FanPost

Media Backgrounder Re: Phoenix Coyotes relocation application

TORONTO, June 2 /PRNewswire/ -

 Following are background details on the application to re-locate the Phoenix Coyotes NHL club from Glendale, Arizona to Hamilton, Ontario.

Application author Tom Wright , former Commissioner of the Canadian Football League, will be available to speak with reporters via conference call today, Tuesday, June 2nd, at 12:30 PM Pacific Time/3:30 PM Eastern Time. Call-in numbers are as follows:

 

    In Toronto:     416-343-2659
    Elsewhere:      1-866-440-8941
    Conference ID:  8479118

 

OVERVIEW

 

An application for re-location was submitted to the Commissioner of the National Hockey League on behalf of both Coyotes Hockey, LLC ("Coyotes") and PSE Sports and Entertainment LP ("PSE") on Monday June 1, 2009. The purpose of the submission is to seek the League's consent to transfer the Phoenix Coyotes Club (the "Club") from the City of Glendale, AZ to the City of Hamilton, ON. All information responds to the considerations contained in NHL By-Law 36.5.

The NHL by-law requires information be provided to address matters regarding the market where the team currently resides and the potential new market.

Information surrounding the current market (Glendale AZ) was primarily provided by representatives for current Coyotes owner, Jerry Moyes .

The information was compiled to address in a comprehensive fashion all requirements established by the NHL and, given the information as set out, it is the belief of both the Coyotes and PSE that this application meets the NHL's criteria.

We fully respect the NHL's right to assess this information with a view to ensuring all criteria as set out in By-law 36.5 is met.

The application for re-location was also submitted to the courts and is a matter of public record.

 

    EXCERPTS FROM THE APPLICATION

    Market Research re: current location - Glendale AZ

    Information and data provided by the current owner, Jerry Moyes and
representatives of the Coyotes demonstrates overwhelming evidence that the
Club is not financially viable in its present location. Furthermore, based
upon all available information, there is no indication that the Club could
become financially viable there, either under its present ownership (Moyes) or
under new ownership.

    * Since inception the Club has recorded cumulative EBITDA losses in
        excess of $316 million.

    * The Club has been unable to generate a significant fan base in
        Glendale demonstrated by a lack of interest in attending a game live,
        with the Club ranking 5th in attendance interest in that market
        behind the NFL, MLB, NBA, and NCAA Football. Historic support is
        weak, attendance is low, ticket sales continue to decline and
        broadcast ratings are low.

    * Management of the Club has attempted to restructure its operations
        in an effort to increase revenues and decrease costs to reduce
        operating losses, and bring a greater probability of financial
        sustainability. Even with the most optimistic of planning assumptions
        the five-year horizon in Glendale projects further losses of over
        $40 million.

    * In an effort to secure additional investors or a buyer to help meet
        responsibilities towards all creditors, current owner Jerry Moyes
        engaged an experienced adviser and retained Citibank's Private
        Banking Group. There was not one expression of interest or an offer
        of any magnitude that would pay most of the creditors and keep the
        Club in Phoenix/Glendale.

    Market Research re: the Club's prospective performance in Hamilton, ON:

    Research clearly demonstrates Hamilton is a vibrant and viable hockey
market. Based upon population, demographics, and the result of quantitative
research conducted in May 2009, the support for an NHL team in Hamilton will
be strong and substantial.

    * Hamilton and the surrounding area have 1.4 million people and
        favourable demographics to support a team. While by itself, Hamilton
        and surrounding area is a large enough hockey market to viably
        sustain an NHL franchise, this specific market area is situated in
        Southwestern Ontario, a market area of more than 7 million where
        hockey is deeply entrenched and widely supported.

    * The median after-tax income of Hamilton Area Residents is 14% above
        the Ontario average and is a key indicator of residents' ability to
        spend for sports events and merchandise.

    * The Club will play its home games in Copps Coliseum. A complete
        renovation plan has been prepared by Stadium Consultants
        International (SCI), of Toronto, a subsidiary of BBB Architects. The
        fully renovated arena will comply with the design requirements set
        out in the NHL's Facility Standards.

    * The owner of PSE is Jim Balsillie. Mr. Balsillie is the Co-CEO of
        Research In Motion (RIM.) He is a businessman, philanthropist,
        community leader, and passionate hockey fan. He has been recognized
        throughout North America and internationally as a visionary
        entrepreneur, influential CEO, and an extremely competent business
        leader. His roots in Southwestern Ontario are deep and his community
        contributions exemplary.

    * Under Mr. Balsillie's direction, PSE has represented, to the extent
        that it would even be required, its willingness and ability to
        sustain losses during the initial years of operation.

    Impact the proposed transfer would have on the League in general:

    * From research completed in May 2009, a strong majority (66%) of
        Hamilton Area Residents would hold the league in higher regard based
        on the prospect of relocating the Club to Hamilton, with an
        additional 31% whose regard would remain unchanged.

    * In Phoenix/Glendale, results from the same research indicate
        residents are divided in terms of how relocating the Club will impact
        their opinion of the NHL. Nearly 40% say a potential move will not
        change their opinion of the NHL.

    * The NFL is widely considered to be the most successful league in
        North American sports. Yet, it does not have a franchise in Los
        Angeles, the second largest market in the U.S. If the NFL can operate
        successfully without a franchise in Los Angeles, so too can the NHL
        succeed and thrive without a franchise in Phoenix.

    * It is the understanding of both the Coyotes and PSE that the
        proposed transfer, if approved, would not affect any contract or
        agreement in effect between the Club and any public or private party,
        except to the extent such contracts are rejected through the Club's
        pending bankruptcy proceeding.

    * Transfer of the Club would not expose the League to liability to any
        third party for breach of contract, interference with contractual
        relations, or for any other cause.

                           BIOGRAPHY: TOM WRIGHT

 

Tom Wright is a respected business and community leader with over a quarter century of experience in the North American sports industry and close to 20 years serving in the role of President or CEO. He has both an intimate understanding of, and an abiding respect for league rules and sport governance.

As Commissioner of the Canadian Football League from 2002-2006 he effectively restructured the ownership of the League's two oldest franchises (Toronto and Hamilton) facilitating the transfer to new entrepreneurial leadership while stabilizing the public image of the CFL. He has served in a variety of roles on the Ontario and national Boards of Special Olympics in Canada for over 25 years, including as National Chairman and was the Honourary Coach of the Canadian team at the 2009 Special Olympics World Games. He has also been a Governor of the Ontario Region of the Canadian Olympic Foundation, and its Chair.

He has been President and CEO of Salomon North America , President of adidas Canada and President of Spalding Canada. He is currently Managing Director at LEVEL5 Strategic Brand Advisors.

 SOURCE Jim Balsillie

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