Matthew Hulsizer has agreed the NHL is entitled to $165-million (all currency U.S.) for the Phoenix Coyotes, but he is not willing to pay that much.
However, if the suburban City of Glendale agrees to pay the difference between Hulsizer and the NHL (said to be $25-million), plus cover the tens of millions of dollars in annual losses of the club, then the sale of the financially crippled club may finally be completed.
The NHL has set a deadline of Dec. 31, or it will sell the club to someone such as True North Sports and Entertainment Ltd., which would move the Coyotes back to Winnipeg.
NHL deputy commissioner Bill Daly told a group of Toronto reporters on Friday that the league has an agreement "conceptually" with Hulsizer. However, that was a reference to the purchase price. The 40-year-old Chicago businessman still needs to work out with Glendale how the NHL will get its money, so even though Daly said later Friday an announcement is close, there is still no agreement in sight.
While Hulsizer and Glendale officials have an agreement in principle on a lease for Jobing.com Arena, several contentious issues remain. Any of those, such as the length of the contract (which sources say is already in dispute), to an escape clause for Hulsizer, could scuttle an agreement.
A source said Hulsizer recently told friends his attempt to buy the Coyotes was over when talks with the NHL broke down.
There is also the threat of legal action from the Goldwater Institute, a public watchdog. The group has already successfully sued Arizona municipalities over excessive public subsidies for private businesses, which are illegal in the state. Goldwater officials say they will not hesitate to take Glendale to court but are waiting until a lease agreement is officially drawn up before making a decision.
The tentative lease deal is for five years and will send more than $100-million to Hulsizer to cover his costs in buying and running the NHL team. While the money will be raised through parking and levies in a "community facilities district" around the arena, Hulsizer will be guaranteed an annual amount and the city will be responsible for any shortfalls.
There is said to be much in common with Hulsizer's "memorandum of understanding" as it is called and the one struck by Chicago White Sox owner Jerry Reinsdorf before he decided against buying the club. Under that proposal, Glendale agreed to pay a total of $65-million directly to the NHL in three annual payments as part of the purchase price. In addition, Reinsdorf was guaranteed $25-million a year for seven years to cover any losses and the city agreed he would receive at least $103-million after five years if he wanted to sell the club or it could be sold and moved.
On Friday, Daly and NHL commissioner Gary Bettman were not dismissive of the chances of Winnipeg and Quebec City returning to the NHL. However, the commissioner stopped short of making any promises. Before anything can happen in Quebec, Bettman said, a new arena has to be built.
"Nothing starts without a new building," he said. "It's really up to the various constituent groups to resolve that."