PHOENIX – The NHL is offering about US$140 million to purchase the Phoenix Coyotes in U.S. Bankruptcy Court and would avoid a sticky issue still facing the case by accepting the existing lease to play in Glendale.
The league announced on 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.
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.
Neither offer would assume the $8-million-per-year coaching contract of Wayne Gretzky, nor provide any money to Coyotes 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 coach, and would seek to negotiate a new contract.
The two bids plus the $212.5-million offer of Canadian billionaire James Balsillie, which is contingent on immediately moving the franchise to Hamilton, 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 says it would assume the current contract with Glendale to play at Jobing.com Arena through the coming season. But in the meantime, the league would attempt to negotiate an agreement that would make the team more attractive to a buyer.
The league says 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, 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 drawn-out, messy court fight. Under Balsillie’s plan, Moyes would get $104 million of the $300 million he says 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.
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. The NHL bid says it would either pay SOF the $80 million 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 Research In Motion, LeBlanc insists there would be no plans to move the team out of Glendale.
“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.
