Reinsdorf group not answer for Coyotes
On Tuesday night, the Glendale City Council will get a chance to prove whether it truly wants its hockey team to remain in Phoenix for the long haul.
Assuming it does, it will be up to the NHL to likewise make good on its promise to ensure hockey gets a fighting chance in the desert.
At the end of the day, there is only one clear choice for handing over ownership of the beleaguered franchise, and it isn't to the guy with the deep pockets and the big profile and his name on the letterhead of the Chicago White Sox and Chicago Bulls.
With all due respect to Jerry Reinsdorf -- and we're sure he has a good reason for getting back into the Coyotes' ownership game after walking away months ago -- his bid group is not the one that should be taking over this team, not if the goal is to keep the team in Arizona.
When the city council votes on two lease proposals Tuesday night, there is only one that ensures the team stays long term, and that's the one put forward by the Ice Edge Holdings group.
True, that group doesn't have the profile Reinsdorf does; it doesn't have his money. But there is nothing in the Reinsdorf proposal that suggests he's going to put down any more of his own money than he absolutely has to. Most significant, the Reinsdorf proposal is the only one that includes a clause that opens the door to see the team move after five years and at any point beyond that.
Some would call it an out clause. A legal source suggested to ESPN.com that a more accurate term is a "remedy." If the team does not perform to a certain level financially in the next five years, Reinsdorf's group would have a remedy for that -- either selling the team to another buyer in Phoenix (good luck with that) or relocation. If you have a good look at the memorandum of understanding put out by Ice Edge, there is not one word about leaving town. Not one. The group of investors -- some Canadian, some not -- continue to yell from the tallest buildings that they are in for the duration of the current lease -- 24 years -- and beyond.
"Ice Edge intends to honor the term of the original lease," senior executives of the group wrote in an open letter released Monday to the citizens of Glendale. "We would then intend to sign a new lease for an additional 30 years. We have not requested the ability to relocate the franchise."
Foolhardy? Perhaps. But Ice Edge says not opening up the possibility of leaving is the only chance it has to repair the relationship with the local fan base, a relationship that has been destroyed by a shoddy on-ice product and gross mismanagement from ownership.
It should be what the city of Glendale wants, if it really wants this hockey team in its community long term.
If Reinsdorf's group gains control of this team, even if it truly wants the team to succeed forever and a day, the mere fact that the group requires the "remedy" or out clause should be a red flag. From the moment Reinsdorf's group takes over, uncertainty over whether the clock has started to tick on the team's future will hang over the franchise like a cloud.
If, as some people believe, city officials are enamored with Reinsdorf's reputation and are thinking of voting only for Reinsdorf's bid (a move that would effectively kill the Ice Edge bid), the NHL is further ahead to wait until June 30 when its transitional lease with the city of Glendale ends and simply move the team to Winnipeg or wherever it wants. Why would the NHL agree to an ownership group that is already looking for a way out of a market the league has repeatedly said it is determined to remain in?
It is possible -- and some say probable -- that the city council could approve both lease agreements, which would make for what should be an easy decision for the NHL: Sell the team to the group that has pledged to keep the team in Arizona. Critics have suggested the Ice Edge group doesn't have the money, between $140 million and $160 million, to actually buy the team. But a source told ESPN.com that within moments of having its lease deal approved by the city of Glendale on Tuesday, Ice Edge will have access to monies in excess of the sale price ($165 million), the majority of which is guaranteed by a major international bank, with another $75 million line of credit also a possibility.
Will that money materialize? No one knows until the cash is in the till, but why not find out? The Ice Edge proposal also ultimately gives the NHL what it craves: separation from the day-to-day operation of a team it had to rescue from bankruptcy. Ice Edge buys the team, and the NHL walks away.
Multiple sources have told ESPN.com that the Reinsdorf group bid essentially puts the NHL in the position of being "a bank," providing bridge financing of up to $60 million while Reinsdorf raises revenue locally. Another source said it was incorrect to characterize the deal in that manner.
The bottom line is, the NHL's board of governors, the ones who must ultimately approve any ownership group and have become the reluctant trustees of this wayward team, will not stand for being on the hook for one penny one second longer than it needs to, even if the man on the other side of the table is Reinsdorf.
"While the pundits have consistently doubted us, we have continued to prevail at every turn," the Ice Edge letter read. "On Tuesday, we will face another test as your city council votes on our proposal for a new lease for Jobing.com Arena. We believe our proposal is, far and away, the superior choice for the citizens of Glendale."
Anyone who wants this team to stay in Phoenix ought to feel the same way.
Scott Burnside covers the NHL for ESPN.com.
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