Horizon, Host: Ted Simons

July 13, 2009


Host: Ted Simons

Phoenix Coyotes


  • Arizona Republic Glendale reporter Rebekah Sanders provides an update on the Phoenix Coyotes bankruptcy case and ongoing ownership issues.
Guests:
  • Rebekah Sanders - Arizona Republic


View Transcript
Ted Simons: Lawyers involved in the Phoenix Coyotes' bankruptcy case were back in court today. Judge Redfield Baum turned down a request by Coyotes' owner Jerry Moyes to depose members of a group trying to buy the team and keep it in Glendale. That group is lead by Chicago White Sox owner Jerry Reinsdorf. Here to help us sort through this entire story is Rebekah Sanders, Glendale reporter for "The Arizona Republic." Good to have you here.

Rebekah Sanders: Thank you.

Ted Simons: There's so many elements. Let's start with the basics. The Coyotes are in bankruptcy court and we have an auction when? August --

Rebekah Sanders: August 5th is when judge Baum will decide whether the Reinsdorf offer is the best or whether he'll open it up to outside bidders who could move the team outside of Glendale.

Ted Simons: And the deadline for bids, it's still a ways away?

Rebekah Sanders: July 24th. Just around the corner.

Ted Simons: What would be the acceptable offer? As far as you can tell, I mean, we've got the Canadian guys well over $200 million and Reinsdorf at $148 million. Acceptable to whom?

Rebekah Sanders: There's so many different parties here. Glendale says that the best offer will be one that keeps the team in Glendale because there's so many -- so much taxpayer money going into the team to build the arena, and all the money that's involved. But others are saying, well, it makes more sense to move the team to Canada or a place where fans are pumped about hockey.

Ted Simons: The gentleman that wants to move it to Canada, who is he and how did he get involved in all of this?

Rebekah Sanders: He's co-C.E.O. of the research in motion, the blackberry maker and trying to get into the NHL for quite some time.

Ted Simons: And he's offering well over $200 million for the team and Jerry Moyes is saying, I think I'll take it.

Rebekah Sanders: Right, Jerry Moyes is in support of his bid, even though it would move the team to Canada. For one thing, Moyes stands to gain more from this offer than from Reinsdorf.

Ted Simons: They're against this particular transaction, why?

Rebekah Sanders: They see the investment by Glendale and the Coyotes as an important thing to protect. If a team can just declare bankruptcy and move, if the owner wants to, then other teams in the NHL could do. But other sports leagues are looking at this and pretty concerned.

Ted Simons: This seems like a relatively important case in terms of professional sports and municipalities and such. And if the judge were to go with the Canadian team, would we see an appeals process that would see major league with the NHL?

Rebekah Sanders: They've all spoken up to say we support the NHL. There needs to be due process and league rules should stand.

Ted Simons: I know there's another group, some Connecticut-based research firm nosing around. Is Reinsdorf the big offer on the table right now?

Rebekah Sanders: It is. The other one just popped up recently and even the NHL has said it may not come to fruition.

Ted Simons: What happens to the Coyotes' league with Glendale?

Rebekah Sanders: Glendale put $180 million out there to build the arena. So they're fighting hard to keep the team there so they can get back the revenue that would pay that debt off. And so the question is whether they will give up concessions or money to help the next owner be profitable at the arena. Glendale says they won't, but there's a lot of question if Reinsdorf will accept that.

Ted Simons: For the Reinsdorf deal to work, I would imagine it would have to be a long lease again. You don't want to bind it and -- buying it and then moving in another two or three years.

Rebekah Sanders: Some have speculated whether Reinsdorf will cut a deal, to say if we're not profitable enough in two to three years, we have the option of getting out and moving. That happened in Nashville with the Predators. But Glendale and the NHL say no way. We're not going to allow that. It's the same old case over again in a few years.

Ted Simons: I know that Glendale is keeping their talks regarding the team secret. Why is that?

Rebekah Sanders: They say they don't want anyone else at the negotiating table. They need to have as much privacy as possible to get the best deal. Essentially for the taxpayers of Glendale.

