Hockey Headlines

Saturday, 8 May 2010

What A Tangled Web

Apparently, we find out if the NHL's sunbelt experiment is over on Tuesday night when city councillors for Glendale convene to determine the viability of Ice Edge Holdings' offer to keep the Phoenix Coyotes in Arizona. While it appears that the media in Winnipeg are making this a lot bigger than what it currently is, there is no doubt that there is a good chance that the councillors will vote against the options put forth by Ice Edge, leaving the team in limbo once again this summer. And the frustrating cycle of "will they stay or will they go" starts all over again for fans in Phoenix. Oi vay!

I know I said I wouldn't write about any team moving to Winnipeg again without a team actually in the process of moving, but the fever pitch is reaching ridiculous proportions, so it needs to be addressed. But I want to address the history of the problem that the Coyotes are currently facing, and how I see this playing out.

Let me be the first to say that I empathize with fans in Phoenix. Having seen the Jets leave in my lifetime, I can honestly say that I had some serious anger towards the NHL and towards Phoenix for a few years. However, after learning about the dramatic uphill battle the Jets faced as a small-market team and with the shortage of available billionaires in this city, the move was inevitable. I'm happy to say that I have no anger towards neither the NHL nor Phoenix, Glendale, and Arizona whatsoever today because I believe it was bound to happen. If it wasn't 1995, it would have been shortly afterwards.

Here's where things get murky in terms of the Phoenix-Winnipeg connection.

Ice Edge Holdings wants to bring professional hockey to Thunder Bay, Ontario, and it's very clear that an NHL team would have a hard time playing in a tiny arena in a market with a limited number of people. If Winnipeg was considered a small market, Thunder Bay would be considered a speck-of-dust market. I don't think the NHL would want to send teams to a place where there is no major media, no chance of television broadcasts, and no chance of having a team survive.

While the NHL may not be viable in Thunder Bay, an AHL franchise would be. And this is where the murky reference begins.

Ice Edge Holdings has asked for exclusive rights to deal with Glendale, essentially freezing Jerry Reinsdorf out of the negotiation process to own the team. With Reinsdorf - the NHL's preferred owner - out of the way, Ice Edge could demand whatever they like with no pressure from outside sources. In a sense, Ice Edge would be able to force Reinsdorf to the outside with no effort, giving them the ability to do whatever is needed to own the Coyotes. We'll call this EXHIBIT A.

Back in Winnipeg, Ted Wyman and Kirk Penton of the Winnipeg Sun are working leads on the Coyotes story, and decided to contact Ice Edge regarding their professional hockey dream in Thunder Bay. Keith McCullough, the chairman of Ice Edge Holdings, stated to the reporters that the group would be interested in purchasing the Manitoba Moose AHL franchise and relocating it to Thunder Bay if the True North Group was able to purchase and relocate the Coyotes back to Winnipeg. We'll call this EXHIBIT B.

Elliotte Friedman of CBC Sports reported that the asking price by the NHL for purchasing the Coyotes is $165 million. ESPN's Scott Burnside went further in reporting that a purchase agreement is already in place between the NHL and True North Sports and Entertainment in Winnipeg in the event that the Ice Edge Holdings' demands are not met. The NHL has denied that a purchase agreement is in place, but a reliable source has informed me that there have been discussions between the NHL and True North already. Whether or not this has happened, I cannot confirm, but I'll stick with my source: the NHL and Winnipeg are talking. We'll call this EXHIBIT C.

Because Ice Edge has the exclusive rights to negotiate with the city of Glendale, and because the NHL has basically demonstrated that it is not willing to start another season as the owner of the Phoenix Coyotes, the club will be sold this summer to someone. The "someone" is still a major question mark, but here's how those three exhibited pieces of evidence fit together:

  1. Ice Edge Holdings loses nothing if the city of Glendale accepts the terms of their deal, making "Exhibit A" the best option for Ice Edge Holdings, the city of Glendale, and the NHL. The Coyotes have an owner, they remain in Phoenix, and they can begin to operate as a normal NHL franchise once again.
  2. The city of Glendale rejects the offer made by Ice Edge Holdings, throwing this whole situation into second gear. Because Ice Edge retains the exclusive rights to deal with the city of Glendale, Jerry Reinsdorf cannot be considered, and Ice Edge can exhaust all of their options in exploring ways to keep the Coyotes in Glendale. The only problem? They still want pro hockey in Thunder Bay.
  3. After "exhausting" all possibilities of an ownership deal, and dragging the negotiations with the city of Glendale into early June, the Ice Edge Holdings group says "no thank you" to owning the Coyotes, putting the pressure on the NHL to secure an owner before the July 1 free agency period. With Reinsdorf out of the picture for over a month, the NHL will need someone with a lot of cash and resources to step in. This is the moment that True North has been waiting for in terms of NHL ownership. The terms in "Exhibit C" would be accepted, and the Coyotes would back the moving trucks up for a return to Manitoba's capital.
  4. The NHL would agree to sell the Coyotes to the True North group and relocate the team to Winnipeg in order to rid itself of the ownership fiasco. With the Coyotes on their way back to Winnipeg, the AHL's Manitoba Moose would be in a bit of a scheduling jam as their calendar got a whole lot more crowded. As stated in "Exhibit B", Ice Edge Holdings would come to their rescue, and relocate the AHL franchise to Thunder Bay for the start of the 2010-11 season, thereby satisfying their promise to deliver professional hockey to Thunder Bay.
  5. After a quick shuffle, the newly-relocated Winnipeg franchise would move to the Northwest Division, replacing the Colorado Avalanche who would move to the Pacific Division, thereby satisfying all divisional alignments.
I feel for the fans in Phoenix because history is definitely repeating itself in the case of this franchise. Bear to witness this set of facts:
  • A deal to save the team, keeping it in its current location, falls apart in the eleventh hour.
  • A mad scramble ensues to find an owner, regardless of whether the team stays or not.
  • The new potential owner makes unreasonable demands, such as covering the team's losses and adding other team cost-cutting measures, to the city of the team.
  • An unreasonable deadline for these demands is imposed with an "or else" tagged onto the clauses.
That's what happened 14 years ago in Winnipeg. And it's exactly what is happening in Glendale right now. Again, I empathize with the people in Phoenix because I know what you went through.

That clause that Ice Edge and Reinsdorf asked for in covering the $20-30 million loss? Happened in Winnipeg. The City of Winnipeg wrote a cheque for $20 million in the final season that the Jets were in town to cover player salaries and other expenses in order to keep the Jets in town. Sound familiar?

Just to add a little salt to the wound, the last playoff opponent that the Winnipeg Jets faced in their final season? The Detroit Red Wings, who dispatched the soon-to-be-moved franchise in six games, rather than seven.

I'm not here to start telling people that "those who do not know history are doomed to repeat it". I just want the people in Phoenix to know that this franchise has faced this entire ordeal once before, and it resulted in the team being relocated. What I am here to say, however, is to learn from Winnipeg's mistakes if you truly want to keep your team. We caved in on several fronts, and we still lost the team.

How much is the City of Glendale willing to lose before they cut their losses? And how far will they go to save their beloved NHL franchise?

Until next time, keep your sticks on the ice!

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