Hard Times

hardtimes

The Coyotes have won a court ruling that will force the NHL to prove they have an actual offer for Jerry Reinsdorf in place.  If they don’t, this could get really messy and open the door for other teams to follow suit. And if they don’t Mr. Bettman’s reputation will take a massive hit. While it isn’t clear if the NHL will be able to produce this offer, it is becoming more clear that some of the members of the NHL Owners Club are in more trouble than many of us have been lead to believe.

Here is a story from the Toronto Star that says things could be bleak in many places, starting with Tom Hicks and the Dallas Stars:

While the Phoenix Coyotes turned up the heat on the NHL yesterday, the owner of the Dallas Stars appears to be laying enough kindling and timber to start another bankruptcy bonfire. The Coyotes won a court ruling that will force the NHL to tell all it knows about White Sox owner Jerry Reinsdorf’s mysterious bid to purchase the Coyotes to a Phoenix bankruptcy court judge. The NHL must produce all documents related to Reinsdorf’s bid today, ruled judge Redfield Baum.

The league has said it was close to announcing Reinsdorf as a white knight who would keep the team in Glendale, Ariz., when Jerry Moyes thrust the Coyotes into bankruptcy. The Moyes camp wants to see how good the offer was.

“The purpose of the production is to examine the content of those discussions and the potential offer outstanding by Mr. Reinsdorf related to these purported interests,” read the motion filed by Moyes lawyer Thomas Salerno.

Canadian billionaire Jim Balsillie has made a $212.5 million (all figures U.S.) offer to purchase the Coyotes and move them to Hamilton as part of the franchise’s bankruptcy proceedings that are being challenged by the NHL.

But Phoenix is only one of the many franchises in trouble during the recession.

Tom Hicks, who owns the Dallas Stars and baseball’s Texas Rangers, defaulted a month ago on $525 million in loans tied to the teams, starting the clock ticking in a showdown with lenders that could see the Stars end up in bankruptcy proceedings in October.

At the time, Hicks said he was trying to work out a new deal with his creditors, and perhaps bring in new investors, but has been mum on the situation since. Dallas Stars president Jeff Cogen referred calls to a public relations firm, which said there was “nothing” to report.

NHL deputy commissioner Bill Daly did not respond to an email. A group of 40 financial institutions and other investors hold the debt in Hicks Sports Group, which owns the two teams. It would take 180 days for lenders to foreclose on defaulted loans, according the standard deals involving the NHL.

That gives Hicks another five months to find alternate financing, but lenders are tight with their money these days, and those who follow sports financing closely worry it’s inevitable that the Stars will follow the Coyotes into bankruptcy. “He’s heading in the same direction,” said a broker specializing in sports financing, who didn’t want his name used because of his dealings with the NHL.

“It could be the second team in Chapter 11,” said Andrew Zimbalist, an economics professor at Smith College, who specializes in sports business. “When Hicks put himself in that circumstance, he’s creating a lot of difficulty for himself. He’s going to squirm a little bit. Whatever leverage he had, he loses some of it.

“You go to your creditors and try to re-organize your loans,” added Zimbalist. “(If) they say no deal, you can declare bankruptcy or sell the franchise or go to other banks and borrow more money.”

Hicks also co-owns Liverpool, a soccer team in England’s Premier League, another franchise looking for new ownership. His holdings in Liverpool – shared with Montreal Canadiens owner George Gillett –are outside Hicks Sports Group. None involved believe the Stars are in danger of moving. Dallas is believed to be a strong market with the team able to turn a profit, especially if it makes the playoffs.

It’s been a bad year for bankruptcies and the NHL. William (Boots) Del Biaggio faces jail time after having been found guilty of fraud for the way he helped finance his minority purchase of the Nashville Predators. Meanwhile, the Atlanta Thrashers owners are fighting with each other, Tampa is looking for new investors and the New York Islanders are hinting at leaving unless they get a new arena. “There could be other (bankrupt) teams down the road,” said Zimbalist. “There are a lot of teams – as it were – skating on thin ice.”

