New Hockey Arena Will be Ready for 2003-04 Season
Glendale Officials Step Up to Keep NHL Coytoes in the Valley of the Sun
City of Glendale officials have paved the way to keep the National Hockey League Coyotes in the Valley by agreeing to build the team a brand new, state-of-the-art arena at the Loop 101 Freeway and Glendale Avenue.
Glendale’s Mayor and City Council and Coyote officials made the announcement today at a 10 a.m. press conference at City Hall. Earlier in the day, the City Council approved a memo of understanding with the Ellman Companies, owner of the team, that will keep the team in Glendale for 30 years.
“This is a huge victory for the city of Glendale, Glendale residents and for hockey fans throughout Arizona,” said Glendale Mayor Elaine M. Scruggs. “The arena and surrounding development will positively impact Glendale and will eventually become the heart of the West Valley.
“This project came down to a business decision that
represented an incredible economic development engine for the western area of our city. What especially makes this a win-win situation for us is that Ellman will also redevelop the site currently occupied by the Manistee Town Center shopping mall at 59th and Northern avenues into a mixed-use commercial center.”
As part of the agreement, Ellman Companies will develop a mixed-use project of approximately 200 acres near the Loop 101 over a 10-year period consisting of three million square feet of entertainment,
retail, office, residential and other commercial uses.
The focal point of the project will be the multi-purpose arena that will serve as home to the Coyotes hockey team. Ellman will acquire the land, design and construct the arena and necessary infrastructure, including parking facilities.
Upon completion of the arena in 2003, the city will reimburse Ellman for all associated construction costs up to $180 million and will become the owner of the arena. Both the Coyotes and Glendale will use the arena for other public uses throughout the year.
The arena will be funded from taxes generated from the site, from General Obligation bonds earmarked for related projects, parking revenues and other dedicated revenue streams. Funding for this project will not affect current city services or delay any planned projects.
THE ULTIMATE SPORTS ROAD TRIP
By: Andrew Kulyk & Peter Farrell
| Jobing.com Arena Ranking by USRT |
| Architecture |  | 4 |
| Concessions | | 7.5 |
| Scoreboard | | 8 |
| Ushers | | 1.5 |
| Fan Support | | 4.5 |
| Location | | 4 |
| Banners/History | | 6 |
| Entertainment | | 7 |
| Concourses/Fan Comfort | | 7 |
| Bonus: USRT Red Carpet Treatment | | 4 |
| Bonus: Free Parking | | 3 |
| Bonus: Doug Moss is the Prez | | 1 |
| Bonus: No Obstructive Seats | | 1 |
| Total Score |  | 58.5 |
March 10, 2004 - In 1996 the Winnipeg Jets relocated to the Valley of the Sun and were reborn as the Phoenix Coyotes. America West Arena in downtown Phoenix became their new home, but it was plainly evident that this could only be a temporary arrangement. America West was built for basketball - the home of the NBA Phoenix Suns, and its intimate seating configuration was well suited for hoops action but horrendous for hockey. The result - thousands upon thousands of obstructed view seats. Plans were launched again and again for different arena plans - the "Los Arcos" project in suburban Scottsdale was the most ambitious, combining a hockey arena with a shopping mall, but that plan unraveled. Time passed, and eventually a huge tract of land was acquired in Glendale, a suburb northwest of Phoenix. Construction for the Coyotes new home began in 2001, and on December 27, 2003, the puck was dropped at the new Glendale Arena for the very first time, ushering a new era for NHL hockey, here, in the deserts of Arizona.
Getting to the Venue
Finding Glendale Arena is a snap, as the venue is located directly off Loop 101, an arterial expressway which winds its away around Phoenix's northern suburbs. Wide boulevards and ramps provide access to an elaborate road system which takes you into the arena property itself. There is nothing surrounding the venue except for wide open spaces and plenty of onsite parking. Parking for Coyotes games is free. Let's repeat that... parking for Coyotes games is FREE, the only franchise in the four major sports to offer complimentary parking for fans attending the event. Public transportation to the games is non existent... Phoenix and its suburbs is a huge sprawling metropolis, with subdivisions, stores, schools and expressways going up so fast they can barely keep up. Car transportation around these parts is an absolute must.
Outside the Venue
For now Glendale Arena rises out of the horizon in the middle of a huge vacant tract of land. But that is about to change, and in a very huge way. Right next door is the Arizona Cardinals new stadium, the framework going up and should be open in time for the 2006 NFL season. And Glendale Arena is the centerpiece of a massive project called "Westgate". This 6.5 million square foot development will consist of shopping centers, malls, entertainment venues, lofts, apartments, public park spaces, all with the arena serving as a focal point of an exciting synergy of (sub)urban planning. Shovels are ready to go into the ground soon, and when this project is done, will transform the arena project and this area into a vibrant and dynamic cityscape, unprecedented in sports venue construction.
Patrons going to Glendale Arena today will enter, for the most part, through gate 4, the main entrance to the arena, and a nicely landscaped public plaza awaits, with floodlit palm trees, benches, a large video board overlooking the main gate, and temporary stages with entertainment, as well as booths selling souvenirs and local radio stations promoting their wares. All makes for a nice gathering place. And chances are good that you will be enjoying the warm and balmy winter weather that only Arizona can offer during hockey season.
Architecture and Seating Bowl
The designers of this arena took elements of other NHL venues which have opened in recent years and incorporated them here. The main entrance plaza looks strikingly similar to the pavilion at the Office Depot Center in Sunrise, Florida. In the seating bowl there are stacked party suites in each corner, reminiscent of the configuration at Nationwide Arena in Columbus. The upper deck concourse is at the top of the seating bowl, same as at the Xcel Energy Center in St. Paul, and an outdoor Party Deck is similar to those in Dallas and Tampa Bay, where visitors can enjoy refreshments in the sultry Arizona air.
The outside of the building is brown and cooper colored granite with plenty of glass accents, and at night vertical neon strips shine brightly as a beacon, along with plenty of floodlit landscaping the venue looks as nice at night as it does during the day.
The seating bowl is configured in two decks, and in between those decks are two levels of luxury suites. Seats are all colored wine red, and interestingly, the upper deck seating balcony has a very steep vertical pitch, putting those fans right on top of the action. A great way to enjoy the game! As is the case with the new venues, Glendale Arena has all the 21st century technological enhancements - 360 degree surround LED boards along the balcony with companion ribbon boards scrolling underneath the scoreboard. And speaking of scoreboard, this one is a wide screen four sided affair, with dot matrix boards stacked above. All very nicely presented. Out of town scores for the NHL and NBA are continually scrolled on a panel on the surround board.
Concourses
Nice, clean and brightly lit concourses throughout the arena, with soft recessed lighting and sparkiing terrazzo tile floors, but the color scheme does seem to lend itself to being a bit sterile looking. However on the positive side, most spots in the upper and lower levels offer views of the seating bowl and the action on the ice.
Escalators are located on the north end of the building and take fans to all levels. The building is very easy to navigate, with plenty of wide public spaces.
Concessions
Food selection offers quite a variety of delicacies, and not just one that are near and dear to the local culture. Sausage Haus' offering brats, Delis with your favorite cold sandwiches, New York style pizza, even a Japanese cuisine stand all to be found at Glendale. And of course the aptly named Tortilla Flats with its selection of nachos, burritos, churros and other local fare. The team store is named "Coyotes Den", with a nice selection of merchandise and can be found near the main entrance.
