A prospective buyer of the Phoenix Coyotes, widely believed to be Chicago businessman Matthew Hulsizer, has placed $25 million in an escrow account according to the City of Glendale.
Hulsizer has been in negotiations with Glendale for some time attempting to secure a lease for Jobing.com Arena.
Once Hulsizer has secured a lease he would then begin working out a deal with the National Hockey League to buy the money-losing franchise.
Glendale issued a statement on Friday regarding monies placed in an escrow account that suggests a prospective buyer has relieved them of their $25-million obligation to cover losses incurred by the Coyotes this season.
"As the City and the prospective buyer work toward finalizing documents, in a show of good faith, the prospective buyer has deposited $25 million dollars into escrow. This shows the City has met the NHL deadline for finding a qualified buyer, who will keep the team here, a requirement to release the City's $25 million currently in escrow," reads the release.
Several sources, however, are disputing that claim, saying Hulsizer's money is to be used against any future purchase of the team and that the cash is in essence a show of good faith and is meant to relieve any concerns about his financial ability to close this deal.
To suggest Hulsizer is willing to have his money used to pay for losses suffered by the Coyotes prior to the close of a transaction is incorrect, say sources surrounding the deal.
The money will remain in escrow while negotiations continue and is refundable should Hulsizer not buy the Coyotes. The money is not to be used by Glendale to make up losses they are on the hook for as per their agreement with the NHL.
The NHL reached an agreement with Glendale this spring where the city put forth $25 million to insure the league would not suffer any more losses while operating the team they purchased out of bankruptcy.
The NHL told Glendale at the time, if they did not produce the $25 million they Coyotes would be sold to a buyer for relocation. NHL commissioner Gary Bettman identified that buyer as True North Sports and Entertainment, owners of the MTS Centre and the Manitoba Moose.
Bettman also informed Glendale that should they not find a buyer willing to keep the Coyotes in Phoenix, he would sell them for relocation.
NHL deputy commissioner Bill Daly did not immediately respond to emails on the issue.
City of Glendale communications director Julie Frisoni told the Free Press on Friday, "the city stands by the statement and the statement speaks for itself."