by PuckStopsHere on 12/14/09 at 01:51 PM ET
After a summer spent in bankruptcy, the Phoenix Coyotes may finally have new owners. The NHL bought the team out of bankruptcy, but that solved little. The NHL was still committed to keeping the money losing team in Phoenix, where the market has been destroyed. The NHL was committed to finding an owner who would buy the team and keep them in Phoenix despite a bleak future economically. Perhaps that owner has been found.
Ice Edge Holdings LLC has signed a letter of intent to buy the Phoenix Coyotes. The purchase price is believed to be around $150 million (the NHL paid $140 million to buy the team from bankruptcy). Ice Edge Holdings is a group of five owners that have been fronted in the media by Anthony LeBlanc, who is a former executive at Research In Motion (Jim Balsillie’s company). There are questions regarding this group’s finances. It isn’t clear that they have the money to keep this struggling team afloat.
This group plans to host a few games a year in another market (most likely Saskatoon, Saskatchewan) while playing the majority of the schedule in Phoenix. The Saskatoon games could be a big money maker. Popular Canadian teams would draw well in the limited number of games available. These games would be a money maker, while the games in Phoenix would be an almost certain money loser.
The Ice Edge group claims that they are willing to accept the lease that the Coyotes have with the Jobing.com Arena in Glendale, Arizona. That lease has 26 years remaining on it. That is a ridiculously long lease to have ever been agreed to in the first place. It seems like a significant problem for the Phoenix Coyotes. There is little short term hope for financial success if they remain based in Glendale, Arizona and there is reason to doubt that long term success is possible either. Committing to 26 more years in that situation seems completely unreasonable. It seems more likely that this is a backdoor attempt to move the team once the success of the Saskatoon (or elsewhere games) are clearly contrasted with the Phoenix failure.
The purchase agreement, as it has been described in the media, does not seem like a solution to the NHL’s problems. The Coyotes remain in a struggling market. A new group of likely underfunded owners will cover their losses for a while, until they run into financial problems. The team appears to be very strongly committed to a failing market and an arena far enough out of town in suburbs that it prevents some fans from attending games. The team is also looking to try out new markets with a handful of games. It is expected that those market’s games will be far more successful economically than the Phoenix games, which makes it seem quite likely that the days in Phoenix will be numbered (despite a ridiculously long arena lease that says otherwise). It is hard to accept the idea that we have all of the information to understand this potential sale. If we do, it is almost certain that the Phoenix problems have not come close to conclusion.
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