Premium Seating
In addition to two levels of luxury suites, the Coyotes offer the Lexus Club, a second level seating perch in one end zone, with private entrance, nicely appointed bar area and premium food selections including a buffet. Patrons sitting along the glass have access to a separate club lounge at ice level, where fans can watch the players up close as they make their way onto the ice. An outdoor party terrace is also available to premium ticket holders.
Banners/Retired Numbers
There is but one banner hanging high in the rafters at Glendale Arena, and that is for #99, Wayne Gretzky, now part of the Coyotes ownership group. The banner is done in Coyotes team colors. Thankfully, the Coyotes haven't raised some silly and ridiculous banner like "Most Wins In A Season When The Outside Temperature Is 80 Degrees Or Above", and for that, we are profoundly grateful.
Hat Tricks, Assists, Penalties...
Hat Trick - to Phoenix Coyotes President and CEO Doug Moss, and also to Coyotes VP/Communications Rich Nairn, who went the extra mile to make our visit to Glendale Arena truly special. Doug is former Buffalo Sabres Prez, so when we emailed him and told him two roadtrippers would be coming from his old home town to pay a visit to his arena, he fixed us up with terrific club seats. Doug and Rich met up with us during the game, gave us their valuable time for an interview, and treated us with concession vouchers. Our humble thanks to these two guys and we are proud to induct Doug and Rich into the Ultimate Sports Road Trip Hall of Fame.
Assist - speaking of former Buffalo people (and we run into Buffalo transplants EVERYWHERE, how come nobody ever moves TO Buffalo?), former Buffalo radio personality Barry Buetel now works for the Coyotes as game host for the Coyotesvision telecast in the arena. We stopped by the in-arena studio and got a chance to chat with Barry for a few minutes before the game.
Penalty - Yes, again, we tangle with game day staff who are proud graduates of the Sphincter Police Academy. An octagenarian who we'll call "Gramps" was the usher at the top of our section, C-7. Every time we left our seats, for whatever reason, he would come down to our row once we returned and demand to see our tickets. Andrew finally blew up at Gramps and he then backed down. Keep in mind, this was the Lexus Club, one has to go through two ticket checkpoints just to get IN to this area of the building. But read on...
Penalty, and Game Misconduct - To "Carlos", the usher in sec 111/112, which is lower level center ice. We meandered down there with about four minutes left in the game, figuring to grab some photos and then set up for our official "in the building" shot. Keep in mind, the home team was down 3-1, and the fan exodus was well underway. Well, surprise, surprise, Carlos would not let us pass, even though we held a more expensive seat then the ones he was so zealously guarding. When the game concluded, we blew by him, to snag our photo before the lights dimmed. Well Carlos comes down and starts chirping at us how "we're in the way" and to hurry and finish up. Or else WHAT, Carlos? The game is over! Everyone has left! "I'm just doing my job", he mutters. No Carlos, you're not doing your job. Your job is to make your paying guests feel welcome, not intimidated. Your job is to exercise a little discretion in application of the rules. A nice gesture would have been to hold the camera and take the picture, but your arrogant and disgusting behavior was an embarassment to your team and for us, a blight on what was otherwise a perfect evening.
Assist - Don't let the above stories reflect on everyone we encountered in the building. We were warmly greeted when we entered, game day staff were more than happy to direct us around, and courtesy was the norm. Just a shame how a few Napoleonic bad apples could ruin it for all.
Penalty - once again, our karma wilts in the intense heat of the Arizona desert as the Coyotes are dominated by Kings team in the hunt to make the post season. The final tally is 3-1 and the game was really not all that competitive.
Hat Trick - To the Coyotes "HOWL". The howl is the signature chant when the home team scores, when the music is jacking up the fans, and is unique to this team. All very cool!
Assist - An elaborate display of the Westgate project is near the main lobby, and murals along with a scale model of the setup are all nicely presented.
Summary
Our assessment of these new venues always focuses on what is new and unique, a "signature element", so to speak, and it is in this department that Glendale Arena falls short. This building is nice, very nice, but what is here to set it apart from the rest? Not only are there no unique designs, but attractive features of other arenas were integrated into this venue, and what you have here is a mish-mosh that one could call "best of NHL arenas".
What would we suggest? First of all, give the lobbies and concourses a proprietary decor. How about southwest design - Native American and southwest art, accents and patterns that are unique to this region (go see San Antonio's SBC Center). For now this building could be replicated in any city in America and one wouldn't miss a beat. Second, do something to celebrate the team's history. Backlit photo panels of Coyotes great moments, players etc., adorning the corridors would do much to personalize the place. And yes, do something to showcase the franchise's move from Winnipeg. The story is a compelling one, and the franchise has a great history that include the buzzwords Avco Cup, portrait of the Queen hanging in the rafters, and the "whiteouts", where fans dress in white for the playoff games, a tradition which made its way south. This story deserves a place here. Third. Will the arena be truly integrated into Westgate, or will it be just a building in the neighborhood? We like sports venues in active and vibrant urban settings, and how this evolves and comes together will be something to watch. Lastly, with people pouring into this region in droves to live here, there should be enough of a market to fill this place. For now, scoring a Coyotes ticket is no challenge here.
For architecture, design, event presentation and future plans for Westgate, we still give Glendale Arena high marks. And the frosting on the cake has to be that FREE PARKING. Still shakin' our heads over that one!
Can't wait for a return visit in Fall 2006 to see what it all looks like then!
NHL SEEKS LEASE CHANGES TO HELP COYOTES
December 24, 2008
Copyright 2008 MediaVentures
Glendale, Ariz. - The NHL hasn't taken over control of the Phoenix Coyotes, but it is taking an
active role in trying to find new investors or ownership for the financially strapped franchise and is being kept apprised of any "significant" financial decisions the team makes, according to
ESPN.com.
The league also is trying to help broker changes to the existing lease with the city of Glendale
in the hopes of making the situation more attractive new investors or owners. The web site cited
has team and league sources for its report.
Coyotes owner Jerry Moyes is in dire financial straights, with his outside business interests -
most notably Swift Transportation, a large trucking firm - having been hammered by high gasoline
costs, followed by the dramatic downturn in the economy.
And although team officials say the club has never relied on Swift revenues to run the team, the
Coyotes aren't in much better shape and are expected to lose another $30 million or more this
season, on top of the more than $60 million they are reported to have lost the past two years.
In short, Moyes wants out, a number of sources told ESPN.com. At the very least, he is in
desperate need of an influx of capital to help in the continued operation of the team.
Multiple sources told ESPN.com the biggest hurdle is the current lease with Glendale.
The 30-year lease that accompanied significant municipal support in the building of
Jobing.com Arena (the municipality put up $180 million of the $220 million price tag) has a
number of problem areas as it relates to the franchise's ability to generate revenues.
Take parking. The Coyotes, unlike most teams in the NHL, receive nothing from parking fees
at the arena. Instead, they actually pay a surcharge of $2.70 per vehicle. That means instead of
generating upwards of $10 million in revenue, they pay more than $2 million.
In short, said one source, they are paying people to park at their building.
Changing that part of the lease is one of the areas the NHL is trying to help renegotiate with
the city. Ultimately, the league is hopeful it can help create strategies where both the municipality and the team can gain, as opposed to simply asking the municipality for concessions.
The league is helping the Coyotes by providing detailed data from other franchises on revenue
streams, especially those in non-traditional hockey markets.
