Is the Dawn Breaking or Sun Setting on NHL Hockey in Arizona?

Bruce Garrioch is a very respected NHL journalist that primarily covers the Ottawa Senators. On Saturday, he had a blurb about the Coyotes contract negotiations you can find here:

http://www.torontosun.com/sports/hockey/2010/10/30/15891676.html

This is the first time we've heard that Glendale wants to be reimbursed to cover losses if and when the team leaves town.

If Garrioch has heard this things you can bet that ESPN's Scott Burnside and the Globe & Mail's David Shoalts are all over this. Several astute fans have already cued us to expect countering positive spin stories from the NHL any moment now.

This a real "catch-22" situation that boils down to one question: Does Hulsizer believe in this hockey market? If so, then taking the Glendale bailouts up to a certain number of years allows him to "turn it around" and make everyone including himself happy in the ending.

But if Hulsizer isn't so sure that he wants to believe in this hockey market, then the guarantees would become necessary. If, say after 5 years, he can't turn the books around, then he wants to move the team without re-paying the losses incurred over that time. And after a certain point Glendale would want to draw this bad deal to a close if the losses have no end in sight with both owner and city government losing money for no reason.

Hulsizer accepting to reimburse Glendale in covering Coyote losses upon team relocation is akin to paying $140 million now for the team plus another $100 million in losses in 4 to 5 years time, for an expansion franchise anywhere in North America that isn't called Ontario.

Hulsizer's advisors would be OFFside not to offer their expertise by asking one simple question.

Why would Hulsizer bother, when the NHL would gladly give him a team today for the low cost of $175 to $250 million in your choice of several attractive NHL markets?? The further risk in a troubled hockey market is needless for each and every party involved.

Why would Glendale offer to cover losses even for 5 or 10 years, if the team could simply leave then without any sort of repayment? For Glendale in comparision it is better to let the team go now, save throwing more good money after bad, and go out and find more attractive events for 40 days per year for their arena. Between extra concerts, more sporting events, a minor league hockey team and many entertainment options, there has to be a better way to avoid the arena being labelled a "White Elephant" than tossing $100 million plus into the same hole.

Thus a predictable stalemate has now been reported as occuring from a second well-respected hockey writer. (David Shoalts reported that the deal had hit a snag over a month ago.) This is possibly the same stalemate that both Ice Edge Holdings and Jerry Reinsdorf walked away from earlier.

The other option is to allow Hulsizer the right to sell the team for his inital purchase price to "make him whole". It is logical, that upon Hulsizer selling the team, that any price above his original purchase price threshold would most likely go to reimburse Glendale who would have tens of millions of dollars up to even over $100 million in losses by that point.

This second option really doesn't make Hulsizer "whole" because his initial investment would be recouped but he would have gotten nothing for the time value of his money over that 3 to 7 year period. If he can convince himself that the upside of market turnaround is higher than this downside then, he'll sign on. Even this is apparently is a "tough sell" to any propsective owner since the Glendale seems to be willing to help cover a large portion of Reinsdorf's and presumably Hulsizer's purchase outlay.

So it is almost a certainty that an out clause will be part of any deal that involves the Coyotes staying in Arizona. And this out clause may be even shorter than the standard NHL team purchase clause of 7 years no movement. Beyond the out clause, what side will blink first is unpredictable.

The real news this Halloween weekend is that Glendale wants to be either in full or in part reimbursed to cover losses should the team leave town. This seems highly logical to protect taxpayer interest (while keeping the Goldwater Institute at bay). Almost as logical as the perceived certainty that the team's financial outlook will only improve upon relocation. Now that Glendale's politicians have come through this first step, this second step may be forthcoming before year end. Whether or not Hulsizer comes to the same conclusion this year is the key question. The good news is that another handful of seasons with similar finances should provide Hulsizer the answer along with a strong life lesson that will soon part him from his hard-earned money.

A phone call to the previous 3 sets of owners just might expedite Hulsizer's learning, save Arizona taxpayers millions and help NHL Commissioner Gary Bettman "right a wrong" in Winnipeg.

Because with only 61 days left before the NHL's very public deadline after a very public litigation process, time is of the essence to finding a deal that seems stalemated almost by design.

Does your opinion differ? Skate on down to our Forum and have your say!

Chris
President, www.myNHLincludesWinnipeg.com
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