The news that Matthew Hulsizer and the NHL are trying to rework the purchase of the Phoenix Coyotes in part by the league taking less money, naturally raised this question - how so, if commissioner Gary Bettman said the league would never drop the price?
Well, since this is now about saving face for the commissioner, there are a couple of ways to do it.
First, it must be remembered that when Bettman promised the owners they would not lose money on the Coyotes after buying them from bankruptcy court for $140-million (all currency U.S.), it was phrased along the lines of "You will never have to write a cheque to cover any loss because we'll take the money out of future revenues."
In other words, the cheques will be written on the NHL's line of credit and the future revenue will be applied to the line of credit.
This is a big deal with the NHL owners. The rich ones already like to grumble about writing cheques for things like revenue sharing. The other ones have enough trouble propping up their own teams, so covering another team would really make them sweat.
At this point, it is hard to say how much the league has dropped on the Coyotes. There was the original purchase price in October, 2009 plus the losses from the 2009-10 season, plus the legal fees from fighting would-be purchaser Jim Balsillie, plus any losses this season that were not covered by the $25-million put up by the city of Glendale. My guess is $190-million would not be out of line and might even be a tad conservative. Good thing the NHL's line of credit was bumped to more than $400-million a while back.
So how does Bettman give Hulsizer a discount on the Coyotes' asking price of $170-million and let him slide on covering this season's losses, which are expected to top $30-million?
Easy. You re-write the purchase agreement to say something like Hulsizer will pay, oh, let's say $125-million for the Coyotes and defer the rest of whatever they decide the purchase price will be. Then you add a clause or two that says, in the future, in any year the Coyotes turn a profit for x number of years, a certain amount will be paid to the NHL. Or, if Bettman is really serious about seeing the NHL eventually gets paid for its trouble, you could say a portion of the Coyotes' shared revenues from the league (for television, merchandising, etc.) will be paid to the NHL for x number of years.
Bettman's hold on the owners is such that they will raise few, if any, objections. And the commissioner can say he is getting full value through the future payments, nudge, wink.
But the fact this still will require a hefty contribution from the Glendale sharpies means any new deal has no guarantee of success. And that is why most people in the know still think this team is headed to Winnipeg.