Winnipeg Free Press - PRINT EDITION

NHL plays waiting game with Hulsizer

  • Print

Despite the lack of a finalized sale of the Phoenix Coyotes, the NHL will not begin exploring relocation options following its Dec. 31 deadline.

The league entered an agreement last spring with the City of Glendale that saw the Phoenix suburb put up $25 million to cover losses while the league operated the team during the 2010-11 season.

Included in the deal was a deadline of Dec. 31 for a sale to a party willing to keep the team in Glendale.

The absence of such a deal would allow the league to begin pursuing sales to groups including those for relocation.

But on Wednesday, NHL deputy commissioner Bill Daly said the league would not exercise that option.

"Not at this point. We will still be committed to finalizing the Coyotes transaction," Daly said in an email to the Free Press.

It will be interesting to see how long the league is willing to wait. Glendale has made large financial promises and must now follow through in a timely fashion.

The NHL still has the prospect of selling the Coyotes to True North Sports and Entertainment should Glendale prove unable to meet its burden.

Glendale agreed earlier this month to a new lease agreement with Chicago businessman Matthew Hulsizer that would see the city pay Hulsizer $197 million over six years to keep the Coyotes in Glendale. Included in that arrangement is an upfront payment of $100 million to help Hulsizer finance the purchase of the team for $170 million from the NHL.

Bankruptcy

The league bought the Coyotes out of bankruptcy for $140 million in the summer of 2009 and has lost in the neighbourhood of $30 million while operating the team.

At the heart of Glendale's plan is the issue of a $125-million municipal bond to raise the cash they must give Hulsizer in order for him to buy the Coyotes.

Without the $100 million, Hulsizer either can't or won't buy the franchise.

It seems like a slam dunk and likely will come to fruition.

But Glendale deputy city manager Art Lynch raised the subject of a tipsy U.S. bond market during his presentation to city council on Dec. 14, suggesting the city wait out the market and enter at a more opportune moment.

That moment, however, doesn't appear to be coming any time soon.

The U.S. municipal bond market is on the precipice of a meltdown, according to CBS news magazine 60 Minutes.

Wall Street analyst Meredith Whitney told 60 Minutes she expects to see major upheaval in the muni bond market.

"There's not a doubt in my mind that you will see a spate of municipal bond defaults," said Whitney. "You could see 50 sizable defaults. Fifty to 100 sizeable defaults. More. This will amount to hundreds of billions of dollars' worth of defaults."

Lynch told Glendale council they would have to offer a high interest rate in order to make its bond attractive and that number could be climbing every day if the market remains unstable.

Bloomberg is predicting the next quarter to be the worst for municipal bonds since 1994. Not the best time to be entering such a market, but time is a luxury Glendale doesn't have.

They need to come up with their $100 million in the next month at the outside.

Glendale has been squeezed every which way on this deal.

First by the NHL, then by Matthew Hulsizer and now it's likely by a turbulent U.S. market.

One has to wonder how much juice they have left to give.

gary.lawless@freepress.mb.ca

Republished from the Winnipeg Free Press print edition December 30, 2010 C1

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

RMTC preview of Good People

View more like this

Photo Store Gallery

  • PHIL.HOSSACK@FREEPRESS.MB.CA Winnipeg Free Press 090528 STAND UP...(Weather) One to oversee the pecking order, a pack of pelican's fishes the eddies under the Red River control structure at Lockport Thursday morning......
  • Marc Gallant / Winnipeg Free Press. Local- WINTER FILE. Snowboarder at Stony Mountain Ski Hill. November 14, 2006.

View More Gallery Photos

About Gary Lawless

Gary Lawless is the Free Press sports columnist and co-host of the Hustler and Lawless show on TSN 1290 Winnipeg and www.winnipegfreepress.com
Lawless began covering sports as a rookie reporter at The Chronicle-Journal in Thunder Bay after graduating from journalism school at Durham College in Ontario.
After a Grey Cup winning stint with the Toronto Argonauts in the communications department, Lawless returned to Thunder Bay as sports editor.
In 1999 he joined the Free Press and after working on the night sports desk moved back into the field where he covered pro hockey, baseball and football beats prior to being named columnist.

Poll

Do you think the Raptors can come back and beat the Nets in their playoff series?

View Results

Ads by Google