It would appear the NHL is hedging its bets with the Phoenix Coyotes.
On Wednesday it announced that they had stripped the franchise of the 2011 All-star game and was moving it to Carolina.
This news comes amongst the rumours that Ice Edge Holdings was ready to pull its bid for the team off the table after it’s negotiations with The City of Glendale over an improved lease agreement have gone nowhere.
“The city may leave us no choice,” Ice Edge CEO Daryl Jones told the Canwest News Service. “Their most recent proposal takes a number of steps back from prior agreements we have had with them.”
The Coyotes, despite their unexpected success on the ice this season, stand to lose $20 million for 2009-2010. And by all accounts that’s a very conservative estimate their current owners — the NHL — have thrown out there.
If Ice Edge does drop out that leaves the Coyotes with one potential bidder, Jerry Reinsdorf, and unlike Ice Edge he has made no commitment to keep the team in Phoenix. In fact in past bids he made it clear that any bid he makes would be contingent on creating an option within the lease that would allow him to move the team if they do not perform well financially, as well as an insistence that he be subsidized upwards of $25 million a season by the city to keep them there.
Good luck with that one. If Ice Edge can’t re-negotiate a lease to keep the franchise where it is, I doubt the recession-riddled city is ready to negotiate out clauses.
While Reinsdorf has reportedly made no formal bid this time around — he’s just back in the mix — I cannot imagine it would be anywhere near the $160-million bid that Ice Edge has made, especially with the carrot of the all-star game being yanked
In comparison, the Tampa Bay Lightning were sold for $100 million earlier this year — $15 million of which was financed by the league — despite carrying a much higher value by Forbes Magazine than the Coyotes do. In November of 2009 the magazine says the Lightning are some how worth $191 million — good for 18th in the league — and the Coyotes are worth just $138 million or dead last in the NHL.
How they figure those numbers is a little bit beyond me, but the real value of the Lightning should be $100 million because that’s what they got for them. If that’s the bench mark they have created then the Coyotes for all rights and purposes should be worth far less.
It is all a far cry from the $140 million the NHL spent to purchase the team out of bankruptcy and a mere drop in the bucket compared to the $242.5 million plus $50 million in incentives to the City of Glendale Jim Ballsillie was going to pay to move the franchise to southern Ontario.
It seems to me the NHL may be realizing this may end up being the solution after all.
While they have been able to find people willing to spend millions to keep equally cursed franchises in Tampa Bay, Miami and Nashville, the line up for potential bidders to keep the team in Phoenix has apparently disappeared like a mirage in the desert.
Now the league will claim that the relocation of the all-star game began when the team entered bankruptcy last summer, but that is a process they could have stopped at any minute after they made their purchase.
The fact they didn’t leads me to believe that they realize there is a strong chance the Coyotes may be pulling up their stakes in the off season. Otherwise, why remove a premiere function that would greatly off set next year’s losses?
To me it’s just another giant red flag that the NHL is finally starting to wake up from their desert dream.