Sources say the talks with the city "are in progress" but it's unknown how amenable Glendale
officials are to making alterations to the lease.
"Everybody agrees that we need to find a solution that works for both of us," team CEO Jeff
Shumway told ESPN.com.
No one knows for certain if the Coyotes can finish out the season under the current financial
climate, and at some point the specter of bankruptcy looms large.
Sources say the team hasn't come close to failing to meet the payroll, but if that situation were
to present itself, the NHL would move swiftly to take over operations.
The fact the league is significantly involved now suggests it is in a position to step in quickly to provide what might be described as bridge funding of the team's operational costs and maintain the integrity of the franchise.
"There simply aren't any subtle ways to deal with this situation anymore," a source said.
City of Glendale spokesperson Julie Frisoni said the city has a policy of not discussing ongoing
negotiations. She did say that city lawyers have investigated the lease and believe that in the event of bankruptcy, the city and its investment are well-protected.
It's not unprecedented for the NHL to take such a hands-on approach to assisting a team
through troubled times. The situation in Phoenix has been likened to the situation in Ottawa a
number of years ago, when Rod Bryden was trying to sell the financially troubled Senators.
The league was instrumental in assuring a seamless transition to the current owner,
pharmaceutical businessman Eugene Melnyk, and the Senators continue to be a successful
franchise.
The league also played a major role in bringing together the sides in the Pittsburgh arena
situation, when two years ago it looked as if the Penguins would move out of Pittsburgh, with
Kansas City as the most likely destination.
Although the team's financial future seems doom and gloom, there are actually a number of
positive elements.
First, ticket sales have increased about 77,000 from a year ago, team officials said. Television
ratings have improved dramatically and if the team continues its strong play and can make the
playoffs and take advantage of a few home dates (they were in seventh place in the Western
Conference as of Tuesday), the bottom line will be significantly improved.
The Coyotes are one of the biggest benefactors of the NHL's revenue-sharing program as well,
and last year received $15 million, something that should also be attractive to potential investors.
The NHL has approached head coach Wayne Gretzky about the potential changes to the
ownership group and he has assured league officials he isn't going anywhere. Gretzky remains one
of the pre-eminent names in pro sports, and knowing he's on board with the improving Coyotes,
even if there is another ownership change, is a huge selling point, sources told ESPN.com.
Although it's assumed Moyes is beating his own financial bushes looking for help, the NHL has
also gone back to its list of potential buyers and is or has approached them about their interest in the Coyotes.
Hollywood movie and television mogul Jerry Bruckheimer, long thought to covet an NHL
franchise, has been linked to the Coyotes.
Because the primary goal of Moyes and the NHL is to keep the Coyotes in Phoenix, BlackBerry
inventor Jim Balsillie would be ruled out, at least for the time being. His interest in NHL
ownership generally has been limited to teams he might at some point be relocated to Ontario.
It's not believed a breakthrough, either in terms of significant investor relief or an ownership
takeover, is imminent, although that could change in a short period of time. (ESPN.COM)
February 26, 2009
Copyright 2009 MediaVentures
A record of lease payments by the Phoenix Coyotes shows that Glendale has been letting the team play virtually rent-free at Jobing.com Arena for seven months. Based on past payments, the break could be worth as much as $4 million over the course of a year, even as the city asks employees to make deep cuts. Glendale Mayor Elaine Scruggs defended the city's agreement with the hockey team, saying it's not what it appears to be. Scruggs declined to say who was picking up the tab, citing confidential talks between the city and potential Coyotes investors over the team's lease agreement. The National Hockey League reportedly has been paying some of the Coyotes' bills. City Manager Ed Beasley said the Coyotes aren't getting a free ride: payments will be made but some have been delayed by the contract negotiations. Glendale officials announced earlier this month that it's cutting $2.5 million, or 10 percent, from its operating budget. (Arizona Republic)
COYOTES CURRENT WITH ARENA PAYMENTS
March 5, 2009
Copyright 2009 MediaVentures
Glendale, Ariz. - The Phoenix Coyotes' rent checks to Glendale are up to date after seven
months of putting off paying the bills.
The team suspended its payments on Jobing.com Arena last August due to contract
negotiations, Coyotes and city officials said last week. Coyotes owner Jerry Moyes is in talks with investors about taking a majority stake in the NHL team.
The team sent wire-transfer payments to Glendale just days after new reports about city
financial documents showed that almost $300,000 in monthly lease payments and thousands more
in other fees were missing.
City and team officials did not disclose that payments had been made until questioned this
week.
"They are now paid up in full," City Manager Ed Beasley said. "They made their payments like
they always said they were going to do."
The Coyotes pay the city a $42,708 arena lease fee each month, plus a percentage of parking
fees, sales tax, security costs and repairs. In return, the city took on $180 million in debt to build the arena five years ago.
Coyotes President Douglas Moss said the team made the lease payments once certain issues
that were a part of months of discussions had been resolved.
"We are going to stay current from here on out," he said. "We're moving along." (Arizona
Republic)
COYOTES FILE FOR BANKRUPTCY
May 7, 2009
Copyright 2009 MediaVentures
Glendale, Ariz. - The Phoenix Coyotes have filed for bankruptcy, setting off a clash between the
team, the league and potential new owners.
The league was within an hour of announcing a new owner when the team filed for bankruptcy.
Observers said bankruptcy was needed in order for the team to break its lease for Jobbing.com Arena.
The bankruptcy filing said owner Jerry Moyes had agreed to sell the franchise for $212.5
million to Jim Balsillie, CEO of Research in Motion, creators of the BlackBerry, and a serial bidder
for NHL teams. Balsillie reportedly wants to move the team to Ontario and reports say the sale is
continent on approval for the move.
The league responded by saying it had "removed Jerry Moyes from all positions of authority to
act on behalf of the club" and that the NHL would appear in court. A hearing is set for 1:30 p.m.
today (Thursday)in U.S. Bankruptcy Court in Phoenix.
Hamilton, Ontario, is the city most often linked with Balsillie and an NHL franchise. Balsillie
discussed plans with the city when he attempted to buy the Nashville Predators. Hamilton officials
say they will meet with Balsillie's staff.
The Ontario market is adjacent to areas served by the Toronto Maple Leafs and the Buffalo
Sabres. Maple Leaf Sports Entertainment had no comment on the Coyotes' situation, but Buffalo
officials hope the league will block a move.
The bankruptcy filing shocked Glendale, which contributed $180 million for the $220 million
arena that opened in 2003. For the city's investment, the team signed a 30-year agreement with an
early-termination penalty of more than $700 million.
As part of its effort to help the team survive, Glendale was working with Jerry Reinsdorf, owner
of the Chicago White Sox and Chicago Bulls, and other investors to take over the team. Reinsdorf
has a home in the Glendale area.
City administrators were giving council members an update on hockey negotiations in a
closed-door session when word of the bankruptcy surfaced. Glendale City Councilman Phil
Lieberman said that bankruptcy was the one thing that could trump the penalty.
Attorneys involved in the bankruptcy filing said a bankruptcy judge could overrule the NHL if
the court finds the sale is in the best interest of creditors. The NHL may have to fight federal
antitrust laws if it refuses to let the Coyotes move.
In August, the Coyotes stopped paying the city rent, parking fees and most of its security costs
at Jobing.com Arena, according to Glendale city records. The city was paid nearly $351,000 for
past-due rent on Feb. 25, the day after the NHL agreed to loan the team an unspecified amount.