It will most certainly be the summer of change for the Edmonton Oilers, with a new coach coming, some trades and one or two possible UFA signings. It might be more interesting off the ice, to see how Gary Bettman puts out all of these fires. ould the financially stable Oilers benefit from this situation and pillage and pilfer players from financially strapped teams?  Will the NHL be forced to contract some teams in the next few years? Is relocation back to Canada inevitable?

It is a lock that there will be another Canadian team in the NHL within two years, and maybe we’ll even return to having eight teams some day. I think contraction is unlikely and that the NHL will try attempt to relocate teams to Kansas City, Seattle and Canadian markets before actual contraction would occur.

I don’t see the Oilers being able to pilfer just yet, but I could see it being a realistic option in the future. Especially when the new rink is built, because the team will generate more money with more suites and a capacity of around 18,000 which would be more than 1,000 more than they have now at Rexall. In any scenario you personally would chose, the days of NHL teams continually outbidding one another for high priced talent could be numbered in many markets.

  • scorcoff hemmercules

    Feels good to be a fan of a team in a great hockey market with an owner with bottomless pockets. I can't imagine being a die hard fan/ticket holder and have my team moved away forever. Not that most people down south even care about hockey, didn't Phoenix have some rally and less than 100 people showed up?? Weak, move that team.

    @ BUCK75

    #99 knows he won't find another job coaching in the nhl if the yotes move, I think thats what he's worried about.

  • ChiliChunk

    @ scorcoff hemmercules:

    I really doubt 99 is too worried about his coaching career. I think it is partially just a PR move to have him behind the bench in the first place. If the yotes move he could probably call up every team in the league and say 'I want to be in your management team' and he would have 30 job offers to choose from (well maybe Calgary declines so 29 offers…)

  • scorcoff hemmercules

    @ ChiliChunk:

    Haha, that was more of a crack at Wayne than anything, I don't think he's a great coach. I'm pretty sure he doesn't want to move anywhere and would like to keep coaching so the yotes in phoenix is really his only option right now.

    "If the yotes move he could probably call up every team in the league and say ‘I want to be in your management team’ and he would have 30 job offers to choose from (well maybe Calgary declines so 29 offers…)"

    I doubt that, maybe a few job offers but not anywhere close to 30. What has #99 really done from a coaching/management standpoint in the nhl that warrants him getting hired anywhere he wants???

  • @ ChiliChunk:
    @ scorcoff hemmercules:

    I agree that he hasn't really done anything to warrant another management/coaching job. I would assume the only reason he even bought a piece of the team would be because he was asked by the commish? He had no ties to the team before that, why would he choose PHX?

    I don't know many people who own 1% of a company that are entitled to 14% of profits & have any say on the direction of an organization.

  • BigE57

    What's the point of being entitled to 14% of the profits when the team bleeds money? I'm no economist but 14% of nothing is still nothing and as a shareholder would he not be reposnsible if there were a cash call by the team? Wayne should get out of the coaching business and get back to being a true ambassador for hockey…….

  • ChiliChunk

    scorcoff hemmercules wrote:

    What has #99 really done from a coaching/management standpoint in the nhl that warrants him getting hired anywhere he wants???

    Yeah I don't really disagree with you. But lots of players move directly into management at the NHL level due to their overall knowledge and playing experience alone much less having the Team Canada experience he's got. And he's the Great One!!

    I'm not saying anyone would offer him another coaching gig but some sort of management thing for sure. Maybe I overestimated the interest but I think he would find something pretty easy if he wanted to.

    And when I say 'management' I'm not saying GM. I'm thinking more of a consultant role like Senior Executive Co-Director of Hockey Stuff or something.

  • UPDATE…

    It looks like the Star got ahead of itself. While Moyes did file a request that the NHL prove that their was indeed other legitimate offers, the court has yet to rule on it.

    Craig Harris from the Arizona Republic called me, while one of the NATION readers, Ryan, emailed me to say that the Star jumped the gun.

    The court will rule on this NEXT Tuesday…Here is a quote from Harris' article…

    "A hearing on the demands is set for 1:30 p.m. Tuesday in downtown Phoenix. , That's the same day Baum is scheduled to hear who controls the team -the key point in whether the bankruptcy case will continue."

