Glendale puts $25M into Phoenix Coyotes escrow account

Read this article, this kind of says what others have been saying if no buyer steps up the teams moves. There really isn't a lot of room for error. The city of Glendale had to show proof of funds to cover the teams losses or risk losing the team immediately.

Money earmarked for city services such as water and sewer now sit in an escrow account to cover the $25 million pledge that Glendale made to the National Hockey League to keep the Phoenix Coyotes in town next season.

The NHL demanded Glendale show its proof of funds by last Thursday or risk the team leaving Jobing.com Arena immediately. The NHL owns the team, which it purchased for $140 million out of U.S. Bankruptcy Court last fall. (Emphasis mine)

"The NHL had a buyer on the table willing to pay $170 million for the team," city spokeswoman Julie Frisoni said.

The buyer wanted to relocate the Coyotes to Canada next season, she said.Although Glendale planned to set up a special taxing district or some other funding mechanism to meet the $25 million obligation, the NHL's deadline made that impossible, city officials said.

So the city dipped into its enterprise-fund investment account, which pays for long-term costs not anticipated to come due for several years. The city's enterprise account totaled $415 million for the fiscal year ending in June, according to an annual report.

The money in the enterprise funds comes from fees paid by businesses and residents for public services such as trash, water and sewer, landfill and housing. The fund absorbs revenue shortfalls in enterprise departments such as water and sewer, repays debt for capital projects and covers the cost of regulatory requirements, according to the city.

Art Lynch, the city's former chief financial officer who now consults with the city, insisted this week that tapping into the enterprise fund is not using taxpayer dollars. Rather, it is a fee paid by residents and businesses who use city services.

The city transferred $25 million out of the enterprise account and into an account which the NHL can begin to draw upon in September, under the deal between the league and Glendale signed May 20.The city agreed to pay the NHL for "actual cash losses" for the team and the arena management that could start accruing in July.
[Read more]

Ice Edge breaks off talks to buy Coyotes

This is good news if you're hoping thast the Coyotes end up back in Winnipeg. The Coyotes have been a dismal failure in Phoenix and have lost a lot of money and should have never moved from Winnipeg in my opinion.

WINNIPEG — Ice Edge Holdings have walked away from the table in their bid to purchase the Phoenix Coyotes.

"Talks have broken off," Ice Edge chief operating office Daryl Jones told the Free Press late Monday night.

Glendale council meeting on Coyotes deal "We were adamant about needing exclusivity in these negotiations and they haven't provided it. I'm not totally surprised. We've been dealing with this for a while. We thought we had agreed to certain things and expected them in writing. That didn't materialize."

Ice Edge had been working with Glendale city council to draft a lease agreement that was amenable to both parties. Once a lease was agreed upon, Ice Edge had hoped to purchase the Coyotes from the NHL, who purchased the club out of bankruptcy last fall.

Glendale city council is still expected to vote on a request to satisfy a number of NHL demands, including one that would see the city put together a financial guarantee to cover any losses incurred by the Coyotes for the 2010-11 season if the NHL is forced to operate the team for a second season. [Winnipeg Free Press]

Coyotes saga paints a poor picture of league

This is a follow up story to the blog post that I posted earlier today. More of the unfolding drama. I do have to agree with the author of this tory this does make the NHL look a little silly. Also, there seems to be something to the story that David Thomson and Mark Chipman of True North Sports and Entertainment Ltd. are leading a group to move to the Coyotes back to Winnipeg.

And while espn.com reported the city and Ice Edge had agreed on a new lease agreement that would keep the team in the desert through next year, at least, the agreement on covering operating losses still needs to be debated by Glendale city council. Still, Winnipeg seems to be back on the back burner, for now. The Reinsdorf deal, meanwhile, was always a joke; it required the creation of a special taxation zone that would convey to the gracious saviour of the team approximately US$65-million over the next three years to put towards the purchase price, and another US$100-million over seven years to cover operating losses.

Not only that, but it included control of the arena, the right to leave after five years, and a guarantee that Reinsdorf would get US$103-million back in any sale of the team. It was not a credible business arrangement; it was a charity.


And that is where this league was going. In its final attempt to keep a team in a non-traditional market -- or at least, in the display of something resembling an attempt --the NHL seems to have been reduced to proposing municipal blackmail.

Thus the best-case scenario for the Coyotes to stay in the desert is that the business receives publicly funded indemnification against losses. If only the auto industry had been smart enough to write that into their deals with the state of Michigan. Then again, it worked for much of Wall Street.

So what does this tell the next canary in the NHL's overexpanded, misaligned coal mine? What does this tell to the owners and city councils entangled with teams like Atlanta, Nashville, Columbus, Florida -- located outside Miami -- or the New York Islanders, the last of whom are currently fighting for a new building that may never come?

