We’ve been reporting the losses for 13 years. Today, our expectations finally came true. The Phoenix Coyotes have filed for Chapter 11 bankruptcy protection.
By our calculations — with the help of reports by the Arizona Republic — we believe the Coyotes have lost more than $400 million since being yanked out of Winnipeg and shipped to the desert by NHL Commissioner Gary Bettman in 1996.
What we expected to happen four or five years ago, ultimately took 13 seasons and three different ownership groups to come to pass. Because of problems created by his struggling core business, trucking-magnate Jerry Moyes could no longer pick up this franchise’s massive losses. Today, the inevitable became official. The Coyotes are bankrupt.
It’s not the end of the world, of course, The Pittsburgh Penguins have filed for bankruptcy twice. This time, however, moving the franchise might be the only alternative.
That’s because, almost immediately upon the announcement of the filing, it became apparent that the Coyotes had actually asked RIM CEO and proud Canadian billionaire, Jim Balsillie to make an offer for the team.
Balsillie has been asked to provide “debtor-in-possession” financing. Essentially that means Balsillie provides the necessary funds tp allow the team to keep operating while the bankruptcy process continues. According to our insiders in Phoenix, Balsillie’s offer is for $216.5 million and will pay off all the current creditors. There is $35 million owed to the NHL, about $80 million to SOF Investments LLC and about $97.8 million to a long list of unsecured creditors.
If Balsillie’s offer is accepted, he intends to move the team to Southern Ontario.
“The current team ownership asked that I table an offer to purchase the Coyotes and significant discussions resulted in an offer that is in the best interests of the franchise, the NHL, and the great hockey fans of Canada and Southern Ontario,” Balsillie said in a written statement.
“I am excited to move closer to bringing an NHL franchise to what I believe is one of the best un-served hockey markets in the world, Southern Ontario. A market with devoted hockey fans, a rich hockey history, a growing and diversified economy and a population of more than 7 million people.”
Naturally, the NHL wants no part of that move, but the league might not have any alternative this time. The league is dying in the southern U.S. and it’s unlikely that the Coyotes are the only team suffering financial stress.
Last night, NHL Deputy Commissioner Bill Daly issued the following statement:
“We have just become aware of today’s Bankruptcy Court filing purportedly made on behalf of the Phoenix Coyotes. We are investigating the circumstances surrounding the petition, including the propriety of its filing. We have removed Jerry Moyes from all positions of authority to act for or on behalf of the Club. The League will appear and proceed before the Bankruptcy Court in the best interests of all of the Club’s constituencies, including its fans in Arizona and the League’s 29 other Member Clubs.”
The Jets should NEVER have been moved to the Arizona desert in the first place. The business failure of Gary Bettman’s commissionership is becoming more apparent every day.
(For more information on the move of the Winnipeg Jets to Phoenix, see my book, Winnipeg Jets: A Celebration of Professional Hockey in Winnipeg, available at chapters.ca or winnipegmen.com)