As part of the loan agreement, the league had the right to take over the franchise if NHL loan
was not paid. City officials say the league has promised them that all money owed will be paid.
City records show that over the past four years, from August to April - the current time frame
the city has not been paid - the Coyotes paid Glendale from $577,000 to nearly $2.5 million for
parking and security costs.
Most of that comes from parking fees the team collects as a surcharge on ticket sales, which
allows those attending events at the arena to park for free.
If the sale is approved, two secured creditors will be paid, with $35 million going to the NHL,
which lent the team money in February to stay in business, and $80 million to SOF Investments, an
affiliate of computer entrepreneur Michael Dell's MSD Capital.
The rest of the money, or $97.5 million, would be divided among at least 40 unsecured
creditors. Moyes has the largest claim, at $103.8 million, according to the bankruptcy filing.
The filing also showed the team lost $73 million in the past three fiscal years and the team's
arena management firm lost $20.1 million during the same time. Ticket sales were 41 percent to 43
percent of total revenue compared to about 50 percent for the average NHL team.
Moyes, who made his fortune running trucking company Swift Transportation, owns nearly 92
percent of the team. He also is giving up his $206.5 million equity stake as part of the bankruptcy.
BANKRUPTCY JUDGE DELAYS ACTION OVER COYOTES
May 21, 2009
Copyright 2009 MediaVentures
Glendale, Ariz. - A U.S. Bankruptcy Court judge has told the NHL and the Phoenix Coyotes to
sit down with a mediator and try to work out their differences before battling them out in court. The
move means the team is likely to play its next season in Arizona.
The sides will report their progress on mediation next week. If they are not successful, the
judge said he would rule on the matter.
That ruling could be influenced by a plan by one of the Coyote's minority partners who is
attempting to put together a new ownership group that would keep the team in Glendale. The
owner, Jim Brewlow, is not commenting on the effort.
The judge also ordered both sides to present written arguments by June 12 regarding whether
the team can be relocated to Canada, as current owner Jerry Moyes wants as part of the sale of the
team, or stay in Glendale, as the NHL is trying to enforce. A hearing is set for June 22.
The City of Glendale asked for an injunction to force the Coyotes to honor their lease and
continue playing at Jobing.com Arena. No ruling was made.
The NHL had argued that it has been making all the decisions for the team since November
when owner Moyes surrendered control of the franchise. They say that decision gave Moyes no
right to take the team into bankruptcy court.
The league says Moyes signed numerous legal records that acknowledged only the league
could approve the sale and transfer of the franchise, including a 2006 document when he took
control of the team.
The NHL did not officially terminate Moyes as Coyotes chief executive until May 5. That's
when the Coyotes filed for bankruptcy and proposed selling the team for $212.5 million to Jim
Balsillie, who plans to move the team to Hamilton, Ontario. The Coyotes have complained their
lease with Glendale, which runs through 2033, hurts the team's finances. Bankruptcy would be one
avenue for voiding the lease with the city.
The team also has filed an antitrust suit against the NHL in order to force the sale. Thomas
Salerno, an attorney for the team, has said that Moyes gave the league voting rights only and that
operating agreements allowed him to file for bankruptcy protection.
NHL bylaws prevent Balsillie from moving the team. In Hamilton, the franchise would compete
with nearby teams in Toronto and Buffalo, N.Y.
Moyes made no apologies for considering a move of the team saying, in an open letter to the
public, "I have a responsibility to all of the creditors of this business. No one other than Canadian
businessman Jim Balsillie's company has offered enough to pay the creditors, which led to my
initiating a court-supervised sale process. This process will be open and transparent, and all offers
current and future must be fairly examined; guaranteeing an equitable offer."
The NHL's legal filing shed light on the team's operations last season. The team has said it lost
$73 million the three fiscal years ending June 30, but losses for the most recent season have not
been disclosed.
The Coyotes in August notified the NHL that Moyes, who since 2001 invested more than $300
million in the club, anticipated having trouble funding the team for the 2008-09 season.
Later that month, the NHL agreed to advance the team $6 million, and the league ultimately
lent the team more than $35 million, making it the team's second-largest secured creditor behind
$80 million owed to a banking affiliate of computer entrepreneur Michael Dell.
By Oct. 14, 2008, Moyes, who made his fortune in a trucking business that has been affected by
the recession, told NHL officials he was "broke" and "done" funding the team, documents said.
A month later, Moyes signed proxies with the league that gave NHL Commissioner Gary
Bettman control of the club and prohibited Moyes from selling the team or placing it into
bankruptcy protection, the NHL filing said.
David Zimmerman, the NHL's general counsel, also negotiated for financial assistance with
Glendale and others on behalf of the team. In August, the team stopped making rent payments to
the city and the Coyotes owe Glendale about $2.5 million from arena-related expenses. The team
did make a $351,000 payment in February, after the NHL provided more money to the Coyotes.
The filing said Bettman also "exercised his proxy authority" and fired CEO Jeff Shumway on Jan.
23. Moyes was given the title of chief executive.
Glendale officials were concerned about how a move would affect the city's bond ratings and
arena revenues. The city was working with the league in its effort to sell the team to Chicago White
Sox owner Jerry Reinsdorf.
The city's fears were realized when, in a ratings update, Moody's analysts said they are "closely
monitoring" the situation.
"Should the Coyotes succeed in leaving Glendale," Moody's investors write, "this loss of rental
and ticket surcharge revenues, along with diminished sales tax revenues generated by the retail
establishments in and around the arena which comprise the Westgate development, will add to the
budgetary pressure the city is experiencing as a result of the recession."
Still, Moody's points out that the $180 million in bonds Glendale used to build the arena five
years ago "remain well-secured."
Instead of securing the debt solely with revenue from the arena and surrounding developments,
Glendale pledged city-wide excise and property taxes to cover the payments, which potentially
could buffer the loss of the Coyotes, according to Moody's.
But the city promised taxpayers to pay it off with the business boost expected from the arena
and Westgate. Otherwise, debt payments could cut into money for services to residents or reserve
funds.
Between 2005 and 2008, the city made good on that promise.
Glendale paid $25.9 million on arena debt and brought in $27 million from developments
directly related to the arena deal, according to city financial records.
Like most cities, Glendale has had to cut its general fund dramatically to deal with the plunging
economy. And the city plans to hold 9.6 percent of its general fund as reserve money in budget
year 2009-10, though city financial guidelines call for holding 10 percent in reserve.
COURT EXPEDITES HEARINGS ON COYOTES' MOVE
May 28, 2009
Copyright 2009 MediaVentures
Glendale, Ariz. - A U.S. Bankruptcy Court judge believes the issue of whether the Coyotes can
move out of Glendale deserves an expedited hearing and has set June 9 to hear arguments. Judge
Redfield Baum promises to rule shortly thereafter.
Team owner Jerry Moyes rushed the franchise into bankruptcy in hopes of selling it to Jim
Balsillie who has plans to move the team to Hamilton, Ontario. Meanwhile, the NHL was working
on its own plan to sell the team to a group led by Chicago White Sox owner Jerry Reinsdorf who
would have kept the team in Arizona.
Balsillie was willing to pay $212.5 million for the franchise which is reportedly more than the
Reinsdorf group. If the hearing had been delayed until June 22, as originally planned, it could
have endangered a sale to Balsillie who set the end of June as a deadline to close the deal.