What it says is that if you are a Jerry Moyes, the league will sell you down the river once the money runs out, and if you are a Glendale, you will be held hostage. Oh, and if you want to move a team into the Toronto area you're out of luck, because that's being saved for expansion. Hell of a way to do business. Step right up and own a team, folks.

But we Canadians won't care about how it looks; if Winnipeg is ever finally made whole, hockey-wise, the elation will steamroll any worries about precedent, or that the building is too small, or what happens should the loonie dip back to 65 cents U.S. And as long as Mr. Thomson and his partners agree to absorb any financial losses in private, then all that's fine. [Read the whole story]

Sources: Coyotes would stay in Phoenix

This story seems to be evolving and changing by the day, it was looking better yesterday. While today's turn of events does not appear to be good for the city of Winnipeg right now, this could change again if the city of Glendale doesn't agree to pay any and all operating losses for the Coyotes next season. - Stay tuned.

The City of Glendale and the Ice Edge Holdings group have agreed on all points on a new lease agreement that would keep the Phoenix Coyotes in Arizona, sources told ESPN.com Friday evening.

The two sides are expected to sign a letter of exclusivity by early Monday morning, which will formally end the bid of Chicago sports tycoon Jerry Reinsdorf, although sources told ESPN.com that the city has not considered the Reinsdorf bid viable for some time now.

Ice Edge will not, however, agree to have its new memorandum of understanding submitted to the City Council for a vote until Glendale agrees to a number of conditions outlined by the NHL, chief among them that the city will agree to pay any operating losses the Coyotes might incur next season if a deal to sell the team collapses.

Those requirements will be discussed by City Council at its public meeting Tuesday in Glendale.

Although it's possible the city could find itself on the hook for between $20 million and $30 million in operating losses if a deal with Ice Edge or any other potential buyer moving forward collapses, it's believed Glendale will agree to the league's conditions because the NHL will exercise its right to move the team without those assurances.

It's believed Winnipeg would be the prime target for relocation, sources have told ESPN.com, and that a deal to sell the team to interests in Winnipeg could be completed quickly if Glendale cannot satisfy the league's conditions. [ESPN.COM]

NHL to Winnipeg?

Winnipeg return intrigues commish

ANAHEIM, Calif. -- NHL commissioner Gary Bettman gave his strongest indication yet Monday that having a team return to Winnipeg could happen one day.

Bettman, in his state-of-the union address to the media before Game 1 of the Stanley Cup final, referred to an editorial in a Canadian newspaper he read this week which suggested that if the NHL did add another Canadian team it should go back to Winnipeg first because they have a new building and the NHL owes it to them.

"I'm not opining on whether or not that's an opinion that I agree with, but it is an interesting and intriguing thought," Bettman said in a comment that raised eyebrows.

While he stressed that there really hadn't been that much thought put into it at this point and that he had no plans for any current NHL teams to re-locate or for the league to expand, he does see the chance for Winnipeg to get a team back one day.

"When we had the chance to go back to Minnesota, we did. Because it made sense, the right ownership, the right building situation," said Bettman. "The market was strong and vibrant. We haven't studied Quebec City or Winnipeg or anywhere else in Canada, but the notion that if it could work to put a franchise back in a place where one was lost, feels good -- provided we don't wind up in a situation where we've created a prescription for another failing franchise.

"So am I intrigued? It's obviously something I've thought about in terms of trying to make right something that one point in our history went wrong."

The Jets left Winnipeg for Phoenix after the 1995-96 season. Bettman believes the salary cap and revenue sharing facets of the current collective bargaining agreement provides a chance for a market like Winnipeg to make a go of it.

But another team in Toronto? Bettman is not a fan of that idea, despite the fact there are three clubs in the New York/New Jersey area and two teams here in Southern California.

This would be one of those stories that are just too good to be true. But hey; who doesn’t like a good story. This would especially be good news for hockey fans in North Dakota that can still fondly remember the Jets of the 1990's. I am already hoping this story comes true some day. It would defiantly good news.

I know Sioux_7 and I would definitely go to a few of the games. We went to about four o them together back in the 1990’s during college. I can also remember when my father and taking to me to a few games on Boxing day, in fact I can remember seeing the North Stars play the Jets one December 26th back in the 1990's. I know its only speculation and there is a reason that the Winnipeg Jets left for the frozen prairie for the desert in Phoenix (not that they are doing that well in Phoenix either).

That being said that one of the reasons the Jets couldn't remain viable/competitive in Winnipeg was that they played in the old run down dumpy Winnipeg arena. That problem has been addressed and the new Winnipeg franchise would have a brand new MTS Center to play in