NHL finalizes sale of Phoenix Coyotes to new owners
Team had been under league control for almost 4 years
After years of wandering in the desert, the Phoenix Coyotes' ownership saga appears to be over.
An arena lease out clause could bring into question where they're playing five years from now, but on Monday the NHL finalized the sale of the Coyotes to the IceArizona group led by Renaissance Sports & Entertainment's George Gosbee and Anthony LeBlanc. Approval of the US$170-million sale came from the board of governors, which ended the league's ownership of the beleaguered franchise.
"This was an incredibly complicated deal that didn't get wrapped up quite literally until 8 o'clock this morning after pretty much a full weekend of working on it going through the night," LeBlanc said on a conference call. "No rest for the weary, as they say, and we're jumping right in now."
LeBlanc, Gosbee and nine other owners - the vast majority of whom are Canadian businessmen with connections to Arizona - are jumping in to a long process that includes adding staff on the business side and trying to sell tickets to grow the Coyotes' reach. Part of the effort includes a name change to the Arizona Coyotes, likely effective for the 2014-15 season.
The NHL had owned the Coyotes for the past four years, shortly after Jerry Moyes put the team into bankruptcy and through failed attempts by Ice Edge Holdings led by White Sox and Bulls owner Jerry Reinsdorf and then Chicago investor Matt Hulsizer to buy it. With IceArizona now officially in charge, the next step is strengthening the fan base.
"What this franchise has not had over the past 12 years is they've never had that combination that I think you need to be successful in the majority of sports markets," LeBlanc said. "That is strong, stable ownership combined with at least the understanding that you have the potential of your franchise winning."
The Coyotes missed the playoffs during the lockout-shortened 2013 season but made it the three previous years under coach Dave Tippett. Before bankruptcy, the team most recently made the playoffs in 2001-02.
LeBlanc had tried to purchase the team before as part of IceEdge. He teamed up with Gosbee last year, bringing in Daryl Jones, Avik Dey and others before securing NHL approval and financing.
"I think it's every Canadian boy's dream to own a hockey team," Gosbee said. "I've always wanted to. But it had to be the right deal. When I started talking with Anthony and Daryl over the years, I think the right deal was in the making here in January. I wanted to own the team because I thought, at the end of the day, it's a sound investment."
Negotiating a five-year out clause as part of a 15-year lease deal with the city of Glendale for Jobing.com Arena was made for business reasons, but it also raised skepticism, especially for a group of men with Canadian roots.
"I'm a good, solid Canadian like a good number of people in this ownership group and unfortunately it's very difficult for people to accept that hockey can be successful in a non-traditional market," LeBlanc said. "But we like to point to markets like San Jose and Dallas, even in the Carolinas, where hockey has really thrived. We feel that the same will happen here. But the reality is it's an investment and we have to protect ourselves, and hence the reason for the out clause."
LeBlanc told the board of governors that the out clause was the most "negative" part of the Coyotes' long and winding sale process, which included contentious Glendale city council meetings that cast doubt on the final resolution.
"I think the onus is on us to put the product out there and to sell the suites and the tickets so that this is no longer a conversation piece," LeBlanc said.
Even with that conversation piece, Gosbee was "ecstatic" about getting the deal finalized. His Calgary home was damaged in June's flooding, but Monday brought some good news on the Coyotes front.
"The home can be built up again," he said. "I'll start working on that project in the fall. It's a great day for me with the announcement that we've got this team."
For general manager Don Maloney, Monday brought even stronger emotions than the arena lease deal that gave the Coyotes at least five years of security.
"It feels like Christmas morning around here," Maloney said in an interview from his office in Glendale. "We're just very, very happy, relieved, grateful."
The ownership group will be led by Gosbee and LeBlanc and include Dey, Jones, Gary J. Drummond, W. David Duckett, W.R. Dutton, Robert Gwin, Scott Saxberg, Craig Stewart and Richard Walter. Asked about the Edmonton Oilers' large ownership group that existed before Daryl Katz took over, Gosbee likened the Coyotes' structure more to that of the Calgary Flames after their move from Atlanta.
"There's a strong, tight-knit ownership group here," Gosbee said. "Everybody really knows of each other. If we weren't doing this deal, there's a good chance a lot of us would be out for dinner next week or watching a football game."
Instead, they're working together to own a hockey team.
"The National Hockey League believes in Arizona as an NHL market and that these new owners can provide the Coyotes the opportunity to secure a stable, long-term future in Glendale," commissioner Gary Bettman said in a statement.
Giving the Coyotes a stable, long-term future has a lot to do with business, which LeBlanc and Gosbee will be heavily involved with. As far as hockey operations, not much is expected to change, with the exception of some more money being available.
"Our involvement will be almost exclusively on the business side and let Don continue to work his magic," LeBlanc said.
Magic off the ice involves trying to sell out the arena and building more of a following in Arizona. If IceArizona is successful at doing that and the franchise does not lose $50 million in the next five years, the out clause will be moot.
"This is obviously a franchise that has historically lost money," LeBlanc said. "You look at the track records of the individuals: Nobody in this group gets into anything with the expectation of failing. Our view is this is a franchise that has not had the opportunity to really show its potential."
The potential is there, finally, and LeBlanc and Gosbee hope winning and financial success follow.
"This is an exciting franchise," LeBlanc said. "Now that we're the owners we think we've got the Stanley Cup contender for the next 10 years, but we truly feel that fans are going to look at this club and say, 'This has a real strong potential of winning.' And what do you know? For the first time in years this franchise, there is no question it is tied to Arizona, and we have good, strong local ownership."