They don't own the Phoenix Coyotes yet, but the partners in Ice Edge Holdings have already drawn up a detailed plan they say can produce a profit in five years.
The group's plan includes playing five regular-season Coyotes games in Saskatoon as early as next season, boosting revenue by about $15-million (all currency U.S.) and slashing costs by about the same amount. They also want to buy an American Hockey League franchise, move it to Thunder Bay as the Coyotes' farm team and help build a new 5,500-seat arena in that city.
"We've got very good indications that we should be able to pull this off pretty easily," Ice Edge partner Todd Jordan said yesterday. "The key is to sustain losses early."
Jordan was in Toronto yesterday along with three other Ice Edge partners - Daryl Jones, Keith McCullough and Anthony LeBlanc - to watch the Coyotes play the Maple Leafs.
Jordan, McCullough and Jones work for a Connecticut-based investment firm called Research Edge (McCullough and Jones are Canadian). LeBlanc is a former Research In Motion executive who lives in Ottawa. The partnership also includes four Phoenix-area businessmen.
Ice Edge signed a letter of intent last week to buy the Coyotes from the National Hockey League for about $140-million. The deal is expected to close within a few months.
Yesterday the partners insisted they can make the Coyotes work in Phoenix. They said they have financing lined up and a deal in principle for an arena lease with the City of Glendale, the Phoenix suburb that owns the Jobing.com arena where the Coyotes play.
McCullough said the partners have spent months analyzing the Phoenix market and creating financial models. He said the local economy is showing signs of stabilizing and its long-term outlook remains strong. "It's a really vibrant market," he said.
In terms of sorting out the Coyotes' finances, which are among the worst in the league, Jones and LeBlanc plan to move to Phoenix to manage day-to-day operations. The partners believe they can almost immediately cut costs and boost revenue.
"There's actually a lot of low-hanging fruit, there really is," Jordan said. "Just look at the way this team has been managed over the years."
LeBlanc said the team is doing remarkably well considering the bitter and prolonged bankruptcy protection process that started last May and pitted the league against former club owner Jerry Moyes and Canadian billionaire Jim Balsillie over plans to move the Coyotes to Hamilton.
"The fact that these guys are drawing [nearly]10,000 people a game right now is absolutely phenomenal to me," Jordan said.
Jones added that because of the bankruptcy protection process, much of the club's debt has been dealt with. "We're going to buy it with less than 10-per-cent debt on the team," he said.
New revenue will come from parking fees, better management of the arena and the Saskatoon games, the group said. Cost cutting will come from improved office lease arrangements, some staff cuts and the elimination of Wayne Gretzky's $6-million annual salary as coach. Gretzky resigned in September and Ice Edge is in talks with him to rejoin the club in some capacity.
The Saskatoon games, which are expected to generate about $5-million in extra annual revenue, are a key part of the plan, LeBlanc said. The games "really are a subsidy to the franchise to allow the team to stay in Phoenix," he said.
Saskatoon residents "we feel, humbly, would flock around a team that's their own, or partially their own," he added. "We don't have delusions that we are going to turn the entire province into this giant Coyotes fan base. But we think [the Coyotes]will be a big part of [the province]"
The group has already drawn up a potential schedule in which the Coyotes would play the games during road trip in Western Canada.
As for Thunder Bay, the hometown of LeBlanc and McCullough, Ice Edge is in negotiations to buy and relocate an AHL team. The plan is to turn that club into the Coyotes' farm team and drop the current affiliation with the San Antonio Rampage, LeBlanc added.
For now all the group can do is watch the Coyotes play. League governors still have to approve them as owners and consent to the Saskatoon plan. LeBlanc said the group got together in Toronto for a chance to watch the game and "enjoy the fruits of our labour."
He added that as someone from Ottawa, "it would be so sweet to watch our team win and the Leafs lose."