The NHL, which has been supported in court papers by the NFL, Major League Baseball and
the NBA, believes it should determine who can buy a franchise and where it can be located. Moyes
disagrees, citing antitrust laws, and his desire to maximize the value of the team for its investors.
The judge also ruled that the team will be auctioned June 22 if the ruling goes in favor of
Moyes or Sept. 10 if the NHL prevails. The NHL says it is open to bidders who want to keep the
team in Glendale.
The City of Glendale wants to keep the team in Jobbing.com Arena in order to protect revenue
streams for its bonds.
JUDGE REJECTS QUICK SALE TO BALSILLIE
June 18, 2009
Copyright 2009 MediaVentures
Phoenix, Ariz. - A federal bankruptcy court judge has rejected a June 29 deadline to meet Jim
Balsillie's offer to buy the Phoenix Coyotes and move the franchise to Canada. Balsillie says he's
not finished with his efforts to acquire the team.
The city of Glendale, which holds the debt on Jobing.com Arena, and the NHL opposed the
sale to Balsillie. Owner Jerry Moyes sought to sell the team for $212.5 million while the NHL was
putting together a plan that would have resulted in a lesser amount.
The judge dismissed that timing as untenable, considering the complexity of issues that need to
be resolved. The league says it has four potential buyers who would keep the team where it is.
The judge's decision, at least for now, makes moot arguments by the NHL that the league
should decide where teams can be located and Moyes' claim that such actions violate anti-trust
laws. It also sets Glendale's concerns aside because no move is on the table. A move is still possible
if the judge decides to proceed with the bankruptcy proceeding and auction off the franchise.
The judge suggested that Balsillie and the NHL work together in a mediation process.
Balsillie's representatives said they are open to that and to discussing a possible relocation fee to
the league. The league believes a fee is appropriate because of the impact a move would have on
the Toronto Maple Leafs and the Buffalo Sabres.
"We still think there is enough time for the NHL to approve Mr. Balsillie's application and
move the team to Hamilton by September," said a spokesman for Balsillie. "The court invited
mediation on these issues and Mr. Balsillie is willing to participate in such mediation ..."
While noting that the case raised many unique legal issues, the judge sided with the league on
most of the issues. The judge said the Coyotes had a contract to play in Glendale, a Phoenix
suburb, and Balsillie's offer would violate that contract.
"Simply put, this court disagrees with the assertions by [Balsillie's lawyers] that the relocation
requirement can be excised from the Ôcontract' because it violates some portion of [the bankruptcy
code] or is unlawful under the anti-trust claims alleged by [Balsillie]," the judge wrote.
The judge added that Balsillie's offer had to satisfy the relocation fee issue. He said, "this
apparent economic right of the NHL must be appropriately resolved for the [offer] to satisfy the
requirements [of bankruptcy law]."
VALUE OF NEW NHL FRANCHISE PUT AT $265 MILLION
July 23, 2009
Copyright 2009 MediaVentures
Toronto, Ontario - Papers filed as part of a bankruptcy filing by Phoenix Coyotes shows that the
value of an NHL expansion franchise is about $265 million.
The estimate came from the club's majority owner, Jerry Moyes, who put the club into Chapter
11 protection and wants to sell it to Canadian Jim Balsillie. There are no details as to how Moyes made the calculation.
The figure surfaced in a letter that the NHL's general counsel, David Zimmerman, sent to
lawyers representing Balsillie and Moyes. In the letter, dated July 2, the league asked for
information pertaining to Balsillie's request to move the club to Hamilton.
Zimmerman wants census data for Hamilton and financial statements for Copps Coliseum
along with renovation plans for the arena.
Balsillie has submitted a $212.5 million bid for the Coyotes but it can't be considered until the
bankruptcy court holds an auction on Aug. 5 for buyers who will keep the club in Phoenix. So far
only Chicago businessman Jerry Reinsdorf has made a proposal, worth up to $148 million. If that
auction doesn't yield a sufficient bid, a relocation auction will be held on Sept. 10.
If Balsillie is allowed to move the club, he will have to pay a relocation fee to the NHL. Based
on Moyes's calculation, Balsillie would pay around $52.5 million. That is far below what the NHL
has suggested.
Meanwhile, a group of Canadian and American businessmen plans to submit an offer soon to
purchase the Coyotes for more than $140 million.
The group is led by Daryl Jones, a manager director at Research Edge LLC in New Haven,
Conn. Jones, who is Canadian, said group members met with NHL commissioner Gary Bettman
and deputy commissioner Bill Daly to go over their plans for the Coyotes.
Jones said his group is still finalizing its offer, but it will be comparable in value to a proposal put forward by Reinsdorf.
Reinsdorf's offer is conditional on a new arena lease.
Jones said his group also wants a new lease for Jobbing.com Arena, and it has held several
meetings with officials from the City of Glendale, the Phoenix suburb that built the facility in which the NHL team plays.
The group must submit a formal bid by July 24 in time for the U.S. bankruptcy court's auction
on Aug. 5 for bidders interested in keeping the club in Phoenix. So far, only Reinsdorf and Jones's group have come forward.
If that auction fails, another one will be held on Sept. 10 to relocate the club.
TWO BIDDERS FOR COYOTES IN GLENDALE
July 30, 2009
Copyright 2009 MediaVentures
Glendale, Ariz. - An American group is the only formal bid submitted to buy the Phoenix
Coyotes and keep the team in Glendale, Ariz., but a new Canadian group has been working on a
similar plan If an acceptable agreement can be reached with one of the groups, the team will
remain at Jobing.com Arena. If not, the team could be headed out of town when a new set of
buyers offer their bids with the freedom to move the franchise.
The decision will be made in U.S. Bankruptcy Court where bids are filed, but the NHL has
made it known that it favors a bid from a group led by Jerry Reinsdorf, owner of the Chicago Bulls and White Sox. In a special meeting Board of Governors meeting this week, Reinsdorf's bid was approved.
The Canadian bidders include Anthony LeBlanc and partners Keith McCullough and Daryl
Jones, a couple of Canadians who played hockey together at Yale University and now run an
investment firm in New Haven, Conn., called Research Edge. The NHL did not consider the bid,
calling "incomplete," but it recommended to the group that it continue its efforts.
LeBlanc, 39, left RIM last year after nine years with the company, where he was vice-president
of global sales. At first, he pursued a few investment ideas and launched another hockey venture - bringing an Ontario Hockey League team to his home town of Thunder Bay. McCullough, who is
also from Thunder Bay, heard about the OHL idea and offered to help, along with Jones.
They were on track with those plans until May 5, when Coyotes' majority owner Jerry Moyes
put the club into bankruptcy protection and announced a $212.5 million deal with Jim Balsillie
who wants to move the franchise to Hamilton, Ontario.
Reinsdorf's group has offered $148 million for the Coyotes and also wants a new arena lease.
LeBlanc believes the financially-struggling club can be successful. He cites small changes such
as charging for parking, putting a restaurant in the arena and changing marketing tactics as first steps.
If they win the auction with its $150 million offer, the group plans to move the Coyotes' farm
team, the San Antonio Rampage, from Texas to Thunder Bay and help build a new arena.
It also wants to bring five of the Coyotes' regular season games to Saskatoon or Halifax.
The group has talked with officials from both cities and is leaning toward Saskatoon, although
no firm deal is in place. If the National Hockey League approves the plan, the Coyotes would play
"home games" in Saskatoon's 11,300- seat Credit Union Centre against the Montreal Canadiens,
Calgary Flames, Edmonton Oilers, New Jersey Devils and Vancouver Canucks.
