sent a lettered to the fans this summer, it was pointed. We know the NHL can succeed in Arizona, but we need your support now. There are ways to tie the urgency of the situation into the promotion of the hockey team without belaboring the points. If done in a clever and imaginative way, it can set up the market for success. Of course, a winning team is a necessary ingredient in this equation but you got to start somewhere. The key is developing a message and a theme that incorporates the issues with the team but builds on them rather than belaboring them.
And finally, the Coyotes need to ask for help. The advertising business sucks right now. Radio and TV stations have more time than ever available to do cross promotions. In fact, this is pretty close to a once in a lifetime opportunity in the Phoenix market. Why not ask each media outlet in town to take one night, make it their own and build a promotion to create publicity and enthusiasm? The Coyotes have plenty of inventory they can offer for now. So do TV and radio stations. There's a deal to be made here. Misery does love comnpany, you know.
More on the team, promotion and Gretzky coming this weekend.
Tomorrow, I'll get my first look at the 2009-10 Yotes. Stop by and say Hi. I'll be the guy wearing the New York Don Maloney jersey. I'm afraid I'll be easy to find.
23 days until opening night and we still need to learn much about this team.
For starters, who will own the team and where will they play this season?
I am still certain opening night will be in Glendale, the team will play here all season and the NHL will control the franchise either as the (congratulations, it's a mess!) new owner, debtors in possession or interim managers while any award to Jim Balsillie is appealed.
The first two scenarios will give a measure of stability to the team. It will also give fans reason to start investing emotionally in the team. Right now both are absent and both are necessary. The third option? Don't ask.
I can't imagine a bankruptcy court handing over the team to Balsillie knowing that the ensuing legal turmoil will run the asset into the ground. It would also create significant new legal precedent and start years of continuing court cases. Just doesn't seem like Judge Tom's (yawn) style. But as I have been warned by my legal experts, surprises do happen in court. Until the ruling is published, we'll just have to be patient.
And then there is the question of who will coach the team.
Wayne Gretzky is still (officially) the coach of the Coyotes. At least in name. Once Judge Tom wakes up from his nap and makes his ruling, the NHL will control the franchise either by outright purchase through bankruptcy, no sale (debtor in possession) or staying any award of the team to Jim Balsillie. If the NHL wants to make a deal with Gretzky, they need to do so within 24 hours. No more time to ponder. Its now or never.
And if The Great One is not going to coach the team, Ulf Samuelsson immediately needs to be named head coach. He's running the team right now. He's the voice of authority players have been listening to through camp. And frankly, there's little available in the way of alternatives given the time and the tenuous state of the franchise. Let's hope that Ulf doesn't get the dreaded "interim" label. Everything with the Coyotes is day to day right now. There's no need for further reinforcement. Ulf is competent and the best choice under very difficult circumstances.
Who will be on the team?
Mostly the usual suspects. Very few roster spots are up for grabs. We'll have more on this after Friday's game.
And finally will anyone come to the games?
An opening week road trip to Los Angeles, Buffalo and Pittsburgh is not exactly the recipe to get the season off to a fast start. This year, it is fortunate for the Coyotes. A nice trip (3 points?) some exposure (at a minimum, the Penguin game will be on NHL Network)could help take the focus off this summer of turmoil and put it back where it needs to be, on the ice. It is far preferable to a first game at home with no build up in advance of the game.
So how can this mess be fixed?
Fixing will take time. Short and long term decisions need to be made that look at the situation frankly and decisively.
I've lived in Phoenix for almost two years now and followed the Coyotes for the last four. As a hockey fan, I've never been excited by the promotion of the team. As a career marketing executive, I've been appalled by the lack of imagination and clarity in the team's message. Some of the team's marketing messages are just not appropriate for an emerging hockey market. How we got to "Pierre the Fanatical Snowman" and "Be Coyotes Cool" (running concurrently) is beyond me.
No single marketing campaign or program is going to fix the Coyotes. Good marketing can create awareness and interest. Winning teams create desire and action.
But let's be frank here -- there is not a lot of interest after what has happened this summer. There's a lot of work to do.
Here are a couple of random ideas. In coming days I'll have a few more suggestions.
There's an exhibition game on Saturday September 26th vs. San Jose. Unless Judge Tom has passed away and I missed it, his decision will have come down by then. And as such, we'll begin to have some clarity for the teams and fans. I'd suggest that whoever is in charge throw the doors open for $5 a head to get some people in the building, expose the players to the fans and generate some energy. Pre-season games aren't going to draw big crowds under the best of circumstances. This isn't the best of circumstances. Sacrifice the gate (ahem) and get some people in the building.
