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Clock's ticking on Coyotes

We'll soon know the NHL's intent: stay in Arizona or relocate?

Hey there, time traveller!
This article was published 11/5/2010 (2658 days ago), so information in it may no longer be current.

The NHL's real intent, whether it be to keep the Phoenix Coyotes right where they are or to relocate the franchise, needs to become clear in the coming days.

One thing is certain: The NHL will not continue to prop up the Coyotes for another season and time is now crucial.

Glendale city council voted 7-0 on Tuesday night to give its city manager the authority to attempt to satisfy a list of demands set forth by the NHL, chief among them a guarantee to cover any losses incurred by the league should they be forced to operate the club, in order to keep the team in Phoenix for at least one more season.

That decision, however, does not bind the NHL to keep the franchise in Phoenix nor does it guarantee the city manager will be able to meet the NHL's requirements.

NHL executive vice-president Bill Daly addressed Glendale city council on Tuesday night in an attempt to assure councillors it was unlikely the league would ever come calling to collect on its insurance policy.

"We have every expectation of selling the club in the coming weeks and closing a deal by the fall. The insurance policy we are asking for is likely a hypothetical situation," said Daly.

The NHL, despite Tuesday night's vote, still has a decision to make.

Mounting losses

In essence, there are two ways for the NHL to avoid mounting losses in Phoenix: Have the city of Glendale cover them or move the team to another market such as Winnipeg.

NHL commissioner Gary Bettman says the league continues to work to keep the franchise but also has an eye on Winnipeg.

"Over the years, we've had an interest expressed in Winnipeg and I think that's great," he told Hockey Night in Canada. "But, we're not going to address that interest by taking away a franchise from another club. If we can fix it in Phoenix, great, which is what we've been trying to do for the last year.

"And if we can't fix it, we will look at our options and obviously Winnipeg is one of them," said Bettman.

"If we have to move a franchise -- if we have to move the Coyotes, there's an equitable fairness point to be made, if the team has to go somewhere, certainly, the place it came from should be given strong consideration."

But the leverage provided by a relocation deal to Winnipeg is rapidly evaporating.

Mark Chipman and his True North Sports and Entertainment team cannot, and will not wait in the wings indefinitely in order to provide the NHL a convenient out.

In order to plan for the 2010-11 season, True North needs to know soon -- it's a matter of days not weeks -- whether they'll be playing in the NHL or AHL. Tickets need to be sold and players need to be signed and which league True North is a member of plays a major role in both those endeavours.

Does the NHL want to remain in Phoenix? Most likely. But not to the tune of another US$30 million.

The NHL is bound by the bankruptcy agreement set down by Judge Redfield T. Baum last fall to make "best efforts" to keep the team in Phoenix and they appear to have satisfied that requirement by attempting to work with two viable potential ownership groups that have so far been unable to come to terms with the city of Glendale.

The next move will be the NHL's. It's quite possible the league is loathe to leave Phoenix and let the first domino fall in what could be a landslide of franchise relocations.

If the NHL moves the Coyotes, other troubled clubs such as Nashville and Atlanta could be next in line and franchise movement can be perceived as league instability and that can effect franchise value.

Bettman has one job above all and that is to maintain the investment league owners have in their clubs.

For Bettman, leaving Phoenix is not only an admission of an error in putting the team there in the first place, it could also shake loose his footing in the league's boardroom which to this point has been rock solid.


If the NHL can get financial insurance, secured and backed by the City of Glendale, remaining in Arizona for one more year while trying to find a suitable owner to keep the team is not a terrible option for the league.

The yes vote by Glendale council authorizes city manager Ed Beasley to try and satisfy the NHL. Beasley must now make attempts to secure the financial mechanisms (a bank note or line of credit) to meet the NHL's demand that Glendale be on the hook for any future Coyotes losses.

Only a certified financial agreement will satisfy the NHL. Glendale must make a contract with a financial institution to cover these losses that have been estimated in the $30-million range.

However, Beasley will not have much time to satisfy those demands and he's already failed on at least one attempt to negotiate on these matters with the league.

Beasley reportedly asked the league to guarantee that Phoenix would participate in league revenue sharing regardless of meeting the criteria set forth in the NHL's collective bargaining agreement.

The NHL turned down this proposal.

Should Glendale be unable to hammer out a deal, the NHL could then choose to relocate the team and Winnipeg is at the top of the list of potential markets.

True North is poised to accept the franchise and to that end has done most of the heavy lifting on a possible deal.

True North's Manitoba Moose have already committed to the AHL for next season but commissioner Dave Andrews, who in effect works for the NHL, has surely been instructed to play ball on this issue.

Without a deal in Glendale, the NHL appears likely to sell the Coyotes to the True North group, which includes Winnipeg's Chipman family and billionaire Toronto businessman David Thomson.

The decision may seem straightforward to Winnipeggers but the NHL's true desire will become clear in the endgame over the next few days.



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