from David Shoalts of the Globe and Mail,

George Gosbee, Anthony LeBlanc and their group of Canadian investors are losing control of the Arizona Coyotes because they cannot afford to keep up the payments on the NHL franchise’s enormous debt.

Gosbee and company can be seen as either plucky entrepreneurs who became victims of their own success or just the latest under-financed group of owners to see their house of cards collapse. In any event, with the proposed sale of a majority share of IceArizona, the Delaware company that owns the franchise, the Canadians will lose control of the team a little more than a year after buying it from the NHL.

This is a tale rich in irony, since there was relief in sight for Gosbee, LeBlanc and company from NHL commissioner Gary Bettman in the form of the league’s new credit facility of $2-billion (all U.S. dollar figures) at attractive interest rates of about 3 per cent. But grabbing that lifeline, which represents an annual savings of more than $10-million in interest payments, would have subjected the Canadians to a collective tax bill of about $20-million from the Canada Revenue Agency, something else they could not afford.

If the sale of about 55 per cent of IceArizona to Philadelphia hedge fund manager Andrew Barroway closes (i.e., if he raises the necessary cash), then the Coyotes will get under the low-interest security blanket of the NHL’s credit line.

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