Something similar, albeit not as dramatic might be in order for opening night. Buy everyone a hot dog and a beer to thank them for bearing with what went on this summer.
The Coyotes need to build a message that speaks directly to what has happened this summer. "We Play For You", the contemplated 2009-10 advertising theme is cliched and uninspiring. A slogan like this might work in an established market but it does not communicate what needs to be said here.
Hockey fans in Arizona, casual or hard core, need a pointed message that builds on what happened this summer. The Coyotes got more publicity than ever this summer, although most of it was not positive. Nevertheless, publicity of any kind can be good. I'm not the first person to say that, P.T. Barnum was.
When the NHL sent a lettered to the fans this summer, it was pointed. We know the NHL can succeed in Arizona, but we need your support now. There are ways to tie the urgency of the situation into the promotion of the hockey team without belaboring the points. If done in a clever and imaginative way, it can set up the market for success. Of course, a winning team is a necessary ingredient in this equation but you got to start somewhere. The key is developing a message and a theme that incorporates the issues with the team but builds on them rather than belaboring them.
And finally, the Coyotes need to ask for help. The advertising business sucks right now. Radio and TV stations have more time than ever available to do cross promotions. In fact, this is pretty close to a once in a lifetime opportunity in the Phoenix market. Why not ask each media outlet in town to take one night, make it their own and build a promotion to create publicity and enthusiasm? The Coyotes have plenty of inventory they can offer for now. So do TV and radio stations. There's a deal to be made here. Misery does love comnpany, you know.
More on the team, promotion and Gretzky coming this weekend.
Tomorrow, I'll get my first look at the 2009-10 Yotes. Stop by and say Hi. I'll be the guy wearing the New York Don Maloney jersey. I'm afraid I'll be easy to find.
Thursday, September 10, 2009
No Sale???
I couldn't add much to everything that has been written about the hearings and eventual auction that is going on today in Federal Court. I am sure that many of you are following the tweets from brahmresnick, TheYotesDiva, HKYFN, cbctom, kmcgran and others.
The biggest news this morning came from Judge Tom, who raised the possibility that he may not accept any of the bids. I spoke to my bankruptcy expert and he told me that he is not exactly sure what the Judge is trying to accomplish. He suggested that Baum likely wouldn't kick the case out of bankruptcy completely or force a Chapter 7 dissolution of the franchise. Perhaps this is consistent with Baum's strategy of forcing more negotiation and a possible compromise. Of course, Judge Tom hasn't gotten to know Gary Bettman very well.
I'll speculate that if the Judge does not accept any of the bids, it effectively takes Balsillie out of the game. The NHL will then begin legal manuevering to reposess the franchise, operate it as debtor in possession and find a new owner.
Or so we hope.
The biggest news this morning came from Judge Tom, who raised the possibility that he may not accept any of the bids. I spoke to my bankruptcy expert and he told me that he is not exactly sure what the Judge is trying to accomplish. He suggested that Baum likely wouldn't kick the case out of bankruptcy completely or force a Chapter 7 dissolution of the franchise. Perhaps this is consistent with Baum's strategy of forcing more negotiation and a possible compromise. Of course, Judge Tom hasn't gotten to know Gary Bettman very well.
I'll speculate that if the Judge does not accept any of the bids, it effectively takes Balsillie out of the game. The NHL will then begin legal manuevering to reposess the franchise, operate it as debtor in possession and find a new owner.
Or so we hope.
Tuesday, September 1, 2009
Some Random Notes Before A Short Vacation
Time for me to disappear for a few days. Need to recharge the batteries before training camp starts. So here's some of the things I am going to miss this week...
The cage match in Judge Tom's court tomorrow
Lots of juicy items to be decided but the big one is whether Jim Balsillie will be allowed to bid in the bankruptcy auction on September 10th. The NHL says "no", he's already been rejected as a potential owner. Jerry Moyes will counter that Balsillie's bid is his best (and only) chance to recover any money on this deal.
Prediction? I think the court will not disqualify Balsillie at this time. Money talks in bankruptcy court. Balsillie has money. I think the Judge is perfectly willing to let other courts sort out this mess. I believe he will follow the money trail and keep the auction open to Balsillie.
And then what? I expect the NHL will immediately appeal his decision to the 9th District Court of Appeals and seek injunctive relief to stop the September 10th auction. This is a strike issue for the NHL. They will not stand by idly and tolerate any process that could deliver the team to Balsillie. This will almost certainly push the auction back past Balsillie's September 14th deadline to complete the purchase. He won't be going away but it will then take the court battle in a new, different and very expensive direction.
