How Much Longer For The Coyotes in Phoenix?

Will Jim Balsillie still be able to afford the Coyotes once the legal mess is sorted out? According to this March article from The Globe & Mail "Globe Investor: Report On Business", his net worth apparently plunged (from the $3B previously reported), by almost half in the last year:

Being a billionaire is a lot lonelier this year

GORDON PITTS, The Globe and Mail, Wednesday, March 11, 2009

It's bad enough that the energy collapse has stripped Alberta of jobs, housing riches, and oil sands projects. Now comes the ultimate indignity: The province is losing billionaires.

Forbes magazine's annual list of the world's most affluent people shows two oilmen heavily associated with Alberta's spectacular wealth gains of the previous decade have tumbled out of the billionaire class.

Absent from the 2009 rankings are Calgary financier Murray Edwards, who last year ranked No. 843 in the world with an estimated net worth of $1.4-billion (U.S.); and energy veteran Clay Riddell, last year's No. 897 with $1.3-billion in wealth.

Alberta's loss of stature is typical of a harsh global economy that has been brutal in reshuffling the uber-rich ranks.

Forbes says the number of world billionaires fell to 793 from 1,125 the previous year, marking the first time since 2003 that the billionaire ranks have shrunk from one year to the next.

Those clinging to billionaire status are worth $2.4-trillion in total, down 45 per cent from $4.4-trillion in 2008. The average billionaire is valued at $3-billion, having seen $900-million sliced off his or her 2008 riches.

Canada's wealthiest person, David Thomson, lost almost $6-billion in net worth. That leaves Mr. Thomson and his family, whose media and information interests include part ownership of The Globe and Mail, with a net worth of $13-billion. Still, that reduced sum puts him at No. 24 globally – up from No. 31.

Typical of this crazy year, the only Canadian billionaire who augmented his net worth runs a circus. Guy Laliberté, owner of Cirque du Soleil, soared to the 261st spot globally – from No. 707 in 2008 – on the strength of a fortune of $2.5-billion, up from $1.7-billion.

That puts Mr. Laliberté in fifth place among Canadians, ahead of such perennial entries as Jimmy Pattison, now worth an estimated $2.1-billion, down more than 60 per cent from last year's $5.5-billion. Mr. Laliberté also beats Research In Motion Inc.'s duo of Mike Lazaridis ($1.8-billion, down 50 per cent) and Jim Balsillie ($1.7-billion).

Inside the stark numbers are changes in bragging rights. Bill Gates is back on top, having supplanted his friend Warren Buffett as the world's richest man, with a net worth of $40-billion. And that's after losing $18-billion over the past year.

Mr. Buffett, who took on the role of global economic saviour last fall, has paid for his apparent rashness. He lost $25-billion in wealth, sinking to a paltry $37-billion.

It was also a hard year for Carlos Slim Helu, the Mexican telecom magnate who lost $25-billion but still comes in at No. 3 at $35-billion.

The Canadian oil elite is not totally absent from the billionaires' club. The three Irving brothers of New Brunswick clock in with a total net worth of $3.9-billion, down from $6.7-billion – but enough to salvage the 146th spot.

The one surviving Alberta billionaire, Daryl Katz, is not an oilman but a pharmacy titan. Mr. Katz did not have a great year, losing $600-million in wealth, but he hangs on to 468th position globally with a nest egg of $1.5-billion.

In terms of nations, Russia is a big loser, having lost nearly two-thirds of its billionaires, reducing the ranks to 32. Despite its own catastrophic economy, the U.S. has recaptured dominance of the top 20.

And information tycoon Michael Bloomberg is a big winner – the only member of the global top 20 to enhance his net worth, despite a $1-a-year salary as mayor of New York. His new $16-billion net worth, up $4.5-billion, results from a re-evaluation of Bloomberg LP.

Among the poignant absences is that of Canadian communications czar Ted Rogers, who last year was the 173rd richest billionaire. Mr. Rogers died in December, and none of his heirs made this year's list.

http://www.globeinvestor.com/servlet/story/RTGAM.20090311.wrbillionaires0312/GIStory/

How can someone who's not an owner, apply for relocation? . Seriously. Doesn't he have to own the team first?

http://www.tsn.ca/nhl/story/?id=280535

Cap'n Clutch wrote:How can someone who's not an owner, apply for relocation? . Seriously. Doesn't he have to own the team first?

http://www.tsn.ca/nhl/story/?id=280535

I think it's all tied together with his application for ownership, which was done last week.