If the Coyotes make the playoffs, the Coyotes would hold some of those games in Saskatoon as
well.
NHL deputy commissioner Bill Daly said Balsillie's bid was rejected under bylaw 35 of the
league's constitution. That section says the league can reject potential owners if it does not believe they are of "good character and integrity," as well as for financial reasons.
Balsillie says he will continue with his efforts to acquire the team and noted that Bankruptcy
Judge Redfield T. Baum told the NHL earlier that because it approved him as an owner when he
tried to buy the Pittsburgh Penguins in 2006, it could only reject Balsillie as an owner if there was a "material change" in PSE Sports & Entertainment, the company Balsillie formed to handle the
Penguins and Coyotes bids.
Daly responded by denying Balsillie had been approved as an owner in 2006.
Balsillie is hoping Judge Baum will accept his bid because it offers $64.5 million more than
Reinsdorf's bid. The Reinsdorf bid is largely based on the assumption of debt. It is also conditional on working out a new lease and revenue concessions from the City of Glendale, plus concessions from the major creditors.
JUDGE DELAYS COYOTES AUCTION
August 6, 2009
Copyright 2009 MediaVentures
Glendale, Ariz. - The accidental leak of confidential financial information may lead Jerry
Reinsdorf to withdraw his $148 million bid to buy the Phoenix Coyotes. Reinsdorf is the only
official bidder for the franchise who wants to keep the team at Jobing.com Arena.
Judge Redfield Baum also this week opened the bidding to all interested parties. Previously
he had separated bidding deadlines between those who want to keep the team in Glendale and
those who wanted the option to move the franchise.
At the request of the league and the city, Judge Baum agreed to postpone the auction of the
team to Sept. 10. Glendale and the NHL said they needed the additional time to regroup with
Reinsdorf's group and another bidder.
The confidential information was posted publicly through the court's Web site by attorneys
for Coyotes owner Jerry Moyes.
The document described proposals Reinsdorf has made during negotiations with Glendale
on how to raise millions in yearly team revenue. The team has lost as much as $30 million each
season.
Almost immediately, Reinsdorf's attorneys expressed "complete disbelief that such
confidential information was released" and "threatened to walk away from the bidding process,"
Glendale officials told the court in filings.
The disclosure "undermines the ability to get a deal negotiated with any bidder," including a
second buyer group, Ice Edge Holdings, the city said. If bidders walked away, the damage
would be "staggering for Glendale."
The city owns Jobing.com Arena, where the Coyotes play, and invested about $180 million
in the facility, a key feature in Glendale's sports and entertainment district.
The leaked confidential filings say Reinsdorf has asked for a special taxing district to be
created in the district that would provide as much as $23 million next fiscal year through a
voluntary surcharge on retail sales.
The Arizona Cardinals, which play in nearby University of Phoenix Stadium, have filed
papers with the court objecting to the district.
Additionally, if the team were still losing money after five years, Glendale would have to pay
Reinsdorf $15 million for each year of losses or allow the team to be sold and relocated,
according to Moyes' filing.
There was no indication that Glendale officials had agreed to any of these conditions, nor
has a City Council meeting to approve such a deal been scheduled.
It was unclear whether the leak was intentional or not.
It appears Moyes' attorneys indicated before filing that they planned to submit the
documents to the judge under seal.
Moyes hopes the court allows him to accept a $212.5 million offer that includes a plan to
move the team to Ontario. Moyes allegedly took the team into bankruptcy as a way of accepting
that offer.
MOYES APOLOGIZES FOR LEAK OF FINANCIAL DATA
August 13, 2009
Copyright 2009 MediaVentures
Glendale, Ariz. - Jerry Moyes, owner of the Phoenix Coyotes, has said through his lawyers that
he's sorry for the accidental release of sensitive financial information about the club. The
information was posted on the U.S. Bankruptcy Court's web site.
One of the bidders for the team, Jerry Reinsdorf of Chicago, says the release makes
negotiations difficult between his group and the City of Glendale which owns Jobing.com Arena.
Reinsdorf is seeking lease concessions from the city if he takes over the franchise for $148 million.
The city agrees that the disclosure was wrong and has asked that a contempt of court citation
be issued. In addition, the city asked for:
* Postponement of the Aug. 5 Glendale-only auction of the team until September.
* A ruling by the court that the team should play the 2009-10 season in Glendale.
* Removal of Moyes and his attorneys from the sale process "so that there can be a fair
and reasonable shot at getting a sale in Glendale."
* Monetary sanctions against Moyes and his attorney.
Moyes' attorneys have objected saying the first two issues already have been resolved and that
the removal of Moyes would be excessive, because he did not review nor was he involved in the
mistaken filing. The court has already delayed the auction.
The bankruptcy court also learned this week that the Coyotes' largest creditor, SOF
Investments, has a deal with Reinsdorf on how to handle$80 million in debt. The deal reportedly
involves a substantial pay down along with a rollover of the balance. The firm, which is owned by
computer mogul Michael Dell, says with the agreement and an adjustment of the building's lease,
it would support the sale of the team to Reinsdorf.
Meanwhile, Jim Balsillie, the man who wants to buy the Coyotes from Moyes for $212.5 million
and move the team to Hamilton, Ontario, says Copps Coliseum can be ready to host the NHL team
Oct. 10. Additional work would be needed to bring it up to league standards, but that is expected to be mostly complete for the 2010 season. Additional work would be planned for the 2011 season.
REINSDORF DROPS BID FOR COYOTES; NHL TAKES HIS PLACE
September 3, 2009
Copyright 2009 MediaVentures
Phoenix, Ariz. - Chicago White Sox owner Jerry Reinsdorf has dropped his bid to buy the
Phoenix Coyotes. The bid has been replaced with one from the NHL that includes a provision that
allows it to move the franchise.
The Reinsdorf bid, which had been endorsed by both the NHL and the Coyotes' largest creditor,
SOF Investments, fell apart when negotiations with the City of Glendale could not secure the
necessary subsidies to make the club viable in Jobing.com Arena.
It had earlier been reported that Reinsdorf was looking for $23 million in local subsidies
annually.
Reinsdorf blamed the breakdown on Coyotes owner Jerry Moyes, who entered into a deal to sell
the club to Jim Balsillie for $212.5 million, the same day it was put into bankruptcy protection on May 5. Balsillie wants to move the franchise to Hamilton, Ontario, a move the NHL opposes.
The only other bid is from a group known as Ice Edge Holdings LLC, which has pledged $150
million and plans to play some Coyotes home games in Saskatoon. The group said it had reached
agreements with SOF Investments and has plans to more effectively use Wayne Gretzky, the
Coyotes' coach and hockey legend.
The NHL's plan is to buy the Coyotes out of the auction, then work toward selling them to a
third party that would keep it in Phoenix, at least for the time being. Gaining control of the club through the auction would allow the NHL to place the Coyotes in the hands of an owner it wants, without the interference of a bankruptcy court. It would also allow the league to cut Balsillie out of the process.
The NHL has unanimously rejected Balsillie as a potential owner and has argued the league's
decisions on who owns its clubs and where they play cannot be overridden by a bankruptcy court.
A bankruptcy auction will be held Sept. 10, but whether the NHL and Balsillie have a
head-to-head showdown in court will be determined at a hearing. Among the issues to be settled
by Judge Redfield T. Baum is whether Balsillie is a qualified bidder for the team. Baum held the
hearing this week, but has not issued a decision.
