June 09, 2010

Reinsdorf out, Ice Edge back in, still no Coyotes lease

Stop me if you've heard this before: The Glendale city council voted last night to approve a memorandum of understanding with a purchasing group that hopes to buy the league-owned Phoenix Coyotes. Unlike the last MOU back in April, however, the names of the prospective owners have changed: Jerry Reinsdorf pulled out of the bidding on Monday night, leaving Ice Edge Holdings — that's right, the same guys who originally floated playing some home games in Canada — the winners in the Coyotes derby.

This is potentially a good thing for Glendale, given that the subsidy package demanded by Ice Edge was somewhat less egregious than the one Reinsdorf would have required. But there's still no actual lease deal in place with Ice Edge — the vote last night just gave them a 60-day exclusive negotiating window to secure one — and the city's leverage in those talks are still going to be pretty lousy, given that if they don't approve an owner they're stuck paying $25 million to the NHL and still having the team move to Winnipeg.

Yet another wild card, meanwhile, is that Ice Edge must secure financing to actually buy the team, something that even its own CEO isn't so sure about, according to the Winnipeg Free Press:

Daryl Jones, CEO of Ice Edge Holdings, the lone group in discussions with the City of Glendale to buy and keep the Phoenix Coyotes at Jobing.com Arena, is not sure his team will be able to put together a financing package to purchase the team.

"It's hard to gauge the probability of this deal closing," said Jones.

"Realistically, there has been a great deal of financial turmoil in the world over the last 45 days, sovereign-debt issues and stock market corrections, which are going to make it harder for us, or any group, to close this transaction. That being said, we do remain optimistic."

Furthermore, the Free Press notes that one "source close to the deal" says that even if Ice Edge "can provide proof of financing right now, there's no guarantee it will still be in place when this deal gets near closing." Not to mention that the NHL could still always reject Ice Edge's purchase offer, even once a lease is in place. At which point:

Should Ice Edge fail to close a lease deal with Glendale in the next 60 days, presumably the only option left for the city at that stage would be Chicago Bulls and Chicago White Sox owner Jerry Reinsdorf.

Isn't this where we came in?