Strange way to go about it, but maybe it's "the rules" in the NHL.

wprager wrote:




Bettman says Coyotes can be turned around

http://slam.canoe.ca/Slam/Hockey/News/2009/05/30/9626441-cp.html

He compares the situation in Phoenix with Pittsburgh 10 years ago. He neglects to mention that Pittsburgh was filing for bankruptcy in a no-cap league. Phoenix has no such excuse.

"We didn't walk out on
Pittsburgh, we fought to fix their problems. We're fighting for Phoenix
because of our covenant with the team and the fans there."

"Covenant"? Who does he think he is, Abraham??!

There are some interesting other tid-bits in there, too:

Bettman said the league will
eventually look at the possibility of a second team in Toronto: "It's
not something that we've studied. If we're going to either relocate a
franchise ... or we decide to expand, if there's suitable ownership and
a suitable arena situation it's something we're going to have to take a
look at."

The decision to start the Stanley
Cup with games on consecutive nights was made a year ago. "We wanted to
try something different, we wanted to try and build an intense start to
the series," said Bettman.

He isn't concerned that the KHL's
decision to hold a draft including 17-year-olds will affect the number
of players coming to the North America: "This is where the best players
want to be."

I didn't even know about that. Wow, 17 year olds being drafted on a regular basis.

Bettman is just saying what he perceives to be the clichéd "all the right things".

He is just as aware of the futility of trying to make a go of it in Glendale as anyone. He knows full well that this team will be moved upon being sold and he will gladly facilitate that move as long as it's not to Canada.

shabbs wrote:

Cap'n Clutch wrote:How can someone who's not an owner, apply for relocation? . Seriously. Doesn't he have to own the team first?

http://www.tsn.ca/nhl/story/?id=280535

I think it's all tied together with his application for ownership, which was done last week.

Strange way to go about it, but maybe it's "the rules" in the NHL.

Heard some more of this on the radio when I was out and about. It's a joint application between Moyes and Balsillie and seems to be setting the table for an anti-trust case against the NHL should they fail in the bankruptcy hearings.

Translation: it's gonna get nasty.

shabbs wrote:

shabbs wrote:

Cap'n Clutch wrote:How can someone who's not an owner, apply for relocation? . Seriously. Doesn't he have to own the team first?

http://www.tsn.ca/nhl/story/?id=280535

I think it's all tied together with his application for ownership, which was done last week.

Strange way to go about it, but maybe it's "the rules" in the NHL.

Heard some more of this on the radio when I was out and about. It's a joint application between Moyes and Balsillie and seems to be setting the table for an anti-trust case against the NHL should they fail in the bankruptcy hearings.

Translation: it's gonna get nasty.

so we are to expect some big time mud slinging in the courtroom over this one eh? This is not going to be good at all for the league, can only serve to tarnish the reputation of the NHL.

I think we can expect some serious stupidity and madness to come if it goes to an anti-trust case. And, in the end, no one will really win.

Just give it up, and move Atlanta to Quebec.

Atlanta's failed as a hockey market twice now, just cut your losses and move these crumbling franchises.

Phoenix, Atlanta, Nashville, Florida, move the lot. Mass exodus.

The Guy With The Mustache wrote:Just give it up, and move Atlanta to Quebec.

Atlanta's failed as a hockey market twice now, just cut your losses and move these crumbling franchises.

Phoenix, Atlanta, Nashville, Florida, move the lot. Mass exodus.

Agreed....Atlanta can become the Nordiques again, Phoenix already seems to be lined up for Hamilton, so then Nashville goes to Winnipeg to give them back their team. Florida, well, we can either move them to Saskatchewan, if that doesn't fly, how about another team in BC?

Jim makes some in-game adjustments, and the Coyotes respond. From the Associated Press today:

Balsillie still open to other bidders

NEW YORK (ESPN/AP)-- Jim Balsillie wants to buy and move the Phoenix Coyotes but he's still open to the idea of an auction for the club.

"From the day we announced the bid, we had motions before the bankruptcy court requesting in early June Judge [Redfield T.] Baum conduct an auction for the team and let all bidders come forward, whether they intended to keep the Coyotes in Phoenix or whether they intended to relocate them," Balsillie's spokesman Bill Walker said Tuesday in a conference call with reporters.

"Mr. Balsillie's committed to a fair, transparent process ... should Judge Baum allow the auction to proceed," Walker said. "We're happy to see other bidders come forward."

Basillie has filed an application to relocate the NHL team to Hamilton, Ontario.

Former CFL commissioner Tom Wright devised the bid for the Coyotes and said Tuesday the NHL would be better served by allowing the team to be moved.