Officials in Glendale say they are intent on keeping the team at Jobing.com Arena.
"We want to do what's best for the city. We don't want to give any money away," Vice Mayor
Manny Martinez said.
The vice mayor said he wouldn't support the city creating a special taxing district or adding a
so-called escape clause to the lease, allowing a new team owner to relocate the Coyotes if the team kept bleeding money in a number of years.
BALSILLIE OFFERS TO BUY OUT COYOTES' LEASE
September 10, 2009
Copyright 2009 MediaVentures
Phoenix, Ariz. - Bidder Jim Balsillie has increased his bid for the Phoenix Coyotes and is
offering to buy out the team's lease for Jobing.com Arena in Glendale. Balsillie made the pledge in
documents filed with the U.S. Bankruptcy Court. A judge is scheduled to determine this week of
Balsillie's bid is honored and whether he can move the franchise to Hamilton, Ontario as his bid
requires.
Balsillie's firm, PSE Sports and Entertainment, will offer up to$50 million to Glendale as part of
an amended bid for the team. PSE would then reduce its original $212.5 million bid by $20 million.
The end result is an offer worth up to $242.5 million, but is still contingent on the ability to move
the franchise to Hamilton.
"PSE's offer acknowledges the city's significant damages, and provides a much greater recovery
than the city would receive under the NHL's bid when the (Jobing.com Arena) lease is rejected at
the end of the season, as is likely," Balsillie's lawyers wrote.
The revised offer requires the city to accept the money in exchange for dropping its other
claims before the court including any fees associated with PSE breaking the lease at Jobing.com
Arena and moving the team to Hamilton.
"PSE cannot force Glendale to sell its claims, of course, but is willing to buy them for $50
million," the PSE lawyers wrote.
The amended offer also extends the deadline to complete the deal by a week from Sept. 14 to
Sept. 21. The NHL would have 10 days following the agreement of the sale to appeal the court's
ruling - if PSE wins the auction - which means the soonest the deal could close is Oct. 2.
Further, if PSE wins the auction and the NHL appeals - as the league has vowed it will - PSE
will put $25 million in an interest-bearing bank account "so that the unsecured creditors will
recover the time-value of money when the court's decision is upheld."
The NHL and PSE are expected to participate in the court-supervised auction, but before that
can take place Judge Redfield T. Baum must rule on an NHL request to bar Balsillie's group from
the proceedings. The NHL voted against approving Balsillie as an owner at a board of governors
meeting in July, citing character and integrity issues, and believes the court should not impose an
owner on the league.
The NHL is willing to pay $140 million for the club, but plans to resell the team to a person or
group favorable to the league. Ice Edge Holdings, a group of Canadian and U.S. businessmen, had
offered $150 million for the team and keep it in Phoenix, and hoped to bring five regular season
games and some playoff games each year to Saskatoon, but the firm has reportedly dropped out of
the race.
The latest PSE proposal supposes the Coyotes will have to play at least some games at
Jobing.com Arena in Glendale this season and the $50 million is intended to in part offset the costs
of game day operations as well as the lease-break fee when the team eventually moves. Originally,
Balsillie wanted to relocate the team to Hamilton in time for the 2009-10 season - now less than a
month away - but his lawyers told the court they would be amendable to moving the team either
midway through this season or in time for the 2010-11 campaign.
The new offer only guarantees Glendale $40 million as up to $10 million could be taken away
depending on the relocation fee PSE will be ordered to pay if it wins. Balsillie's camp believes
$11.2 million to $12.9 million is a reasonable fee for moving the club, while the NHL counters it
should be between $101 million and $195 million.
Current owner Jerry Moyes put the team in bankruptcy protection in May and is trying to
recoup some of his losses. He claims to have lost upwards of $300 million since he first invested in
the club in 2001.
GLENDALE TURNS MOYES AWAY, PREFERS NHL'S DEAL
September 17, 2009
Copyright 2009 MediaVentures
Glendale, Ariz. - Phoenix Coyotes owner Jerry Moyes this week sought to make his case
directly to the Glendale City Council for the sale of his team to Jim Balsillie, but the council turned
him away and voted to support the NHL's bid for the franchise. Balsillie wants to move the team to
Hamilton, Ontario. The NHL hopes to keep the team in Glendale.
Balsillie had announced in U.S. Bankruptcy Court last week that he would hand Glendale a $50
million check as compensation if he is allowed to relocate the Coyotes to Ontario. The bankruptcy
judge asked Glendale officials to evaluate the proposal.
Previously, Balsillie had offered the city $50 million minus a relocation fee due to the NHL and
operating costs while the team prepared to leave. Balsillie's new offer would exclude the potentially
multimillion-dollar relocation fee, amounting to much more for Glendale but far less than the city
owes on Jobing.com Arena.
The city has argued that the economic damage of losing the arena's anchor tenant could be as
much as $500 million.
Moyes said he had asked to be added to the council agenda but staff told him he was not
scheduled and could not speak.
Even if Balsillie is successful in buying the team, the Toronto Maple Leafs are expected to
object under a claim that Hamilton is in its market area. That claim could get the attention of the
Canadian Competition Bureau which said it might investigate if the Maple Leafs block the move.
The Competition Bureau has weighed in on the NHL's business practices in the past. Last year,
after it investigated Balsillie's failed bid to buy the Nashville Predators and move them to
Hamilton, the bureau issued a statement that declared its confidence that "the NHL's policies are
not anti-competitive."
The investigation concluded that the relocation of an NHL team, according to the NHL's
constitution, would require only a majority vote by the league's board of governors.
"The NHL would not permit any single team to exercise a veto to prevent a franchise from
entering into Southern Ontario," the statement read.
However, in response to the NHL's assertions that relocation requires a majority vote by the
league's board of governors, Maple Leaf Sports and Entertainment sent a letter dated Nov. 29,
2006, to NHL commissioner Gary Bettman claiming that the team holds a de facto veto. That letter
was filed by Balsillie's lawyers with the court.
"The Toronto Maple Leafs do not agree that the relocation of a club into their home territory
would be subject to a majority vote. They continue to believe a unanimous vote would be required,"
the letter said. "The Maple Leafs ... reserve all rights to take whatever actions are necessary to
protect their exclusive rights to their home territory."
BALSILLIE OFFERS TO PLAY 2009 SEASON IN GLENDALE
September 24, 2009
Copyright 2009 MediaVentures
Phoenix, Ariz. - The Phoenix Coyotes' Canadian suitor, Jim Balsillie, has told a bankruptcy
judge that if he is allowed to acquire the team, it will play most, if not all, of its 2009-10 season in
Glendale. One of Balsillie's lawyers suggested, however, that the team could move to Hamilton,
Ontario as soon as February.
Balsillie also agreed to delay the closing on the sale to as late as June 30 and, if another buyer
matches or exceeds his $140 million bid and agrees to keep the team in Glendale, he will step
aside. The new buyer would also have to pay financing costs for the 2009 season.
Another modification of the bid concerned the $50 million Balsillie has offered to Glendale to
break the lease at Jobing.com Arena. Balsillie is willing to pay $25 million up front and not ask for
a refund if the court later decides to allow someone else to buy the team.
Lastly, Balsillie offered to post a bond sufficient to pay all of the creditors. But Balsillie still
wants the NHL to pay for the team's losses (more than $60 million last season) if it stays in
Glendale for one more season.
