Coyotes To Las Vegas...? A New Episode of CSI...?

((HT: GlobeSports/Shoalts))

A new twist in the ongoing Duel in the Desert emerged yesterday, one that might see the Phoenix Coyotes wind up in Las Vegas in a couple of years - with the NHL's approval.

In a scenario brought to light by a source in Phoenix familiar with the letter of intent - or potential offer, or whatever the NHL is calling the document it has with Jerry Reinsdorf's signature on it - Reinsdorf's autograph is the only thing the owner of the Chicago White Sox and Chicago Bulls will put toward the Coyotes, since any cash will actually be provided by a couple of other would-be owners.

Those fellows, the source said, are movie and television producer Jerry Bruckheimer and Harry Sloan, the chairman and chief executive officer of Metro-Goldwyn-Mayer Inc.

Neither Bruckheimer nor Sloan could be reached for comment.

When asked for comment, NHL deputy commissioner Bill Daly said in an e-mail that such as offer was, variously, "entirely fictitious" and "not accurate" and "comical," ending with "totally untrue."

The source said the Reinsdorf proposal calls for $130-million (U.S.) to be put up to cover what the Coyotes owe their secured creditors. It is also conditional on a substantial annual contribution from the taxpayers of Glendale, the city which owns the NHL team's arena. That amount is said to be between $14-million and $20-million, quite a swallow for a city of about 250,000 people.

In addition, some sort of escape clause will be inserted into the arena lease as part of the negotiations with the city. It would be much like the one the group that "rescued" the Nashville Predators from Canadian suitor Jim Balsillie had put into its lease: If attendance and revenue do not hit certain targets in two years, the team can move.

An exit fee might be paid, but it would be far less onerous than the $700-million called for in the Coyotes' current lease.

If the City of Glendale balks at this - as its politicians have said there will be no subsidies, let alone escape clauses - there are other possibilities. The NHL could agree to take the team back.

The league does have the power to revoke and grant franchises.
And this is where the benefit to Bruckheimer and Sloan comes in, the source said.

But first, the creditors and their money: The creditor at the front of the line is the NHL, which loaned the team $13.4-million and advanced it $31.4-million on its anticipated share of league revenues (from its broadcasting, merchandising, etc.) this season. The second secured creditor in line is SOF Investments LP, a company controlled by computer tycoon Michael Dell and his family, which is owed $79.6-million, according to court documents.

Under this plan, the source said, Bruckheimer and Sloan would be the ones putting up the necessary cash, not Reinsdorf. That payment would cover the NHL.

At present, according to court documents, the Coyotes still owe the league $23.6-million of the advanced money. Presumably, that number will be reduced when the NHL distributes its revenue among the 30 teams in October.

SOF would still receive payments for its loan.

SOL would be current Coyotes majority owner Jerry Moyes, who is an unsecured creditor with $104.4-million at stake.

Then, if attendance in Glendale follows the pattern that reportedly cost Moyes more than $300-million and put the team into bankruptcy court, within two years it will be ready to move. That could happen either through another bankruptcy proceeding or by revoking the franchise and granting a new one.

Presto, the source said, a team turns up in Las Vegas with Bruckheimer at the controls - which is what many in the NHL would like to see anyway. The current problems building a suitable arena in Las Vegas presumably would have been solved in the two years the Coyotes were dying in the desert.

But what about Daly's contention that this version of the Reinsdorf offer is "totally untrue?"

Well, replied the source, invoking the various ways the NHL characterized the Reinsdorf proposal in court filings, it must be remembered that, at this point, it is not an offer.

"It's an expression of interest, with a view to make a letter of intent, which in turn is supposed to lead to a purchase agreement," the source said.

In other words, there are a lot of twists left in the road out of Phoenix.