NHL offers $140M to buy Coyotes
The NHL is offering about $140 million US to purchase the Phoenix Coyotes in U.S. Bankruptcy Court, and will accept the existing lease to play in suburban Glendale.
The league announced Tuesday that it was submitting a bid, but did not reveal the size of the offer until Wednesday.
The other bidder that would keep the team in Arizona, Ice Edge Holdings, did not include a figure in its bid, but its Canadian CEO, Anthony LeBlanc, said the partnership will offer up to $150 million US.
However, the Ice Edge bid is contingent on reaching a new lease agreement with Glendale, something LeBlanc said must happen by the end of next week to keep the offer viable.
What about Wayne?
Neither offer would assume the contract of head coach Wayne Gretzky, reportedly $8 million US annually, nor provide any money to Coyotes majority owner Jerry Moyes.
NHL deputy commissioner Bill Daly did not respond to an e-mail asking if Gretzky would be replaced or his contract simply renegotiated.
LeBlanc said his company wants to keep Gretzky in any capacity, especially as head coach, and would seek to negotiate a new contract.
Canadian billionaire Jim Balsillie, co-CEO of Research In Motion Ltd., maker of the popular Blackberry mobile device, has submitted the largest bid at $212.5 million US, but it is contingent on moving the team to Hamilton.
The bids were filed Wednesday after being submitted by a court-imposed deadline on Tuesday for review by the debtors in possession, a group headed by Moyes.
The NHL said it would assume the current contract with Glendale to play at Jobing.com Arena through the coming season.
In the meantime, the league would attempt to negotiate an agreement that would make the team more attractive to a buyer.
The league said that if its bid is successful, it intends to sell the team to a third party.
Under the NHL offer, 20 per cent of any net profit of that resale, to an amount up to $20 million US, would be added to the bankruptcy sale price.
The league added, however, that it expects no net profit from the resale of the team.
Moyes stunned the league by taking the Coyotes into Chapter 11 bankruptcy on May 5 with a plan to sell the team to Balsillie, igniting a messy court fight.
Under Balsillie's plan, Moyes would get $104 million US of the $300 million US he claimed he loaned the team.
Both the NHL and Ice Edge contend that lost money was equity, not a loan, and that he should be removed as a creditor.
LeBlanc said in an interview with The Associated Press that he will be in Arizona early next week to meet with Glendale officials in the hope of finalizing a deal.
He indicated the Ice Edge approach to the talks is different than the one of a group headed by Chicago sports baron Jerry Reinsdorf.
That group pulled out of the running on Tuesday because it said it was unable to reach an agreement with the city.
"By the end of next week, we have to have some kind of agreement," LeBlanc said.
He said his group is not looking for subsidies.
"We want the city to help us in driving new revenue streams," LeBlanc said.
Auction set for Sept. 10
The Coyotes are scheduled to be sold at auction on Sept. 10.
Ice Edge, a partnership of six Canadians and two American investors, also still must finalize details of agreements in principal reached with the NHL and the Coyotes' largest secured debtor, SOF Investments, which is owed some $80 million US.
The NHL bid would either pay SOF the $80 million US or work out a repayment agreement.
Even though he and most of his partners are Canadian and he worked with Balsillie for nine years at RIM, LeBlanc insisted there would be no plans to move the team out of Phoenix.
"The easiest way to answer this is we have not asked for an 'out' clause in our negotiations with the city of Glendale," he said, adding that Ice Edge is "completely committed" to keep the team in Arizona.
Still, the offer includes provisions for playing five regular-season games and an unspecified number of playoff games in Saskatoon.
LeBlanc said that move would allow an increase in revenue while Ice Edge works to repair the Coyotes' tarnished reputation and build its fan base in Phoenix.
LeBlanc said he was shocked when the NHL entered the bidding.
"It's a little strange," he said.