PHOENIX – A group headed Jerry Reinsdorf has withdrawn from efforts to purchase the Phoenix Coyotes, a move that leaves Ice Edge Holdings as the only potential buyer that would keep the NHL team in Arizona.
Reinsdorf, owner of the Chicago White Sox and Chicago Bulls, issued a statement Monday night saying “it was time to move on.”
The Reinsdorf group once was the front-runner to buy the team but had fallen out of favour in recent weeks while Glendale officials worked out a memorandum of understanding with Ice Edge, a group of Canadian and American investors.
The Glendale city council is to vote Tuesday night on that memorandum, which gives Ice Edge exclusive negotiating rights for 60 days.
A new lease for the Coyotes to play at Jobing.com Arena is a necessary step before Ice Edge can proceed to try to purchase the team from the NHL.
In the statement, the Reinsdorf group, known as Glendale Hockey, called the decision to pull out “a difficult one because of our respect for the mayor, the council and management of the city.”
“Ultimately we came to the conclusion it was time to move on,” Reinsdorf said. “We were happy to serve a critical role for the City to keep the team in Glendale and we look forward to assisting the city in the future on other projects both as a company and individually.”
The statement concluded with the Reinsdorf group wishing “Glendale, its citizens and the fans of the Coyotes the best.”
The city council already had approved a memorandum of understanding with the Reinsdorf group while rejecting one proposed by Ice Edge. However, city officials later went to Ice Edge asking it to come back to the bargaining table.
A month ago, lawyer John Kaites, part of the Reinsdorf group, showed up at a city council meeting to say that Glendale Hockey was not out of the picture.
But the proposed memorandum to be presented to the council Tuesday night gives Ice Edge 60 days to exclusively negotiate with the city over a new lease. Another party could break that exclusive clause by giving Glendale US$25 million to cover the money the city has pledged to the NHL to cover the team’s losses next season if a sale is not worked out.
If somehow the Ice Edge plan falls through and no local buyer can be found, the NHL has said it would look to move the franchise, which never has turned a profit since it moved from Winnipeg in 1996. A possible destination for the franchise would be Winnipeg.
The Coyotes have lost tens of millions of dollars each of the last few seasons.
Then-owner Jerry Moyes took the franchise into bankruptcy last year with the intent on selling it to Canadian billionaire James Balsillie, contingent on moving the team to Hamilton. NHL officials have said they were about to present Moyes with a letter of intent from Reinsdorf to buy the team when the bankruptcy filing was made.
The NHL vehemently fought the proposed move in court, contending that the league had control over who owns its teams and where they play.
The Reinsdorf group and, later, Ice Edge made preliminary bids to buy the team out of bankruptcy, but both withdrew citing the inability to reach a new lease deal with Glendale. The NHL entered the bidding and was awarded the franchise when a judge rejected Balsillie’s arguments.