"I believe that replacing a chronically underperforming club ... with a vibrant, fan-supported financially vital member club that is most likely to become a top-15 producer and a positive financial contributor to the league is in the best interests of everyone involved," he said.

Walker stressed that the bid to buy the Coyotes was not intended to realign the NHL, but rather to improve the viability of the franchise.

"There are great hockey markets in the United States, and whether it's 24 out of 30 teams that are U.S.-based or 23 out of 30 teams, our only issue here is what's the best outcome for the Coyotes franchise," he said.

Walker also said that although Balsillie still believes the franchise can begin play in southern Ontario this fall, he was willing to leave the team in Arizona for one more season if his purchase is approved.

"The NHL has raised some issues with scheduling that could be problematic, and we wanted to remove that impediment to Mr. Balsillie's offer to purchase being successful," he said.

Balsillie's relocation application is one of several documents that will be submitted this week.

Lawyers for the NHL and Coyotes majority owner Jerry Moyes have been given a Friday deadline by bankruptcy judge Baum to present written arguments whether the team can be moved as part of a sale in his court.

Baum will preside over a hearing next week where the parties will state their respective cases and has said he intends to make a prompt ruling on the relocation issue. His decision will dictate whether Balsillie can become an NHL owner after years of trying.

Coyotes general manager Don Maloney said after a meeting Tuesday in Pittsburgh that he's not worried about the team's uncertain future.

"That's not a concern of mine at all," Maloney said. "We certainly expect to be in business next year."

The Bettman challenges The Balsillie...from Canwest News Services:

Balsillie's offer for Coyotes less than $212.5 million: Bettman

Canwest News/Tuesday, June 02, 2009


NHL commissioner Gary Bettman has challenged some of the details of Jim Balsillie's bid to buy the bankrupt Phoenix Coyotes.

In a television interview Tuesday, Bettman claimed the offer by the co-chief executive officer of Research in Motion to buy the club and move it to Hamilton is not worth the reported $212.5 million US.

"First of all it's not really ($212 million US). . . . It's a much lesser number by the time you do all the set offs and credits," Bettman said during an interview during CBC's Hockey Night in Canada, adding the league is committed to the market because "this is a team that's in Phoenix, in a new arena and there are people that would like to own a team there."

The NHL and current Coyotes owner Jerry Moyes are embroiled in a legal battle over the future of the club. Moyes wants to sell the team to the highest bidder - even if that means relocating the franchise - while the NHL counters that it has control over where its teams are located.

"Take it out of sports. If you own a Tim Hortons or a McDonald's, you name it, and you buy it one particular location, you don't own the right to move it to a different location," Bettman explained in the interview during the second intermission of Game 3 of the Stanley Cup final. "Our argument to the court is, 'Your honour, the bankrupt party - the Phoenix Coyotes owner - is trying to sell something he doesn't own.' "

The commissioner also took issue with claims that Moyes has lost $300 million since he bought into the team in 2001. Bettman said some of those dollars were part of Moyes' acquisition cost, which can't be considered losses.

"There's been too much hysteria about all the underlying factors," he said.

The league claims it took over control of the Coyotes in November when it lent money to the team. However when reports surfaced in April the NHL had taken charge the league and the team at first denied it.

"At the end of the day what we were trying to do was keep things stable and calm, and frankly they should have been," Bettman said, explaining the NHL's change of heart. The league is now contending in a U.S. Bankruptcy Court that it is in charge of the team and Moyes does not have the authority to file for bankruptcy.

"This club does not belong in bankruptcy," Bettman added. "The club was never in jeopardy and any suggestion that is was is silly."

That was a pretty funny interview with The Commish last night. Gives you an idea of how each side perceives the facts and what's really going on. He's got the gift of the gab, that's for sure.

shabbs wrote:That was a pretty funny interview with The Commish last night. Gives you an idea of how each side perceives the facts and what's really going on. He's got the gift of the gab, that's for sure.

He's rarely at a loss for words, but there was one incident. It's described in Cherry's ook but I'll paraphrase as well as I can.

McLean wore a tux with a top hat during one telecast (don't remember the details). He asked Cherry beforehand how it looked and Cherry said it was fine (he did not state his true feelings). Anyhow, McLean got a bit of flack because of it.

A while later, McLean was doing one of his patented Bettman interviews, where he continually digs and digs into him, trying to get him to admit something. Bettman must have had nothing more he could say because, out of the blue, he just says "Well, some guys can't wear a hat."

shabbs wrote:That was a pretty funny interview with The Commish last night. Gives you an idea of how each side perceives the facts and what's really going on. He's got the gift of the gab, that's for sure.

