Phoenix Coyotes Seek Bankruptcy Protection, Sale: Winners & Losers

 By Dan Canavan

The viability of the NHL’s Phoenix Coyotes has been in question for some time now.  The most recent turn has the NHL opposing the Coyotes’ plan to sell the  team to an investor intent on moving the franchise to Canada.   The NHL claims that it is in control of Coyotes, therefore the team has no authority to file for bankrputcy or sell the team.  This dispute will not be resolved any time soon, but let’s take an early look at the winners and losers:

WINNERS

Current Owners: they rid themselves of what one investor called “a basket case,” an “unmitigated disaster,” and a situation that was only worsening.  The Coyotes have lost a staggering $73 million over the past three years.

New Owners: get an NHL team and can move the franchise to a Canadian city that will support it.

Players’ Association: due to the revenue-sharing arrangement in the NHL, the players’ association is incentivized to relocate struggling franchises to better, more profitable markets, thus creating a larger pot of revenue to share.

LOSERS

NHL Commissioner’s Office: if the Coyotes move to Canada, the NHL is essentially acknowledging that southern expansion has failed.  If the NHL strong arms the franchise to stay, it will be forced to float millions of dollars to run the team.  The price of saving face is exorbitant and will not insulate the NHL from the bad publicity it will receive from blocking the sale and refusing to acknowledge that Phoenix is not a viable home for an NHL franchise.  In fact, the mud-slinging has already begun, as the group attempting to purchase the Coyotes claim that the NHL is operating like an “illegal cartel.”

Glendale, AZ: having recently spent millions building a new arena for the Coyotes, the City may be left with nothing but an empty building and an unfulfilled lease.  Glendale officials argue that the lease can’t be broken without the payment of $750 million.

Hartford, CT: The Coyotes have lost $73 million over the last three years and have demonstrated no ability to support an NHL franchise.  Yet Hartford  is not so much as mentioned as a potential destination for an NHL franchise.

Dan Canavan is an attorney at Updike, Kelly & Spellacy in Hartford, Connecticut, and fan of the former Hartford Whalers.  He can be contacted at dcanavan@uks.com or 860-548-2672.