And if I'm wrong? And Balsillie gets thrown out on his ear? Then it will be Moyes suing the NHL. Unfortunately he has far less legal grounds than the league does to pull off an appeal and without Balsillie's checkbook and bank of lawyers it may be time for him to fold his hand.
Don Maloney's (rescheduled) press availability
Maloney is almost always available, by e-mail, phone or other means to answer questions. He's been quiet lately and with the pot boiling on so many fronts, it makes sense for him to be keeping a low media profile.
Suspicion? The league told him it would be better to keep his mouth shut rather than deal with tough questions. Like how is this mess affecting the team and who exactly is going to be the coach when training camp opens.
Which leads to another question...
Who is going to coach the Coyotes this year
Rookie camp opens on Saturday. Veterans are due in next Thursday. Sooner or later someone has got to take the reins of the Coyotes.
Prediction? Wayne Gretzky.
Really? Yes. Gretzky has been in an awful position this summer. His contract has been outed and there's no way he will be working for the $8.5MM this year.
But...The NHL doesn't kick icons to the curb. Ice Edge is still a player in the auction process and they want Wayne's World to stay open. I don't see any way Balsillie could ever get control of the team before this season so I anticipate the Coyotes will stay and Wayne will work on a one year contract at a greatly reduced rate. No matter what you think of Wayne as a coach, he's got a lot of sweat invested in this team and he desperately wants to finish the rebuilding job here. This may not be the most popular move with the hard core fan base but it's likely to be perceived positively by the casual hockey fan.
And if I'm wrong? No highly credentialed coach is going to take over this team without some job security. Forget Dave Tippett or Peter Laviolette coming here. If it isn't Wayne, I expect that Ulf Samuelsson (or perhaps someone else within the organization) will be promoted and Sean Burke will slide in as an assistant to help behind the bench.
Have a good week. We'll check in when we can and we'll be actively staying in touch to see how things start to shake out.
The cage match in Judge Tom's court tomorrow
Lots of juicy items to be decided but the big one is whether Jim Balsillie will be allowed to bid in the bankruptcy auction on September 10th. The NHL says "no", he's already been rejected as a potential owner. Jerry Moyes will counter that Balsillie's bid is his best (and only) chance to recover any money on this deal.
Prediction? I think the court will not disqualify Balsillie at this time. Money talks in bankruptcy court. Balsillie has money. I think the Judge is perfectly willing to let other courts sort out this mess. I believe he will follow the money trail and keep the auction open to Balsillie.
And then what? I expect the NHL will immediately appeal his decision to the 9th District Court of Appeals and seek injunctive relief to stop the September 10th auction. This is a strike issue for the NHL. They will not stand by idly and tolerate any process that could deliver the team to Balsillie. This will almost certainly push the auction back past Balsillie's September 14th deadline to complete the purchase. He won't be going away but it will then take the court battle in a new, different and very expensive direction.
And if I'm wrong? And Balsillie gets thrown out on his ear? Then it will be Moyes suing the NHL. Unfortunately he has far less legal grounds than the league does to pull off an appeal and without Balsillie's checkbook and bank of lawyers it may be time for him to fold his hand.
Don Maloney's (rescheduled) press availability
Maloney is almost always available, by e-mail, phone or other means to answer questions. He's been quiet lately and with the pot boiling on so many fronts, it makes sense for him to be keeping a low media profile.
Suspicion? The league told him it would be better to keep his mouth shut rather than deal with tough questions. Like how is this mess affecting the team and who exactly is going to be the coach when training camp opens.
Which leads to another question...
Who is going to coach the Coyotes this year
Rookie camp opens on Saturday. Veterans are due in next Thursday. Sooner or later someone has got to take the reins of the Coyotes.
Prediction? Wayne Gretzky.
Really? Yes. Gretzky has been in an awful position this summer. His contract has been outed and there's no way he will be working for the $8.5MM this year.
But...The NHL doesn't kick icons to the curb. Ice Edge is still a player in the auction process and they want Wayne's World to stay open. I don't see any way Balsillie could ever get control of the team before this season so I anticipate the Coyotes will stay and Wayne will work on a one year contract at a greatly reduced rate. No matter what you think of Wayne as a coach, he's got a lot of sweat invested in this team and he desperately wants to finish the rebuilding job here. This may not be the most popular move with the hard core fan base but it's likely to be perceived positively by the casual hockey fan.
And if I'm wrong? No highly credentialed coach is going to take over this team without some job security. Forget Dave Tippett or Peter Laviolette coming here. If it isn't Wayne, I expect that Ulf Samuelsson (or perhaps someone else within the organization) will be promoted and Sean Burke will slide in as an assistant to help behind the bench.
Have a good week. We'll check in when we can and we'll be actively staying in touch to see how things start to shake out.
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.
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.
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.
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