I think Bettman did a good job explaining why he wants the Coyotes to remain in Phoenix. I was sympathetic to his point of view in that regard. I just don't believe that when push comes to shove, and it will, that the Coyotes will remain in Phoenix. Furthermore, they will be moved to an American city for a low-ball sale price and that just isn't right.

Another view is offered by the former CEO of Copps Coliseum...his opinion piece from the Toronto Sun here:

http://www.gmhockey.com/random-thoughts-f5/the-return-of-the-hamilton-tigers-to-the-nhl-t2407-15.htm#66137

NHLPA director Paul Kelly makes his position clear in this interview from the Hamilton Spectator, posted yesterday...

'Time to pull the plug': NHLPA

Steve Milton, The Hamilton Spectator, June 4, 2009

The leader of the NHL Players' Association may not overtly support a league franchise in Hamilton, but he's very blunt about what should happen to the one in Phoenix.

"From a players' perspective, it's time to pull the plug," NHLPA executive-director Paul Kelly told The Spectator last night.

Kelly says that NHL owners should not only be doubting that the Coyotes should remain in Phoenix, but that those doubts should have arisen long before now.

Earlier in the day, speaking on Toronto radio station The Fan, Kelly wondered: "How much money must (a franchise) lose before someone says "perhaps they ought not to be there?"

However, Kelly would not go so far as to back Jim Balsillie's bid to transfer the Coyotes to Hamilton: even though he's known to look favourably Balsillie's membership as an NHL owner.

"We don't formally endorse or support the current effort to move the team to Hamilton, Ontario," Kelly told The Fan. "That's not to say we're against it either, but we are neutral."

It is no secret that the NHLPA wants more input into where franchises are relocated, or where any future expansion teams will be placed.

Because the union became "an economic partner" with the NHL "in a joint venture" when it was forced after the bitter lockout of 2004-05 to accept a salary cap based on a percentage (54 to 57 per cent) of the NHL's overall hockey-related revenue, Kelly and the PA say it's important to the players that the teams are located in the most profitable areas.

That push actually pre-dates Kelly, who became executive- director in mid-October 2007. Two weeks earlier, NHLPA counsel Ian Penny became the first union executive to openly comment on the issue when he told The Spectator that the union would seek more input on franchise location.

The current collective bargaining agreement, which expires in September 2012, but could end a year earlier if the union triggers an exit clause, gives the players no input into franchise location, but Kelly told The Spec, "that's a topic for down the road when we have the next CBA discussions. We're not going to change that landscape right now."

Still, the players are deeply concerned about the financial bloodbath in Phoenix -- they weren't told of the league's season-long financial help to the team until three months ago -- and the NHL's steadfast, and increasingly mocked, determination to keep a team there.

"I understand the loyalty factor," said Kelly who intimated that the union has been privy to some even worse financial reports about Phoenix than those which have been made public. "But we don't have just a passing interest here. It's a franchise which keeps losing money. You can't keep saying 'we owe it to our fans.' In the examples we have been given (of teams making a financial turnaround) -- 'Look at the Chicago Blackhawks, Look at the Detroit Red Wings'-- you're comparing apples to oranges."

Earlier, he explained to radio host Bob McCown why the players want to have some influence in franchise relocation:

"Let's just talk in hypotheticals. If you've got a franchise which is making $25 million of their own revenue a year, before league-wide revenues, that impacts all players because we get a certain percentage of revenues for salary. If that team was pulled out and substituted by a team which makes $100 (million) to $125 million a year, salaries are going up."

Kelly says there is no doubt a second team in the GTA would be highly profitable and sustainable over a long period.

He hinted that Hamilton might be a problem because of its proximity to Buffalo.

"There is some concern," he conceded. "We want all our franchises to be healthy."

Kelly also said that he'd spoken with TV officials who felt that if broad geographical stretches of the United States, such as the southwest and southeast -- where most of the troubled franchises are located -- were abandoned by the NHL, the league would have trouble landing a lucrative national TV deal in the United States. That has been an implied factor in the NHL's continued push into the Sunbelt since the early 1990s.

Kelly said that it may be acceptable for an owner to absorb large losses, such as the Coyotes, for a year or two, but that when it's occurred over a number of years, and there's a buyer with Balsillie's desire and dollars in the wings, it's time to wave goodbye.

