The Coyotes are just the first domino (Steve Brunt)

globesports.com: The Coyotes are just the first domino:


Because of a lease that makes it virtually impossible to move the team out of its publicly financed digs in Glendale, without entering Chapter 11 bankruptcy protection, and because the team seems doomed to lose huge amounts of money there in perpetuity, it is hard to imagine anyone buying the Coyotes while the team is tied to its current home. That means the league doesn’t have to worry about Jim Balsillie riding to the rescue and making things complicated, but it does have to wonder whether there’s anyone out there who is rich enough and irrational enough to buy the franchise and keep it in Arizona in the teeth of a deepening recession.

So there are no obvious Band-Aid solutions here.

Except I’ve seen and heard multiple sources say that the league is working with the Coyotes in discussion with the city on renegotiating the lease. If that renegotiation fails, then all bets are off, of course — if it fails, chapter 11 for the Coyotes is probably likely, and then all bets are off.

But the reality is the city of Glendale can’t afford to let the Coyotes fail and go Chapter 11, perhaps even more than the league really doesn’t want it to. So something will likely get done here. And when it does, folks like Brunt will likely find a way to spin it against Bettman anyway…

Funny how Steve Brunt neglected to mention the thought of the lease being renegotiated. Except, of course, it doesn’t fit the way he wants to spin the story, which is to be as negative as possible against the league and Bettman. Funny that.

What nobody seems to be asking is why the Coyotes signed a lease that — even with trivially simple information on the revenues and market involved — you can see it’s not financially possible to make money as it’s structured. Heck, even a sports reporter ought to be able to figure that out and ask questions, and frankly, very few sports reporters ought to talk about the business side of hockey, since they only look silly (same is true of hockey bloggers….)

But the Coyotes did; personally, as bad as the old arena in Phoenix was, the Glendale arena is better hockey, but much worse from a business standpoint. A good question would be why the league didn’t work harder with the Coyotes THEN to either get a good deal, or open the discussion of relocation, which might have forced a better deal on the Glendale arena authority. And if not, move them. That is, to me, where there might be criticism of Bettman here: a reluctance to relocate a team even in the face of an impossibly bad lease arrangement. Now that the lease is signed, there’s no way out except a renegotiation under threat of nuclear war, or pushing the button and blowing it up. The league really, IMHO, not let it get this far, but somehow, everyone convinced themselves they could grow the market and make the lease sustainable. In retrospect, even without the economic meltdown, that was a bad business decision.

I’m all for not moving teams out of markets — but if the only options are moving and sucking your owners dry, I’d choose on moving. And moving a team might make the next negotiation with another city a little easier…

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