Balsillie's offer was made in an emergency hearing to hear arguments about whether Judge
Baum should force Coyotes owner Jerry Moyes, Balsillie, the NHL and the city of Glendale into
mediation.
Judge Baum seemed impressed by the first two new terms, telling one of the NHL's lawyers:
"To an old bankruptcy judge, $25 million in cash no matter what happens seems like a big
change." As for the third term of posting a bond, the judge said that was required under
bankruptcy law anyway. The judge also suggested that he believed mediation would do no good as
the city and league have hardened positions.
JUDGE REJECTS ALL BIDS FOR COYOTES
October 1, 2009
Copyright 2009 MediaVentures
Phoenix, Ariz. - Both bids for the NHL Coyotes have been rejected by a bankruptcy court judge
in Phoenix meaning the team will play its upcoming season at the Jobing.com Arena in suburban
Glendale.
In his ruling, the judge left the door open for the NHL to alter its proposal so that the team
could be sold to a private buyer, but Jim Balsillie, who hoped to buy the team and move it to
Hamilton, Ontario, was shown the door. Balsillie had offered the higher bid along with a promise of
$50 million to Glendale for breaking the arena lease.
The court sidestepped BalsillieÕs argument that the NHL was blocking competition by
attempting to keep the Coyotes out of territory that allegedly belongs to the Toronto Maple Leafs.
Team owner Jerry Moyes, who sought the sale to Balsillie, has filed an antitrust case against the
league. Because that suit is pending, the judge ruled the issue had not been fully litigated and he
could not allow relocation without harming the NHLÕs interests.
"This conclusion effectively is the end for the efforts for . . . Balsillie, Moyes and the Coyotes to
force a sale and relocation of the hockey team based upon the claimed powers in (the Bankruptcy
Code)," the judgeÕs ruling said. Balsillie says he will not appeal.
The ruling is a solid win for the NHL and other sports leagues which were concerned that their
efforts to control the location and ownership of member teams could be threatened.
The judge rejected the leagueÕs bid because it did not provide payment to all creditors -
specifically Moyes and former coach and minority owner Wayne Gretzky.
"It would be inherently unjust for this court to deprive them (Moyes and Gretzky) of their
possible rightful share of any proceeds without first providing all involved a fair trial on their
claims," the judge wrote.
NHL deputy commissioner Bill Daly said the league will consider how to change its offer to
satisfy the courtÕs concerns.
"It remains our goal to secure the long-term stability of the Coyotes in Glendale," he said.
Moyes put the club into Chapter 11 protection on May 5, largely at the behest of Balsillie's
lawyers, who convinced him to pursue the legal strategy of using the bankruptcy court to sell the
club.
October 22, 2009
Copyright 2009 MediaVentures
Glendale has spent $2.1 million on outside consultants to keep the Phoenix Coyotes in the
Valley, public records show. In the past year, the National Hockey League team's hometown used
the money on two legal firms, three sports-business experts and a media spokesman, trying to
protect the city's investment in Jobing.com Arena, which the city built. Glendale officials say the
high cost of top advisers was necessary to avoid the larger financial setback of losing the team. The
Coyotes filed for bankruptcy in May, and a buyer wanted to move the team to Canada. The city told
a Bankruptcy Court judge it could lose $500 million if the team left.
NHL TO ACQUIRE COYOTES
October 29, 2009
Copyright 2009 MediaVentures
Glendale, Ariz. - The battle between the NHL and Coyotes owner Jerry Moyes appears to be
headed for resolution with the league buying the franchise. The move is expected to save the team
from further bankruptcy proceedings. The court must approve the sale.
Once it becomes the owner, which could happen as soon as Monday, the leagues is expected to
sell the team to a new owner who will pledge to keep the Coyotes at Jobing.com Arena. That sale is
not expected to happen immediately.
The league has been covering the Coyotes' operating losses since last fall but will get to pay
itself back out of its $140 million bid to buy the team.
That means the amount of money from the sale available to pay off other creditors is being
chipped away as the team's losses and the league's interim funding continue to mount.
The league expects to inject an additional $2.6 million into the franchise by this week to meet
payroll.
By the end of next week, nearly $2 million more will be needed, which pushed all sides to make
a deal.
The CoyotesÕ future has been uncertain since last month, when Judge Redfield T. Baum
rejected the two competing bids for the team, from BlackBerry co-CEO Jim Balsillie and the NHL.
Balsillie had offered $212.5 million to buy and move the team to Canada. Baum rejected that
offer because the NHL objected to Balsillie as an owner and had not signed off on relocation.
Baum invited the NHL to tweak its $140 million offer, which he rejected because it
discriminated against creditors, paying everyone except Moyes and minority owner and former
coach Wayne Gretzky.
Under the NHL offer, the league would use as much as $11.5 million to purchase 100 percent
of the claims of contractors at Jobing.com Arena, as well as to pay debts owed to Glendale, which
built the hockey arena.
The remaining $128.5 million would go into the Coyotes estate, paying $79.7 million to SOF
Investment, the largest secured creditor, and about $37 million to the league to repay its temporary
financing of the team.
Once attorneys' and administrative fees are paid, it's likely that less than $10 million would be
available to pay the two remaining creditors: Moyes, whose claim sits at $104 million, and Gretzky,
whose claim attorneys pegged at $9.3 million.
Without naming names, Deputy NHL Commissioner Bill Daly said there are people who have
expressed interest in the club. The league has said it will look for a local buyer at least through this
season. Glendale also has an interest in the team staying. It is counting on the Coyotes to continue
their 30-year lease on the publicly financed arena.
NHL SEEKS FLEXIBILITY ON GLENDALE LEASE
November 19, 2009
Copyright 2009 MediaVentures
Glendale, Ariz. - The soon-to-be new owner of the Phoenix Coyotes, the NHL, will soon sit
down with the City of Glendale to ask for help in finding a new local owner for the team. Those
talks are expected to explore the cityÕs position on the Jobing.com Arena lease.
Deputy Commissioner Bill Daly said the meeting is about how to move forward. It is not to open
talks on re-working the team's 30-year lease at the city-owned arena, although the NHL has said
all along that the lease will need to be re-worked.
Daly called Glendale "allies" who are receptive to changes that don't hinder its ability to pay off
the $182 million it poured into the arena.
Daly played down the NHL's Dec. 31 deadline to give exclusive priority to local buyers.
The NHL had to weigh contingencies should a local buyer not be found and the team need to
relocate next season, he said.
Among the contingencies is an out clause that rolls around July 1.
"And again, we hope we never get to that point," Daly said.
NHL Commissioner Gary Bettman said he hopes to find local buyers by the end of the season.
Local buyers will get exclusive negotiating rights until the end of the year, but Bettman indicated
there could be flexibility if more time is needed to complete talks.
The NHL spent $140 million to purchase the Coyotes at auction after former owner Jerry Moyes
placed the team into bankruptcy.
A new owner is likely to seek a re-worked agreement with Glendale, which has a 30-year lease
for the team to play at Jobing.com Arena. Moyes said he lost more than $300 million during his eight-year ownership tenure. Glendale leaders have been open to talks, but maintained the city
would not forfeit revenue it uses to pay off its $182 million arena investment.
The commissioner said he did not expect the NHL would be the one to re-negotiate the lease.
Bettman said half a dozen potential buyers have come forward with interest in the Coyotes in
Glendale. As for the sparse crowds that have plagued the team so far this season, Bettman said the
sale to a permanent owner would turn that around.
