The Phoenix Coyotes franchise filed for Chapter 11 bankruptcy protection today. Included in the filing is a conditional offer to buy the franchise for $212.5 million by PSE Sports and Entertainment, which is owned by Jim Balsillie, and the stated intent of Balsillie is to move the franchise to southern Ontario. The bankruptcy filing means that any offer to buy the franchise and any potential relocation of the franchise will be under the supervision of the bankruptcy court. Balsillie has provided the franchise $17MM in advance of the sale to keep the franchise operating until the final disposition of the court. The bankruptcy court will entertain all offers to purchase the franchise, and the court will award ownership of the franchise to the bidder that will offer the best terms for the purchase.
Jerry Moyes, owner of Swift Transportation and the Coyotes franchise, has been losing copious sums of money for several years with the franchise. He has been able to sustain those losses because his business income from his trucking company could offset those losses. With the slump in the economy, and subsequently the trucking business, Moyes could no longer support these deficits. The attendance for the Coyotes has been abysmal, and the franchise is located away from downtown Phoenix. Couple those facts with the mediocre brand of hockey the Coyotes have played over the past several years, and you have a formula for disaster. Balsillie has managed to anger a number of people in the NHL with his heavy handed tactics (remember how we felt in Nashville), but the fact remains that he has the financial horsepower to right this financially ailing franchise. The interesting question is will he be able to relocate the franchise in light of the NHL's stated desire to keep the franchise in Phoenix/Glendale?
This is indicative of the fragile economic conditions that surround some of the franchises in the NHL. Pred fans should be thankful for sound, local ownership in these tenuous economic times. For more on this story, follow the link on the the right to James Mirtle's blog
From the Rink.