An interesting two-step dance is emerging in Glendale, Arizona between team sale price and lease subsidies.One would be OFFside to use regular business valuation techniques in trying to solve for the Coyote purchase price. After all, how much value other than salvage, would you pay for an asset that has lost $300 million over 14 years, never showing any season in the black? A series of owners, two arenas, several managers and many coaches have meant little to the bottom line even with a 100-point team almost top of its' conference. A banking source revealed that the value of the team may be as low as $50 million. However both of these approaches fail to take into account this salvage value. The team when ported to a new locale becomes effectively an expansion team, fully stocked with a team, prospects and an administration. With recent reported past sales (Tampa $170 million with lease and land, Edmonton $200 million, Minnesota $250 million, Nashville $193, Tampa $206 million with the same lease and adjacent land), the franchise may sell from between $140 million and $200 million. Trouble is the NHL has truth-stretched "announced" attendances for years and now appears to be doing likewise with the most recent sale of Tampa Bay to say nothing of the debt assumptions in both Nashville and Edmonton. Rumours suggest Jeff Vinik, an investment banker, drove his usual hard bargain and dropped $80 million cash for 100% of the Lighting. So that is the background for negotiations heading into the Phoenix firestorm to come.One would think that the NHL and the various 3 parties (IEH, Reinsdorf and TNSE)chasing the Coyotes would have had at least "feel out" discussions with the NHL to determine the purchase price, if not attempt real negotiations. The sticking point for the 2 buyers is based on how much of a concession they can get annually from Glendale. With the "subsidy" not known yet, the buyer business plan is incomplete. Thus the return on investment can't be calculated nor will banks pre-qualify the buyer to engage in a binding purchase price and contract with the NHL. And as the potential Glendale subsidy gets smaller, the purchase price that the buyers are willing pay almost certainly lessens, unless relocation is their desire as it is within the Thomson-Chipman camp. So in short, the purchase price may be only determined after the best lease is minted, unless relocation is the true motive in buying.The IEH LOI, wrote in mid-December, probably expires shortly, unless it was "non-exclusively" binding on the NHL. Otherwise why would the NHL put all their eggs in the IEH basket leading right up to the relocation deadline? (Would you believe that was the fix to move the team to Winnipeg as Plan B before Reinsdorf leaped back into the picture? Nothing will I put past the NHL anymore.) So whether or not IEH had agreed in writing to a binding price purchase, it may matter little now.... more »