Is the NHL/Glendale stalling?
Yesterday, both the NHL and the City of Glendale have filed motions to the court to delay the ‘Glendale only’ auction from August 5th to sometime in November.
From the NHL:
Based on the foregoing, the NHL moves the Court to extend the hearing date for the sale of substantially all of the assets of the Phoenix Coyotes to September 10, 2009.It is clear to the NHL that the Reinsdorf Group’s Bid presents a significant opportunity to sell the team to an owner thatis dedicated to keeping the team in the City of Glendale, thereby avoiding the massive damage to the City, which has been described to this Court, as well as providing for the Debtor’s secured creditors and a substantial percentage of Debtor’s unsecured creditors.The NHL also understands that the Reinsdorf Group is close to a deal with the City of Glendale, which representsits most significant outstanding contingency. The NHL believes that once the Reinsdorf Group reaches an agreement with the City of Glendale that the other deals they are attempting to work out with creditors will also fall into place.
From the City of Glendale:
In recognition of that fact, each of these two bidders has steadfastly worked over the three weeks permitted here to satisfy all such contingencies and to make the modifications necessary to make such bids fully compliant with what this Court and all creditors would expect as a final bid. Glendale is very pleased to report that it has conducted very extensive, constructive and good faith discussions with each bidder and as of this day, is very close to a definitive agreement with each of the Reinsdorf Group and Ice Edge that would allow the Team, under new ownership, to continue to play at the Jobing.com Arena in Glendale for the foreseeable future with strong economic essentials and support from all necessary constituencies.
Those statements from the NHL and from the City of Glendale are quite telling because they are essentially arguing that over the past three weeks they have worked their butts off to come to an agreement with Jerry Reinsdorf but have not quite been able to cross all the t’s and dot all the i’s yet but given another few weeks they could accomplish just that. But what has me confused is the NHL’s assertions that Jerry Reinsdorf was set proceed with an intent to purchase agreement way back on May 5th only to be shunned by Moyes taking the team to bankruptcy only hours before a meeting with Moyes. If the City of Glendale, the NHL, Reinsdorf, and the creditors have only been working on an agreement for the past 3 weeks, what were they doing during May and June?
If the NHL/Glendale can get Judge Baum to postpone any relocation auction it will give the NHL/Glendale almost another full year to find a new owner for the franchise that will keep the team in Phoenix, even if both Jerry Reinsdorf and the Ice Edge groups drop out which if they can’t come to an agreement with the City of Glendale will certainly happen. The hope might be that a couple things happen: 1. The economy turns around and credit becomes more obtainable making the purchase of an NHL team more viable to more people. 2. The Coyotes young players really take a step forward this season and turn the Coyotes into a playoff team generating more fan interest and more revenue and thus making the Coyotes a more attractive team to buy and keep in Phoenix. Or, failing that, it will give the NHL more time to find an owner of their choosing (read: anybody but Balsillie) to relocate the team to a location of their choosing (read: Kansas City, Las Vegas, etc.).
As I wrote yesterday, I expect Judge Baum to view this as a delay tactic and choose not to delay the Glendale only auction and rather just state that these bidders can participate in the open auction already set for September 10th if they can’t participate in the August 5th auction. The question will be, will there be any bidders come next Wednesday’s auction? Presumably not since everyone is stating they need more time.