Leveraging A Better Deal At NHL's Poker Table Not For Faint of Heart

TSN this week broke the news that the NHL and the City of Glendale (COG) have reached a one year operating agreement including the bailout of losses provision, up to $25 million. The Globe & Mail added commentary to the story ( http://www.theglobeandmail.com/sports/hockey/winnipegs-hopes-for-nhl-team-alive-once-again/article1578321/ ) as well as proving a copy of the deal itself found here:

http://beta.images.theglobeandmail.com/archive/00660/Glendaledocs_pdf_660002a.pdf

http://beta.images.theglobeandmail.com/archive/00660/Escrowdocs_pdf_660001a.pdf

Several local supporters have questioned if this deal kills chances for the Coyotes moving to Winnipeg for the fall of 2010. Most suggest that a clause relating to severability does allow the NHL to opt out of this latest agreement should the bailout provision be nixed by the court. This keeps the door slightly open for Winnipeg and 2010.

However, that doesn't address the timing of such a court ruling and the implications to the NHL and the Coyotes.

If the NHL keeps the team in Arizona past its own point of no return and the bailout is ruled invalid by the courts, the NHL has stuck its' neck out from really little to gain. NHL stakeholders would be OFFside to believe that the NHL would so easily and effectively paint itself into a corner of the Arizona desert.

The key question is what happens to this time-sensitive deal should GWI or any citizen decide to take this bailout deal to court? Specifically I refer to any effort to get a court injunction on this deal. In other words, the court may "hold up" bailout payments between the NHL and COG until the case is resolved one way or another. Now effectively the NHL goes into this next season WITHOUT the guarantee they seek.

The NHL is a cunning entity. If such an injunction is made, this deal with the NHL and COG may be off by mutual handshake agreement.

Considering the first payment is called for the 15 to 18th of the month of September, there is time between now and then where an injunction could "eliminate" this agreement under such a scenario.

Why would the NHL not sell the team before that point of no return and ensure that its' Board of Governors come away break-even? Just what does Phoenix offer, after 14 years of failure, with a rink miles out of the questionable/poor market you wish to build upon? Especially if the governments aren't allowed to prop the team up? A future in Glendale seems the least liekly outcome this year and any future one.

In summary, the NHL has no real upside waiting another year . . . unless the NHL is trying to give other cities time to get into the bidding war with TNSE and Winnipeg? This "auction" possibly allows the NHL to sell the team for a $140 million purchase price plus 2 full seasons of losses (up to $20 to $30 million per year) and maybe even tack on a relocation fee. Waiting another year to attract a buyer wanting to hold the team in Arizona isn't the likely reason, as the team has been for sale since 2008 and has received the most "for sale advertizing" exposure beyond any other pro team outside of the Montreal Expos. And we know they are long since gone from Montreal.

Waiting another year only makes sense if the NHL is trying to find leverage against TNSE's Mark Chipman and David Thomson. Maybe in the next few months Quebec City finally announces solid funding for its new rink. Ditto Hartford, Seattle and Hamilton (but only if 'Copps II Arena' sits another 6 miles away from Toronto) assuming that ownership in those locales are ready to make a binding pitch to the NHL.

Maybe by then the TNSE owners have already wrapped up the Atlanta Thrashers for relocation to 300 Portage Avenue, Winnipeg, Manitoba better known as the MTS Centre.

Spout off at the online forum. Vent your frustrations on the long and winding road that this has become!

Chris
President, www.myNHLincludesWinnipeg.com
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