Ice Edge Holdings has moved a step closer to buying the Phoenix Coyotes from the National Hockey League, which means at least some NHL hockey could be coming to Saskatoon.
The company, made up of eight Canadian and American businessman, has signed a letter of intent to buy the Coyotes from the NHL for about $140-million (U.S.).
"This is huge progress," said Daryl Jones, an Ice Edge partner. "Six months ago I never would have thought we'd get to this point."
Jones said the group remains committed to its plan to play a few "home games" in Saskatoon. "That's something we're still very focused on and intrigued by," he said. "It's something we are going to think hard about over the summer."
The league has not officially signed off on the idea but sources say NHL commissioner Gary Bettman has agreed. Jones declined comment on the discussions.
However, he added that the priority for the group will be to solidify the fan base in Phoenix first.
"We think hockey is great sport and can thrive anywhere," he said. "We've spent a lot of time in the [Phoenix]market and believe there's a great hockey fan base in Phoenix and we look forward to giving it a great product."
Sources among the NHL's board of governors indicated Bettman could face a rough ride over the Coyotes at the annual governors' meetings, which begin Tuesday in Pebble Beach, Calif. The tentative sale will dominate the agenda because of the owners' concerns about everything from how much of a loss they will have to share on the Coyotes, to how much cash is in the bid, to the spectre of playing games in Saskatoon, something that is sure to anger the owners of U.S.-based teams.
"Obviously [the sale]will be a loss for the league," said one governor, who did not want to be identified. "I am obviously concerned. We have to subsidize this so there will be a lot of questions."
The NHL acquired the financially troubled franchise last month after paying creditors about $140-million. The Coyotes have been operating under bankruptcy protection since May and went through a lengthy court-supervised sale process that ended up with the league as the only approved bidder.
At this point, it is not known how much the NHL has poured into the Coyotes since it started subsidizing the team at the start of the 2008-09 season. The Coyotes lost more than $60-million during that season.
The NHL was to receive $30.6-million back from the $140-million it paid for the team under the terms ordered by the U.S. Bankruptcy Court last September. Of the rest, $80-million went to the largest secured creditor, SOF Investments, with $18-million going to the debtors' estate, with most of that going to former owner Jerry Moyes, and $11.4-million to the unsecured creditors. The NHL also waived $15-million of a $30-million guarantee Moyes owed the league.
However, the $30.6-million the NHL received does not cover the money the league has to pay for this season's loss. Any loss the NHL takes will depend on how much cash Ice Edge puts into the sale.
Bettman had always said the league planned to sell the club to an owner committed to keeping the franchise in Phoenix.
"While much remains to be done, the NHL looks forward to working closely with Ice Edge to bring the sale to conclusion as expeditiously as possible," deputy NHL commissioner Bill Daly said yesterday.
Ice Edge tried to buy the club last summer during the court-supervised auction but pulled out when it could not negotiate a new lease with the City of Glendale, the Phoenix suburb that owns the arena where the Coyotes play. At that time, Ice Edge's offer included playing five Coyotes' games in Saskatoon's 11,300-seat Credit Union Centre. The group also proposed playing some playoff games in Saskatoon and moving the Coyotes' farm team, the San Antonio Rampage, from Texas to Thunder Bay, birthplace of two Ice Edge partners.
If Ice Edge does acquire the Coyotes, the group faces a daunting challenge.
The Coyotes have the lowest attendance in the NHL - fewer than 10,000 fans at many games - and are on track to lose as much as $50-million this season. Despite the grim finances, Jones said Ice Edge is convinced hockey can work in the desert.
"We believe that hockey can thrive in Phoenix and look forward to proving that," he said.
Several pieces still have to fall into place for the deal to close. Ice Edge has to finalize the purchase with the league and work out a final arena lease with the city. The NHL's board of governors also has to approve the group as owners. However, those are not expected to be insurmountable hurdles and the group could own the club before the NHL season ends.
The partners in Ice Edge include Anthony LeBlanc, a former executive at Research in Motion who has been trying to bring an AHL team to Thunder Bay, where he was born. The other partners include Jones, Keith McCullough and Todd Jordan, who all work at a Connecticut-based investment firm called Research Edge. McCullough, who is also from Thunder Bay, founded Research Edge and was captain of the Yale University hockey team. Jones, from Bassano, Alta., also played hockey at Yale.
The other partners are John Breslow, a Phoenix businessman who has been a co-owner of the Coyotes, and a group of Phoenix real estate developers who have not been identified.