Former San Jose Sharks CEO Greg Jamison speaks after NHL Commissioner Gary Bettman announced that the league owned Phoenix Coyotes is in a tentative deal to sell the team to a group that includes Jamison during a press conference before the start of Game 5 of the NHL Western Conference semi-final hockey playoffs in Phoenix, Arizona, May 7, 2012. REUTERS/Darryl WebbDARRYL WEBB/Reuters
The NHL's sale of the Phoenix Coyotes to a group led by Greg Jamison may have taken a step forward, according to two reports, but the long-awaited sale still has some hurdles to clear.
The Phoenix Business Journal reported Monday morning there is a tentative agreement between Jamison, the former president of the San Jose Sharks, and the NHL, which could be announced by league commissioner Gary Bettman before Monday night's playoff game between the Coyotes and the Nashville Predators. However, an earlier report on Fox 10 News, a Phoenix television station, was less definite. It said Bettman and Jamison were expected only to publicly discuss "a plan for a new ownership group."
Neither Bettman nor NHL deputy commissioner Bill Daly could be immediately reached for comment.
Even if Bettman and Jamison announce they have an agreement, that is not the biggest problem in the deal. It is thought they agreed on the basic terms of the deal some time ago - the NHL wants $170-million (all currency U.S.) for the team it bought out of bankruptcy in October, 2009 - but a lease agreement with the suburban city of Glendale is needed to complete the sale. The final step will be the approval of the NHL's board of governors but that is not expected to be a problem.
The biggest threat is the looming opposition from the Goldwater Institute, a conservative watchdog group which scuttled a previous bid on the grounds that Glendale would violate Arizona's laws against excessive public subsidies to private companies. The institute is still battling the city in court over access to records related to the Coyotes sale.
Jamison was looking for about $16-million per year from the city as a management fee to operate Jobing.com Arena. Informal declarations from council members showed recently that a slim majority of four of council's seven members would vote in favour of the payment plus another $1-million annually to pay the debt required to pay the fee over a 30-year lease.
That does not include outgoing Glendale Mayor Elaine Scruggs, who will not run for re-election this summer although she still has a vote in the city's 2013 budget. The mayor, whose vision of Glendale as a home for various professional sports teams led to a massive debt from building the necessary facilities, said she thinks Jamison should not receive more than $11-million as a management fee.
Over the last two NHL seasons, the city of 250,000 people committed $50-million to the NHL to subsidize the Coyotes' losses, which run to more than $30-million per year. But budget problems resulted in Glendale coming up $5-million short of its obligation this year, which is now due. Scruggs told city council they should ask the NHL for some of the $20-million back that is an escrow account controlled by the league and negotiate a payment plan.
While a majority of councillors may vote to pay Jamison what he is demanding, coming up with the money is another matter. Glendale is facing a deficit of $35-million in its 2013 budget, which has to be in place by late June.
In its ongoing budget deliberations, council is considering raising taxes, laying off as many as 51 city employees and cutting programs.