by PuckStopsHere on 10/27/09 at 06:08 PM ET
Bankrupt Phoenix Coyote owner Jerry Moyes has agreed to sell his team to the NHL. This is after the Phoenix market has been basically destroyed due to a summer of litigation and bankruptcy. Moyes would accept the NHL‘s $140 million offer. This offer would pay nearly $80 million to SOF Investment (the Coyotes largest secured creditor - who had provided the team with a line of credit). It would pay the NHL back $37 million for funding the team since last fall (that‘s right some of the money in the $140 quote paid by the NHL is paid to the NHL). It pays about $13 million to other Coyote creditors. This leaves about $10 million for Moyes (and possibly Wayne Gretzky who has a $22.5 million claim in the bankruptcy case).
Basically, this offer has Moyes losing his shirt. He accepted it because the NHL would continue to deduct the operating costs of running the team from their offer, if it ran into the future. Jerry Moyes had no other options. Wayne Gretzky has not agreed to this offer.
Because the Phoenix Coyotes are in bankruptcy, the Judge Redfield T Baum, the judge overseeing the case must approve the sale. It is not clear that this will happen. He already turned down a similar offer from the NHL in the failed auction of the team. He claimed that the NHL cannot pick and chose which creditors get paid and which do not. It appears nothing has changed with this agreement - except that Moyes removes his objection.
If this sale passed, it would not solve the Phoenix Coyotes plight. The NHL would attempt to sell the team as soon as a buyer could be found. They could sell the team to their chosen buyer (i.e. not Jim Balsillie) - assuming they have a chosen buyer. They claim that they would like to sell to somebody who will keep the team in Arizona, but it is not clear that anyone exists who fits that description. Phoenix would remain in limbo until such an owner was found or until other pressures forced the NHL to approve the relocation or contraction of the franchise.
This potential sale does not end the problems in Phoenix. It might get worse under prolonged NHL ownership as the team might be forced to keep a minimum payroll. These prolonged financial problems in Phoenix are not getting better and the strong southern Ontario market remains available for another team. This remains a blight on the NHL.
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