Is Phoenix Nearly Done As An NHL City?
The Globe & Mail published two stories in the last two days about the huge financial problems that the Phoenix Coyotes are having. David Shoalts's article, printed today, claims that the Coyotes have put up all of their assets, including franchise rights, equipment, logos, pretty much everything, as collateral for an $80 million loan from a private equity fund called SOF that comes due in 2013. From the sale of each ticket they pay $1.50 to the city for the arena, keep $9 and give the rest to SOF. The deal was apparently signed in 2003.
The Coyotes have just laid off 18 front office workers and are receiving advances on their broadcasting, merchandise and revenue sharing money in order to meet payroll and pay operating expenses. Shoalts also writes : "In return for the advances, the Coyotes need the NHL's approval for any major player or financial transactions, according to sources." It was bad enough to have Richard Peddy (supposedly) interfering with JFJ, imagine if it was Bettman.
Their lease at the Jobbing.com Arena is such that the only way out is bankruptcy so the team is basically unsellable and unmovable. This situation is guaranteed to get ugly and in spite of my belief that hockey just shouldn't be played in deserts, I feel badly for both of the Coyotes fans.
Contraction - Not Just What Happens To Your Sphincter When Someone Takes A Shot On Toskala Or Joseph
Yesterday Stephen Brunt published an article which looks at the Phoenix situation in terms of what it means to the league. His conclusion : "Historically, the Coyotes are a symptom, not the disease. They exist in their current straits because of the NHL's rose-coloured aspirations to conquer America.....given where today's NHL's weaklings are located, the bottom line right now doesn't seem to be much different from the bottom line 40 years ago: It's tough to thrive in the long run in the big-league hockey business in places where the game doesn't run deep."
In what I think is the most interesting statement in Brunt's article he says: "The Coyotes are merely the first domino, which is why some governors were quietly advocating for contraction even before the markets tanked. Pool the revenue-sharing money, use it to finance the purchase of four (or six) basket-case teams, put those franchise rights into suspended animation until a happier day dawns, or until a European opportunity beckons, and stop the hemorrhaging."
Screw the Entry Draft, if the league contracts to 24-26 teams the Leafs need to be in good position for the Contraction Draft. Between Phoenix, Tampa, Florida, Atlanta and possibly two other teams there would be a ridiculous amount of established talent and great prospects up for grabs.
I don't know how the issue of player and prospect rights would actually be resolved, but I assume there would have to be some kind of draft. It would be interesting to see what the CBA and league rules have to say about it. Anyone know?
Also, who do you think would go early in a contraction draft and who would you pick? It would be interesting to see which teams picked veterans to go for it now and which teams would focus on younger players and prospects.