This is an archived version of a Field of Schemes article. Comments on this page are closed. To find the current version of the article with updated comments, click here.
April 14, 2010
Reinsdorf in, Ice Edge out in Coyotes lease vote
The Glendale city council held its vote last night on the two competing lease proposals by prospective owners of the Phoenix Coyotes, and the result was a dramatic one: The council unanimously approved the bid of Chicago White Sox owner Jerry Reinsdorf, while rejecting by a 5-1 vote the proposal by Ice Edge Holdings.
Reinsdorf is still a long way from taking control of the bankrupt, league-owned hockey franchise, however. Last night's votes were technically just on "memorandums of understanding"; an actual lease still has to be drawn up and approved by the council and Reinsdorf. The NHL also needs to agree on a sale price with Reinsdorf, who will be helped out by a promise of $65 million in taxpayer dollars that he can use toward the team's purchase price. (He'd also receive up to $100 million in public money over the next five years to cover losses, and be guaranteed a set sale price if he then decided to bail on the team. However, he would not get a pony.)
So the big question is: Why? I'm 2,000 miles from Phoenix, and the press coverage has been singularly mute on any reasons the council may have given for its blessing of the Reinsdorf bid. (The Arizona Republic, the state's paper of record, only managed to run eleven sentences on the council vote.) An AP story gave one hint, reporting that "vice mayor Manny Martinez questioned whether Ice Edge actually had the capital available," something we've heard concerns about before. Or there's always the Phoenix New Times' conspiracy theory, which is that Glendale City Manager Ed Beasley is steering the process to Reinsdorf to help out Beasley's friend (and Reinsdorf's arena lobbyist), former state legislator and ex-weatherman (no, not that kind) John Kaites.
In any case, even if the NHL and the council sign off on Reinsdorf's purchase, it will still likely face additional legal hurdles. The conservative Goldwater Institute (yes, named for that Goldwater) has already threatened to sue to block the deal, under state laws requiring a public benefit from any subsidy agreements. Goldwater lawyer Carrie Ann Sitren told the Globe and Mail that Reinsdorf "really seems to have insulated himself completely from any financial liability," noting that Reinsdorf will have operating losses covered by the public for five years, after which he's free to sell the team or move it. Sitren indicated that any suit would likely come after a lease deal is finalized, which likely won't happen until the NHL approves the team's sale to Reinsdorf, which is expected (but not required) by the end of June.
The only thing for sure right now, then, is no home games in Saskatoon for the Coyotes. Not until 2015, anyway.
and so the further consolidation of sports franchises continues, just the way it's been allowed to happen in so many industries here.
the chances that jerry has insulated himself from shortfalls and put the burden on local taxpayers is very good. look at the squeeze play he put on the taxpayers of cook co. and state of illinois.
will jerry use this to also get more power in arizona to squeeze taxpayers there for more in the future for the sox?
the nfl has kept it's owners from straying (with some success) into ownership deals in other leagues, cutting down on conflict of interest possibilities.
guess this dosen't matter to bettman and selig, the kings of the inside deal.
