Matthew Hulsizer, the Chicago financier, who hopes to have the purchase of the Phoenix Coyotes completed by the end of the month, realizes the financially strapped NHL team does not look like the world's greatest investment.
"It's been my experience that if you make a great product, hockey teams have a lot of value," he said after emerging from a meeting with the NHL governors' executive committee. "Those things tend to grow over time. I tend to be a longer-term investor. As I look out 25 years, I think people will look back and say, 'Hey, that might have looked smart.'
"Right now, it's not going to look smart for a long time, though."
Hulsizer, 40, said his passion for hockey is what is driving his interest in becoming an NHL owner. He played NCAA Division III hockey at Amherst College and said, "I played hockey in my driveway 30, 35 years ago - and I'm shooting against the garage. I don't think said I want to grow up and be an owner. I did want to be a player."
The executive committee received a briefing on Hulsizer's plans to buy and operate the team.
"I think they wanted to know what kind of a guy I was," Hulsizer said. "I'm a hockey fan and a hockey coach and a hockey player. And I'd love to join the club."
The purchase price of the Coyotes is thought to be about $165-million, which represents what the NHL has spent on the team since the league bought it in a bankruptcy court auction in October, 2009. Hulsizer and the league reached an impasse in negotiations three months ago because he did not want to pay more than $140-million, according to sources. It appears Glendale broke the impasse by agreeing to cough up the difference through a new arena lease even though the city already was paying the first $25-million of this season's losses.
Hulsizer said he is close to a lease agreement on Jobing.com Arena with the city of Glendale and expects it will be presented to city council for a vote at its Dec. 14 meeting. "I hope to have this completed by the end of the year," he said.
Julie Frisoni, a spokeswoman for the city, confirmed that council hopes to see the lease on Dec. 14, although the finishing touches are still being made. The NHL set a deadline of Dec. 31 for the Coyotes to be sold or it would sell to someone who was interested in moving them.
This means True North Sports and Entertainment Ltd., which had a standing conditional offer for the Coyotes with the NHL, will have to look elsewhere for a team to move to Winnipeg. The likely choice, according to NHL sources, is the Atlanta Thrashers, although Quebec City also has its eye on them.
The Coyotes' lease will almost certainly contain direct and indirect subsidies, since even in a good year the team's losses are $20-million. Sources say the lease will be similar to tentative deals reached with Chicago White Sox owner Jerry Reinsdorf and the Ice Edge Holdings group of Canadian and U.S. businessmen. Both of those deals fell through.
Sources said Hulsizer and the city were negotiating a multi-year lease that could pay him $100-million toward the Coyotes' annual losses through parking charges, taxes and property levies from a community-facilities district created around Jobing.com Arena.
The Reinsdorf agreement called for those proceeds to be used to create an "operating loss reserve account" that would collect $25-million a year with a cap of $100-million and seven years. Parking charges at the arena would also go into the operating-loss account.
However, the Reinsdorf deal said after the fifth year of the agreement, if the operating-loss account does not have enough money to pay for the Coyotes' losses, Glendale is on the hook. The city would have to make up the shortfall itself or allow Reinsdorf to sell the team to someone who could move it.
City officials have claimed any new owner will reimburse the city for the $25-million it put up to cover this season's losses but that remains to be seen.
"We've negotiated most of the lease and I think we're just waiting to sort of finalize that," said Hulsizer. "And then it will be released to the public shortly."
Hulsizer said the Ice Edge group may take a minority share in the team but he will own "the vast majority." He plans to hire a president to run the team, telling reporters it will be "somebody with experience and it'll be somebody who you guys would all look at and say 'Yeah, I get it, this is a person who is an A player.' "
Coyotes general manager Don Maloney and head coach Dave Tippett will remain in place.
In other business on Monday, the NHL governors are expected to approve the sale of Harley Hotchkiss's 22-per-cent share of the Calgary Flames. The shares, which are being sold as an estate-planning move, will be purchased by the other partners in the team.
Flames president Ken King said the sale "is a private matter" but he did say Hotchkiss, 83, will still remain an active member of the team's board of directors despite the sale.