Building on a report from earlier this week, the mystery surrounding two potential buyers for the Phoenix Coyotes had a little light shed on it Thursday… although still no names for the alleged prospective owners.
A source familiar with the Coyotes situation as well as the “Roc and Manuch” sports radio show on KDUS-AM 1060 in Phoenix say there is a serious bid by a new Canadian-led ownership group to buy the hockey franchise.
The “Roc and Manuch” show reported today that the bid involves a minority owner involved with another National Hockey League franchise, and there could be a seven-year out clause that would allow the new owners to sell and/or move the team out of Arizona if market conditions do not improve.
Rumblings of an ‘out clause’ will without a doubt have hockey fans in potential relocation markets like Hamilton, Kansas City and Quebec City drooling, but it’s no sure thing. As Greg Wyshynski notes at Puck Daddy, it’s obvious that the NHL’s preference is to keep the team in Phoenix despite the wishes of any potential suitors:
So with this new bid for the team, we’re still looking at the seven-year itch. One bidder in three years was willing to commit to the region: Ice Edge. And that might have just been to differentiate their bid from Reinsdorf’s cut-and-run clause. No one is bidding for the Phoenix Coyotes again without an escape hatch. Ain’t gonna happen.
According to the NHL’s actions, they shouldn’t need one, of course, because the market can work under the right conditions.
The NHL has come this far, danced with so many partners and fought so many battles that it’s inconceivable they’re going to let the Coyotes move. Bettman doesn’t like to lose, and any scenario in which the Coyotes leave is a defeat, plain and simple.
This mystery bid is reportedly structured in a way that removes a significant portion of financing off the shoulders of tax payers, but it’s still dependent on bond sales from the city of Glendale. It’s hard to fathom this deal sneaking by the Goldwater Institute without another fight like the one Matthew Hulsizer faced in his bid.
From the Journal:
The official familiar with the Coyotes situation said the unnamed Canadian group has plenty of cash to make the deal. That same source said the group could put up $100 million, with $40 million to $50 million coming from the city of Glendale via bonds. The NHL could give approval to the deal in the coming days, according to KDUS.
Previous reports on Hulsizer’s bid, before he walked away from this mess of course, had him putting up just $70 million of his own money with $100 million coming from bond sales.
Whatever the case, it’s difficult to see any silver lining in keeping the Coyotes in Phoenix, even if there’s an ‘out clause’ being dangled as a carrot. Common sense would say it’s inevitable that this team packs up the tent and heads elsewhere to turn a profit. As Kent Wilson noted several months ago, the Coyotes are a losing venture anyway you look at it in Glendale:
Thanks to the tendency to perceive loss as something to avoid at all costs, the objective of keeping the Coyotes in Glendale has becoming an all consuming goal for the town and it’s mayor Elaine Scruggs (who has been one of the key figures in this fiasco since the beginning). Glendale has certainly invested a lot of time and money in trying to retain the Coyotes, but there’s little evidence their investment will bear fruit, whatever the outcome, since the market doesn’t appear able to support an NHL team (with apologies to those who are Phoenix Coyotes fans). There’s simply no compelling evidence that the Coyotes will ever be able to garner a meaningful profit in their current location. Meaning each dollar spent to keep the Coyotes around is a good bet to be a dollar lost. The situation is therefore a bottomless money hole.
We don’t really know how this will end, we just hope that it does.