Anyone considering buying a sports team might want to consider the fate of Phoenix businessman Jerry Moyes, who is the majority owner of the Phoenix Coyotes.
Moyes, whose main business interests involve transportation companies, became a part owner of the Coyotes in 2001, five years after it moved from Winnipeg. He teamed up with Steven Ellman, who had grand plans for a major real estate development in Glendale, a Phoenix suburb where the Coyotes play. The development included the Jobing.com Arena, which the city helped build through $180-million(all currency U.S.) in financing.
Over the next five years, Moyes lent the club more than $230-million.
In September of 2006, the partners split. Ellman took control of the real estate development, called Westgate City Center Development, and Moyes took over the Coyotes and management of the Jobing.com Arena.
Some of Moyes' loans were repaid through the restructuring but most of the debt, $147-million, was converted into equity, court filing show.
Almost immediately, Moyes lent the club $5-million. But that didn't last long and he was soon pumping in more and more cash. By 2007, Moyes was owed $51-million, according to court filings. The following year the amount increased to $91-million and when the club filed for bankruptcy protection on May 5, 2009, Moyes said he was owed $104-million.
In court filings, lawyers for Balsillie estimate Moyes has lost more than $300-million in total since he became involved with the Coyotes.
The club has never turned a profit, they add, and lost more than $30-million last season.
While Moyes claims he is owed more than $100-million, the NHL and city officials in Glendale are not so sure. They argue his claim should be treated as equity instead of debt. If that holds up in court, the Coyotes total debt would be cut roughly in half.Report Typo/Error