The end of Coyotes saga could be near

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This article was published 05/05/2011 (4338 days ago), so information in it may no longer be current.

If there is any truth to reports out of Phoenix Wednesday night, Tuesday could mark a very big day in Winnipeg’s ongoing pursuit of an NHL hockey team.

Maybe things finally fall apart for certain in Phoenix and Winnipeg gets the Coyotes. Or maybe a deal closes and the Coyotes stay right where they are — allowing the NHL to turn its attention to the Atlanta Thrashers and a potential relocation to our city.

It’s well documented True North Sports and Entertainment wants to buy an NHL franchise and they made an offer on the league-owned Coyotes last spring.

Those same Coyotes remain for sale with NHL commissioner Gary Bettman repeatedly stating he’d prefer to sell to a group that would keep the team in Phoenix. Unfortunately for Mr. Bettman, only Chicago businessman Matthew Hulsizer and his light-on-cash purchase agreement has been pushed to the table. Hulsizer has struggled to a close a deal and now the NHL finds itself needing resolution in the near future in order to begin schedule planning for next season.

The end, regardless of the outcome, appears to be near.

Details of the NHL’s new financing package to keep the Coyotes in Phoenix are beginning to leak out and the deal could be brought to City of Glendale council for a vote Tuesday.

Glendale councillor Joyce Clarke told the Arizona Republic council was updated in a closed-door session “I do think there’s time left on the clock,” said Clarke, offerning no details on the re-configured deal.

Councillor Phil Lieberman said there is a “possibility” council could vote on changes to the agreement next week.

Glendale would need to release details of the agreement on Friday in order to vote on it at next Tuesday’s regularly scheduled council session.

NHL deputy commissioner Bill Daly responded quickly to an email request for comment Wednesday night in three words.

“Nothing to say,” came Daly’s reply.

The league looked to have a deal in place earlier this year when Glendale and Hulsizer struck an arrangement that would have seen the city front the Chicago businessman $100 million of the $170-million purchase price.

That deal fell apart when the Goldwater Institute deemed it illegal and threatened to file suit under the terms of Arizona’s gift clause, which prevents government from subsidizing private business.

Winnipeg’s True North Sports and Entertainment has been waiting for the NHL to make a decision regarding the Coyotes and is poised to purchase the team and relocate it to Winnipeg.

Glendale pledged to pay Hulsizer $97 million in arena management fees over a five-year period — also seen to be illegal by Goldwater.

The new package could contain a $50 million bond issue from the city directed to Hulsizer’s purchase, according to a report in the Phoenix Business Journal. Hulsizer would increase his initial investment to just over $100 million from $70 million.

The NHL would drop its asking price by as much as $25 million but make up its giveback in deferred payments.

Both the NHL and Hulsizer have previously stated they would not alter their portion of the arrangement.

Goldwater attorney Nick Dranias says he’d be surprised if a new deal will be viewed as legal by his group.

“Well, the bottom line for us is that the money flowing from the city cannot be grossly disproportionate to the money flowing back. If the NHL provides seller financing by cutting its price substantially and/or spreading purchase payments over the term of the lease, if the city cuts its contribution substantially, if the management fee is reduced to cover primarily operating expenses that would otherwise be born by the city, and if Hulsizer guarantees revenue flows to the city backed by something more than a promise from a shell entity, then it is conceivable the deal could pass constitutional muster,” Dranias told the Free Press in an email. “I’m not holding my breath because if they had a deal that was constitutional, I think they would have shared it with us already.”

Meanwhile, owners of the Atlanta Thrashers watch the Coyotes transaction closely, knowing full well that True North could be the answer to its prayer of unloading the money-losing hockey team.

Two months ago, Thrashers co-owner Michael Gearon Jr. stated there was a sense of urgency for his group to find a buyer or investors to keep the team in Atlanta.

“We continue to have discussions with different prospective investors or buyers of the franchise,” Gearon told the Atlanta Journal-Constitution this week. “The comments I made in February generated some preliminary interest. I wish there was more. There are some people we are talking to, but nothing that is far enough along at this stage that it deserves further comment.”

Gearon said his partners would prefer to sell the Thrashers to a group willing to keep the team in Atlanta.

“As someone who has lived in this city my whole life, it’s important to me that we do everything we can to try to have our sports teams survive and prosper in this city. … I think this city of 5 1/2 million should prosper as a successful NHL city,” said Gearon. “But we need others in the community that are willing to come in and either invest alongside us or buy the franchise. I would be more than happy to stay in and roll over my equity and continue to participate as a minority partner.”

Gearon was asked if the Thrashers could leave.

“I’d hate to see it get to that point,” said Gearon.

gary.lawless@freepress.mb.ca