    Here is the link…
    http://www.azcentral.com/sports/coyotes/articles/2009/05/12/20090512coyotesreinsdorf0513.html

  • Subversive

    What difference does a new rink in Edmonton make for whether or not they can 'pilfer'? They already spend to the cap, having more money just means they make more profit, but does nothing to allow them to 'pilfer'.

  • Subversive wrote:

    What difference does a new rink in Edmonton make for whether or not they can ‘pilfer’? They already spend to the cap, having more money just means they make more profit, but does nothing to allow them to ‘pilfer’.

    It means that teams that can't spend to the cap and need to rid themselves of salary might have to do so, and get less than fair market value in return for a specific player.

    Many teams might not be willing to go near the cap, and when the new rink comes in that should give the Oilers more revenue, thus giving them the ability to continue to spend to the cap.

  • The Menace

    Subversive wrote:

    What difference does a new rink in Edmonton make for whether or not they can ‘pilfer’? They already spend to the cap, having more money just means they make more profit, but does nothing to allow them to ‘pilfer’.

    coaches dont' count against the cap – we can hire more coaches!

  • @ Jack Bauer:

    I misunderstood an article in the Toronto Star on May 12th saying that the Reinsdorf offer was reportedly around $130mm. They haven't released the price – just rumours of what the price might be.

    After reading more articles it appears that there is no new news today.

  • BigE57

    @ Jason Gregor:
    I'm wondering, if this Phoenix thing gets drawn out, cause that never happens in the legal system especially south of the border, what are the chances that the Coyotes don't ice a team next season, will the NHL pump money into the team to keep them afloat for an entire season? Seems like that would be setting a bad precedent considering there are other teams on a slippery slope. We all saw how much MLB liked carrying the Expos and everyone knows how that turned out.

  • Jack Bauer

    @ BigE57:

    Can you imagine the final days of the Expos. You walk into Olympic stadium, dodge a few ceiling shingles, get introduced to the players because theres more of you than there are of them.

    Amazing

  • HollaHollaHo'sFoADolla

    Harlie wrote:

    F YEAH THE CANES DO IT AGAIN!!!

    Aaron Ward didn't go down and Scott Walker drills his orbital bone into the back of his head,
    Tim Thomas goes down and he chips in a game 7 OT winner.

    Daaammmmmmnnnnnn. Two best regular season teams gone.
    Anyone see Pronger maul our future superstar? Bastard.

  • BigE57

    @ Jack Bauer:
    Personally I can't though it may seem something like the Cracker Cats last couple of seasons in Edmonton before the Katz group took over. But can the situation in Phoenix be far off that, I mean aside from the new arena, thanks to the Suns, the Coyotes orginazation spent their days on street corners begging people to come to the games. How far away do you really think they were from having Wayne and the players acting as door greeters for the 20 fans per game. Ya your right that would be amazing!!! Go Bettman!!

  • TonyT

    @ Jason Gregor:
    Hey Jason, just wonderig aloud and was hoping you could comment on it. If the Arizona courts grant Balsillie the right to purchase the team (and even move the team as the owner), is there anything to stop the league from removing the Coyotes from membership in the National Hockey League?

  • PCan

    If the story about Dallas is true, this only further reinforces my theory (one I'm sure many before have had) that hockey, no matter how great a game it is, will never have the visceral resonance in hot climate markets to take root in a large enough percentage of the population. In hot cities like Dallas, Phoenix, etc, hockey is a RICH KID SPORT! If it wasn't for shinny it would just about be here also. But because in cold climate markets people actually own skates and sticks, hockey is able to take hold in a sports fans mind. However in a hot climate market, the costs of playing hockey are out of reach for the majority of the population. If you're a working class kid are you gonna spend thousands of dollars a year on hockey, or are you gonna spend ten bucks on a basketball and go play in the sun with a bunch of friends. Just look at Snoop Dogg, he parades hockey fandom like a gold chain or a bottle of Courvoisier. It's a status symbol of the rich in hot markets, and will never have enough mass appeal (with a FEW notable exceptions) to take hold. I say good riddance to Bettman, the Coyotes, Stars, Preds, Panthers, Thrashers, and any I may have forgot. Whether they re-locate or simply fold, good riddance. And the sooner the better, because in two or three years time, chances are Obama won't still be handing out free-money-for-every-incompetent-corporate-jag-off.