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Phoenix Coyotes Bankruptcy Proceedings (2009-Present)

Phoenix Coyotes Bankruptcy Proceedings (2009-Present). By: Ryan Coyle. May 2009-Bankruptcy Filed. Then-owner Jerry Moyes filed Chapter 11 Bankruptcy in Phoenix bankruptcy court. Stated losses of ~$30 million a year

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Phoenix Coyotes Bankruptcy Proceedings (2009-Present)

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  1. Phoenix Coyotes Bankruptcy Proceedings(2009-Present) By: Ryan Coyle

  2. May 2009-Bankruptcy Filed • Then-owner Jerry Moyes filed Chapter 11 Bankruptcy in Phoenix bankruptcy court. • Stated losses of ~$30 million a year • Moyes spearheaded a sale to Jim Balsillie of PSE Sports and Entertainment for $212 million • Club was scheduled to move to Hamilton, Ontario

  3. NHL Commissioner Intervention • Gary Bettman, commissioner of the National Hockey League, nixed the Balsillie sale • Bettman claimed Moyes lacked the authority to initiate such a sale • Club had been receiving league support, thus making the NHL the majority owner • Claimed sale also violated league policy • Bettman, Moyes elected for bankruptcy hearings

  4. Bankruptcy Hearings (May-September 2009) • Honorable Redfield Baum, a bankruptcy judge, overlooked arguments from both parties. • Baum agreed w/ Bettman • Baum believed relocation was unwarranted • Also believed it could not happen in a timely manner • Absolved sale, awarded NHL a chance to bid for the team

  5. The League Ownership Years(October 2009-Present) • October 26, 2009- Jerry Moyes sells the Phoenix Coyotes to the NHL for $140 million • League states it is committed to keeping team in Arizona • AZ is a large television and revenue sharing market; large potential profits • League elects to find a new owner, conduct sale

  6. Ice Edge Holdings; Jerry Reinsdorf(December 2009-March 2010) • Reinsdorf, Chicago Bulls and White Sox owner, pushed to purchase the club. • Reached a tentative lease agreement w/ City of Glendale • Agreement contained a 3 year relocation clause: Not ideal • Ultimately failed to secure sufficient financing • 1st local sale to fall through

  7. Peak 6 Investments; Matthew Hulsizer(September 2010-June 2011) • Chicago based venture capitalist and his investors entered a bid for the team; $165 million • December 14, 2010- 30 year lease agreement approved by City of Glendale • Lease centered around COG financing arena operations and selling financial bonds for funding • Again, not ideal. Glendale was on the hook

  8. Goldwater Institute Vs. City of Glendale(March 2011-June 2011) • GWI, a public watchdog group, disapproved of COG’s lease agreement w/ Hulsizer • Stated bond sales to fund arena operations violated Arizona statutes and laws • This disagreement went to court • Judge sided w/ City of Glendale • GWI’s litigation sunk bond ratings regardless, preventing their sale • June 27, 2011- Hulsizer and Peak 6 canceled their bid • 2nd attempt to purchase team that fell through

  9. Silicon Valley Sports and Entertainment; Greg Jamison(August 2011-January 2013) • August 19, 2011- Phoenix Business Journal reports Greg Jamison and investors have entered bid for purchase of the club; $160 million • Yet another 30 year lease agreement approved • COG would pay $16 million a year to operate the arena • Goldwater Institute resurfaces, fails once again. John McCain “chased” them off.

  10. Greg Jamison Continued… • Gary Bettman and Jamison announce during 2012 playoffs that sale is eminent • Jamison and his investment company scramble to secure the $160 million • The party fails to do so • January 31, 2013- Lease agreement deadline passes, lease is null and void • February 2013- Bid for the club is abolished; the 3rd investment group to end their bid

  11. Over The Years; Implications(2009-present) • Since the 2010-2011 season, City of Glendale had paid $25 million/year to operate the arena • $50 million in taxpayer dollars used to fund Westgate City Center and Jobing.Com Arena • $25 million currently lies in escrow, fate of the money is unsure • NHL still attempting to land an owner

  12. Implications Continued… • Phoenix Coyotes hockey club likely to be relocated following the 2012-2013 season • An ownership group must complete a purchase within the next month to keep the club in Glendale • Taxpayer funded arena could sit empty, idle. • According to Rialto Arena Management, only 4 small events booked through 2013

  13. What Will Happen? • No one is sure • The result will set precedents for viability of taxpayer funded arenas • There are currently talks of interest from new investment groups • These groups remain anonymous • City of Glendale and its citizens likely to find out in May of 2013 • Stay tuned!

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