Ted Simons: And the Goldwater Institute is saying, wait a minute, the taxpayers may be on the hook if the deal is not so good.

Rebekah Sanders: Right, and this should be as open as possible so the public can judge whether they approve of the deal-making going on.

Ted Simons: So another aspect is the Goldwater Institute filing suit against the city?

Rebekah Sanders: Correct.

Ted Simons: And that comes up when?

Rebekah Sanders: July 20th is when the judge will rule whether Glendale needs to open up the books.

Ted Simons: The city council over in Glendale said they would open the books before a council vote.

Rebekah Sanders: Correct, so that the residents of Glendale can see what the proposed deal is and give feedback to the councilmembers.

Ted Simons: How much -- you referred to this earlier, but again, how important is it for the city of Glendale to keep a hockey team that, let's face it, is a little below the radar in terms of professional sports and hasn't don't well on the ice and has a devoted but small group of followers? Why is it important to Glendale to keep the team?

Rebekah Sanders: They say they would have $5 million in damages if the team left. Even though the Coyotes were not a winning team, they were still bringing thousands of fans down to the shopping and restaurant area. Spending money in the city. That was helping, again, to pay off that debt. And so if the anchor tenant of that arena leaves, then it will be hard to bring in the money they need.

Ted Simons: And you're talking about Westgate there, which is already having trouble.

Rebekah Sanders: Right, the economy has hit it hard, definitely, and the development is not as far along as it was expected to be, but still, the arena made that whole place just boom.

Ted Simons: What are you reading from the bankruptcy judge right now? Does it seem as though -- you tell me -- impressions? Does it seem like he wants to keep the team in Glendale?

Rebekah Sanders: He's a judge, it's hard to tell. It's so hard to tell. He really plays both sides, really grills the lawyers and it's hard to know which side he'll rule on.

Ted Simons: You got an offer for 200 and some million dollars and one 100 and some odd million, it should seem obvious.

Rebekah Sanders: But the question is who the creditors are. One argument is that Jerry Moyes and others should not really get any money from a -- from the bankruptcy court because it was their investment. They lost it. They're not entitled to anymore. But Moyes obviously is trying to fight that.

Ted Simons: So basically, he and other parts of ownership, including Wayne Gretzky. I guess what the city, the NHL is saying, we don't want those guys to make too much money off what is a bankrupt enterprise.

Rebekah Sanders: They're saying they're not entitled, and the better solution is to keep the team in Glendale and if Jerry Moyes had been able to find a bidder or had supported Reinsdorf, then they would have been on the same page.

Ted Simons: Is there -- and kind of a little opinion here, but is there a consensus of opinion as to why the Coyotes have never really made it in Phoenix, to the point where the team is now bankrupt?
Rebekah Sanders: Consensus, no.

Ted Simons: Yeah.

Rebekah Sanders: Everybody has their own theory. Some blame the change of location. That it went to the west valley instead of staying downtown. Others, especially in Canada, say hockey will never work in the desert. There's so many theories and others say it just needs better management. Get someone in there who is really the face of the Coyotes promoting them over town.

Ted Simons: And to get that better management, the city and NHL need to see the books and that's a fight, as far as Gretzky and Moyes together, correct?

Rebekah Sanders: But according to SHUMway, he met and let's find a way to make the team profitable, but it never came to a conclusion and then they put it into bankruptcy.

Ted Simons: Last question. NHL runs the Coyotes.

Rebekah Sanders: Correct.

Ted Simons: Let's say the NHL appeals and the process takes so long, will the NHL run the franchise until the appeal process runs out?

Rebekah Sanders: That's what it looks like. In all likelihood, the team will be here for another season because it's so late in the game and the NHL will be essentially putting the money into the team to keep it going.

Ted Simons: Complicated case, isn't it?
Rebekah Sanders: Very.

Ted Simons: And so many different angles and it's like the second period of a hockey game. Not even close.

Rebekah Sanders: Pretty much.

Ted Simons: Thanks for clearing stuff up for us.

Rebekah Sanders: Thank you.

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