"Yet we continually hear we have to stick by the franchise," he said. "There is some sense of frustration on the part of the players as they read sworn court documents as to how far down it's gone in Phoenix."
smilton@thespec.com

Moving money losing teams to more profitable locations is in the NHLPA's interest as it will increase revenue which will increase the cap and ultimately result in higher salaries for the players.

But as Paul Kelly indicated, they don't want to move a team and end up having a negative impact on another team nearby, which is understandable.

If Chicago Bulls and Chicago White Sox owner Jerry Reinsdorf does buy the Coyotes, can he put his experience making pro sports franchises profitable, and successful, to work in Phoenix? ESPN's Al Cimaglia takes a look at what might happen next.

Reinsdorf a future NHL owner?
Reinsdorf may make Coyotes purchase a profitable venture
Al Cimaglia, ESPNChicago, June 23, 2009

At an Arizona bankruptcy hearing on Monday, Jerry Reinsdorf committed to make a bid to purchases the Coyotes and keep them in the Phoenix area. An attorney for Reinsdorf said his client would apply with the NHL by Friday to become an owner. The new sale deadline is August 5, but there is a September fallback date set by the court if a local sale fails.

Some question why Reinsdorf would want to buy an NHL team buried in red ink and located in the desert. A shrewd businessman might consider the Phoenix Coyotes as buying at a discount.

The NHL wants to have an auction for only those wanting to buy and keep the Coyotes in Phoenix.

If there aren't enough bidders, there would be a second auction for those wanting to purchase and move the franchise. At that time, Jim Balsillie and others would be allowed to bid.

Balsillie wants to buy the team and move the franchise to the southern Ontario area. It seems unlikely he will get his wish, as the NHL still appears to have the upper hand on the Blackberry phone mogul.

Reinsdorf, or another potential buyer, will have to purchase the team with the promise to keep it in Arizona for the foreseeable future. The Coyotes play in Glendale, Arizona in an arena built from municipal funding. If they were to move, there would be a huge buyout due to the city of Glendale. That is one of the many difficulties facing a sale of the Coyotes.

Stringent lease deals are also a problem in other NHL cities. It has been reported the Columbus Blue Jackets start each year in a $10 million hole due to an unfavorable lease situation.

Chicago hockey fans can say what they want about William Wirtz, but the United Center construction was paid in full without public funds. Reinsdorf, along with Wirtz, footed the entire bill.

If Reinsdorf is the winning bidder for the Coyotes, he would most likely do three things right away:

1. No doubt he would renegotiate the stadium lease and arena concessions agreement with the city of Glendale. In its current state, those obligations make turning a profit a very slim possibility. The concession revenue alone has been valued at $15 million-$20 million. Reinsdorf, or whoever is the top bidder, will get a more favorable agreement one way or another.

Glendale needs the Coyotes more than the Coyotes need Glendale. The value of the franchise if moved to Canada would increase exponentially. Currently, the Coyotes are the least valuable team in the NHL, estimated to be worth approximately $140 million. Balsillie has made a $212.5 million conditional bid, dependent upon relocating the franchise.

2. The next task for Reinsdorf -- or another winning bidder -- would be to either fire Wayne Gretzky or renegotiate his contract. The Great One earns in the $6 million-$8 million range to coach the Coyotes. The new owner could get a very good coach for around $1 million. Some would question if Gretzky at this point would even be considered a very good head coach. Regardless, millions could be saved.

If the new Coyote owner could reduce the lease obligation, improve the concession deal and pare down the head coaching salary, the franchise might have a chance of becoming profitable.

3. Reinsdorf might look to hire a John McDonough clone and start a new marketing campaign. After all is said and done, the Coyotes may not make a profit, but they certainly wouldn't lose $12 million per season, which has been the case the last three years. With improved management, the team could start to win sooner rather than later as the Coyotes have many talented young players.

If Reinsdorf can buy the Phoenix franchise in the $140 million range and have the staying power, he could be richly rewarded.

At some point, enough will be enough in the desert. Even with a hefty arena buyout and a steep territorial rights fee due pending relocation to southern Ontario, the Coyotes could still be a good buy if able to move. If Reinsdorf can't get the franchise into the black in Arizona, it would seem at some point he may be able to relocate the team.

It has been mentioned a team in the Hamilton, Ontario area could be valued as high as $450 million. For example, with as much as $200 million paid for an arena buyout and a territorial rights fee, a hefty profit could still be made. It all depends on the purchase price and the ability to control losses.

If the Coyotes never leave the desert but become profitable, they could be considered a very good long-term investment.

Maybe Reinsdorf is a believer the NHL has a big upside. If that is the case, it never hurts to buy low.