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How Much Longer For The Coyotes in Phoenix?

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Phoenix30
Cronie
PTFlea
SensFan71
SeawaySensFan
shabbs
davetherave
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What next for the Coyotes?

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davetherave


All-Star
All-Star

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

shabbs


Hall of Famer
Hall of Famer

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.

davetherave


All-Star
All-Star

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.

davetherave

davetherave
All-Star
All-Star

Players believe team will stay in Arizona
SportsIllustrated/CNN.com, June 26, 2009

GLENDALE, Ariz. (AP) -- The future of the Phoenix Coyotes remains in limbo, but several players believe the bankrupt NHL team will stay in Arizona.

"We're planning to be here for a long time. We want to make this work," forward Peter Mueller said at Thursday night's open house that attracted an estimated 3,000 people to Jobing.com Arena. "The fans are clearly behind us and we want to give back the 100 percent they show to us."

"We're happy to be here ... and it's a great place to play," defenseman Keith Yandle said. "From a player's standpoint, you just want to play and let the other things take care of themselves. The fans here give us great support and we expect to play here for some time."

A federal bankruptcy court judge in Phoenix has set Friday as a deadline for potential buyers who would keep the Coyotes in Arizona to submit purchase applications to the NHL.

Jerry Reinsdorf, owner of NBA's Chicago Bulls and major league baseball's Chicago White Sox, has promised to make an offer.

The NHL claims four parties, including Reinsdorf, have filed preliminary applications to investigate purchasing the Coyotes and keeping the team in Arizona.

But if a suitable buyer isn't found by the Aug. 5 sale date, U.S. Bankruptcy Judge Redfield T. Baum has set a second auction for Sept. 10 that would be open to bidders who want to relocate the team.

That would allow Canadian billionaire Jim Balsillie to renew his $212.5 million bid to buy the franchise and move it to Hamilton, Ontario.

Coyotes owner Jerry Moyes surprised the NHL by filing for Chapter 11 bankruptcy protection on May 5 with a plan to sell the team to Balsillie, contingent on moving the franchise to Hamilton.

The Coyotes have lost more than $300 million since the franchise moved in 1996 from Winnipeg, and at least $36 million each of the last three seasons.

Moyes would recoup about $100 million in the sale to Balsillie.

Since moving from a downtown Phoenix arena to Jobing.com in 2003, the Coyotes have not made the playoffs and have struggled to fill the 18,000-seat venue in Glendale. They ranked 28th out of 30 NHL teams in attendance last season.

But league officials contend the Coyotes can be viable with better management and more success on the ice and they would prefer to see the team stay in Arizona.

"This is a hockey city," Mueller said. "Fans are tremendous here and we want to win to show our appreciation. We'll put in the work and give the fans something they deserve."

davetherave

davetherave
All-Star
All-Star

Reinsdorf has submitted his bid.

Group would keep team in Arizona
ESPN/AP, June 26, 2009


PHOENIX -- A group led by Chicago Bulls and Chicago White Sox owner Jerry Reinsdorf has offered to buy the bankrupt Phoenix Coyotes for $148 million and keep the team in Arizona.

The offer, submitted in bankruptcy court documents on Friday afternoon, is $64.5 million less than the bid by Canadian billionaire Jim Balsillie, who wants to move the franchise to Southern Ontario.

Reinsdorf's offer calls for a new Jobing.com Arena lease with the city of Glendale and unspecified new agreements with other creditors, including the NHL, which has been funding the club.

Friday was the deadline set by Judge Redfield T. Baum for potential buyers who would keep the team in Arizona to submit purchase applications to the NHL.

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