It looks like the Phoenix Coyotes might be staying in Arizona after all.
Following talk of the franchise moving north to Canada, The Globe and Mail is reporting that the NHL is nearing a deal to sell the franchise to Chicago White Sox owner Jerry Reinsdorf.
Reinsdorf heads one of the two bids in serious competition to purchase the team, and the city of Glendale will vote on arena-lease agreements put forth both by Reinsdorf and Ice Edge Holdings LLC, though the NHL — which currently owns the Coyotes — favors the bid from the Chicago business man. The deal with Reinsdorf could require the community to take on up to $165 million in operating costs, something that could draw legal action if it is deemed to be a public subsidy for a private corporation.
The Reinsdorf agreement calls for an "operating loss reserve account" and an escape clause that could reopen discussions of a Coyotes move in five years. The account essentially draws money from bonds and arena and area revenue (such as parking) to help stave off any deficit and balance the budgets of both the NHL and the franchise. The account will pay the NHL $65 million a year, after which the operating losses will be covered. Whatever hasn’t been scooped up there will go to the city of Glendale.
Ice Edge has already secured a purchase agreement with the NHL — including a similar loss account that generates only $5 million for the team, the rest going to the city — but the league still prefers Reinsdorf's bid due to financing issues. The league requires that no more than half of the total value of the franchise be financed, but tabling a down payment in the range of $70-80 million (the NHL paid $140 million and is seeking $160 million) seems out of the question for Ice Edge.
While details still need to be worked out and bureaucratic channels navigated, it appears likely that the Southwest will still have NHL hockey next season.
