The bankruptcy case that continues to haunt the hockey world and, at this point, probably makes Judge Redfield T. Baum rue the day he applied to law school, just keeps getting curiouser and curiouser, doesn’t it?
The rhetoric in this thing has reached the status of now officially being laughable. When Jerry Reinsdorf pulled himself out of what looked like a one-man race to buy the Coyotes, he blamed some of his woes on having an “unwilling seller” (well, duh) and a deluge of “negative and misleading information.”
But what he said later in his statement was truly rich. “Not only has this stymied negotiations, but it has eroded local market demand for Coyotes’ tickets, luxury boxes and sponsorships.”
Wouldn’t the local demand have had to be there in the first place for it to be eroded? Isn’t the erosion of almost every revenue stream the reason why the Coyotes are in this predicament in the first place?
Of course, Reinsdorf’s troubles had nothing to do with the fact the concessions he was seeking would have made it absurd for the Coyotes to stay in Phoenix in the first place. But that’s what billionaires do. They buy things without the risk of using their own money and expect others to cover their losses.
So what we have now is Jim Balsillie’s $212.5 million bid that the NHL is desperately trying to scuttle; a $150 million bid from Ice Edge Holdings that sounds like it was concocted over a couple of beers after a pickup game; and a desperate undisclosed bid by the NHL, which would later flip the team to another party, which might even be Reinsdorf.
Perhaps the NHL’s claims there would be a conga line for suitors for the Coyotes were just a little misleading.
The questions that need to be answered now are: 1. How much has the NHL offered for the Coyotes?; and 2. If the Coyotes end up falling into the NHL’s lap, where would the money come to cover the purchase price and the losses? After all, it’s certainly not a slam-dunk that the league would be able to flip the Coyotes right away. When Major League Baseball purchased the Montreal Expos in 2001, it had to hold onto the team for three years before selling it.
My guess is the league has had this contingency plan in place for quite some time and already has the owners lined up for the cash call. I suspect this was all decided, at the very least, at the last board of governors meeting when the members voted 26-0 to not approve Balsillie’s bid. Leading up to the lockout, the NHL built up a $300 million war chest by getting $10 million from each team.
The purchase price would undoubtedly have to come out of some sort of slush fund rather than overall league revenues, so the players wouldn’t be any more adversely affected than they already are. The operating losses would have been absorbed by whoever owns the team anyway.
One thing, though, that having the NHL run the Coyotes would accomplish, you would think, would be that we could put to rest once and for all whether or not Glendale is a viable hockey market. The NHL has asserted all along that the Coyotes’ troubles have stemmed more from having a sub-par on-ice product than anything else and they may be right about that.
But with the league running the team, it could no longer lean on that excuse and the NHL could move onto the next trouble spot – the Tampa Bay Lightning.
Ken Campbell, author of the book Habs Heroes, is a senior writer for The Hockey News and a regular contributor to THN.com. His blog will appear regularly in the off-season and Fridays and his column, Campbell's Cuts, appears Mondays.
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