By: Andy Holloway
Whether the Phoenix Coyotes are headed north probably won’t be known for at least a month, but that hasn’t stopped the players in this little NHL drama from stirring things up. Here’s a quick primer on who’s playing what position as a complement to Canadian Business’s first Issues podcast.
Jim Balsillie is an Ontario-born-and-raised hockey fanatic who apparently helps run Research In Motion when he’s not trying to land an NHL team. He’s unsuccessfully tried to buy the Pittsburgh Penguins and Nashville Predators, and is now trying to land the Phoenix Coyotes for US$212.5 million, but only if he can move them to Hamilton.
Jerry Moyes is the owner of Swift Transportation, one of the largest trucking companies in the United States, and the lead owner of the Coyotes. His ownership group has pumped US$300 million into the team, which has been a consistent money loser. The team has lost $73 million in the last three years alone, according to court documents.
Jerry Reinsdorf is the owner of the Chicago White Sox and Chicago Bulls and he has put together an offer for the Coyotes with the NHL’s blessing. Details of that bid have been sealed for the moment, but it’s expected to be about US$100 million less than Balsillie’s offer. Reinsdorf would keep the Coyotes where they are.
John Breslow is a Las Vegas businessman who made a fortune in welding and owns 3% of the Coyotes. He has also put together a deal for the team that would keep it in Phoenix. Breslow was shopping the Coyotes around earlier this year to no avail.
The NHL is against Balsillie’s proposed purchase, not because it doesn’t like the idea of either him or Hamilton joining the league’s fraternity (as some Canadian nationalists like to point out), but because he is going about it the wrong way. The NHL believes it controls the Coyotes because it acquired that right in a proxy agreement when it advanced Moyes money in November to keep the team afloat. Moyes counters that he only gave up voting rights, not actual control.
Redfield T. Baum is the U.S. bankruptcy judge presiding over the Coyotes filing. On May 19, he ordered the NHL and Moyes to mediation on the topic of who actually owns the team and report back May 27. Baum also gave the two sides until June 22 to come up arguments as to whether the team can be moved.
The city of Glendale originally said it would take US$500 million to break the Coyotes’ lease, but it’s now seeking injunctive relief, which means it believes a financial settlement would not make up for what the area would lose if the team moves. Some believe the lease could be broken for as little as US$5 million, while others think it could stand up because cities are better at writing such leases these days.
The city of Hamilton would have to convince the provincial and federal governments to kick in about $120 million to complete long-term upgrades to Copps Coliseum, which would be the Coyotes’ new home if Balsillie wins. The RIM exec has said he will fund the first round of upgrades to make Copps ready for the NHL, which would cost him about $30 million.
Maple Leaf Sports & Entertainment (owner of the Toronto Maple Leafs) has been mostly silent on the possibility of the Coyotes moving, but don’t expect it to stay that way. The distance between Copps and the Air Canada Centre is 41 miles, putting the proposed newcomers within the Maple Leafs’ 50-mile territory. It is estimated MLSE could lose $20 million per year in television revenue, plus potential losses in corporate and fan support.
Charles Schumer and Kirsten Gillibrand are two New York senators opposed to Balsillie’s plan because it would have a crippling effect on the Buffalo Sabres, which gets 20%—or about US$15 million—of its revenue from southern Ontario.
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