The NHL’s most woebegone franchise, the Phoenix Coyotes, remains a ward of the league after prospective buyer prospective buyer Greg Jamison missed a deadline Thursday for purchase set by the city of Glendale, AZ.
For nearly four years, the NHL has owned the team as it struggles in the Phoenix marketplace. The latest development revived speculation about relocating the franchise. Seattle is likely at or near the top of the list. The other potential relocation sites are Quebec City and Markham, Ont., a suburb north of Toronto that last week voted to fund an NHL-level arena.
Seattle native Chris Hansen has included an NHL franchise in his plans for a $500 million arena in SoDo, but has made two things clear: His first priority is securing an NBA franchise, and he believes the arena deal will be viable financially even without a second pro sports franchise as co-anchor tenant.
He has yet to secure approval for the arena in SoDo, which awaits results of an environmental impact statement not expected until fall. There is no NHL-sized facility to house a franchise temporarily, at least south of Vancouver or north of Portland.
Hansen’s investor group, which includes Microsoft chairman Steve Ballmer, has made an offer of $340 million for 65 percent of the Sacramento Kings, based on a total value of $525 million. But the deal has run into resistance from Sacramento politicians and business people fearful of losing the city’s only pro sports franchise.
A counteroffer has been promised by Mayor Kevin Johnson, and NBA commissioner David Stern has committed to giving it consideration. Among the potential investors is Ron Burkle, a billionaire California supermarket magnate who is also owner of the NHL Pittsburgh Penguins.
Burkle met with Stern this week to discuss his interest. Another story about Burkle’s ambitions emerged this week when the Sacramento Bee reported that Burkle is in a group that is among three final bidders for the sports/entertainment firm AEG (Anschutz Entertainment Group), which operates arenas for eight NBA teams as well as KeyArena, the Sonics’ former home in Seattle.
Rumored asking price for one of the most successful companies of its kind in the world is $8 billion.
A year ago, AEG committed $59 million to building a new arena in downtown Sacramento in order to keep the Kings. A deal was struck between the city and the Kings owners, the Maloof family, which included the AEG contribution. But the deal fell apart weeks later when the Maloofs backed out, indicating there wasn’t enough in it for them. The Maloofs said they would not sell the team, keeping it in the outdated Sleep Train Arena in suburban Natomas, but quietly negotiated with Hansen and signed a purchase-and-sale agreement.
The sale must be approved by two-thirds of NBA owners, a vote that could occur in a regularly scheduled meeting April 19. Relocation is a related but separate vote, application for which must be made by March 1. A simple majority of owners is needed to approve relocation.
But if Burkle’s group was the winning bidder for AEG, Sacramento’s chances for new arena would go up, according to Bee source Andy Dolich, a sports consultant and former NBA executive: “Advantage in this, I think, is clearly Sacramento’s,” he said. Burkle would be in position to direct additional AEG funding to the arena to relieve some of Sacramento’s commitment of public money.
As you can see, the Kings sale is growing complicated. Meanwhile, the NHL is finally underway with a new collective bargaining agreement after a lockout that began Sept. 15 consumed 34 games of the 82-game season.
The new CBA is said to be favorable to owners. But the league owns the Coyotes and wants to stop the bleeding. Asking price is reportedly around $170 million, but a part of its value comes from the unusual lease provisions that were to have been part of the deal offered Jamison.
Glendale’s city council, desperate to keep the team in the city-owned facility, agreed to pay $308 million over the lease’s 20 years, about $15 million a year, in “management fees” to the team’s ownership. The direct public subsidy generated huge political heat in a time when tax money grow scarce for basic public services.
Jamison, former CEO of the NHL San Jose Sharks, was unable to muster the capital needed to make the deal work by the Jan. 31 deadline.
The Arizona Republic reported that a separate group of investors is prepared to step into the void created by Jamison’s failure to produce the money he repeatedly insisted he would deliver. The question is whether Glendale officials will agree to extend the lease agreement to a new group. A mayor and four of seven council members have been elected since since the proposal with Jamison was struck, and may want a better deal for the city.
There are no deadlines, but unless a new group can get Jamison’s public subsidy, relocation looms larger. A lease deal with a new group would be Glendale’s eighth attempt at saving the franchise.
NHL deputy commissioner Billy Daly said in a statement Friday: “We remain hopeful the Coyotes sale process will be resolved successfully and we will continue to work with the City of Glendale to move the process forward.”
Regarding relocation, the NHL probably prefers Seattle because of market size. The league would be losing Phoenix after already losing Atlanta 18 months ago, when the Thrashers moved to Winnipeg.
No reports of names of NHL buyers in Hansen’s group have emerged. His attention has been devoted to the Kings’ sale. While it’s possible that a sale to Hansen could be approved before relocation, Hansen is unlikely to move ahead if it means operating the team in Sacramento even for a year.