Coyotes Saskatoon Games: A "Cash Cow"

((HT: GlobeSports/Shoalts, Waldie))

While even the leaders of a group of Canadian and American businessmen admit their 11th-hour attempt to buy the Phoenix Coyotes is a long shot, they will find an attentive audience when they face the NHL’s board of governors tomorrow in Chicago.

Brian Burke, the president and general manager of the Toronto Maple Leafs, said yesterday the board will listen carefully to Daryl Jones and his partners in Ice Edge Holdings, even though they have not formally submitted a bid to the U.S. Bankruptcy Court, and are still trying to raise money, and want to play five regular-season and some potential playoff games in Saskatoon.

The reason, Burke said, is the group is interested in keeping the Coyotes in the Phoenix suburb of Glendale.

“I believe the primary goal of [the governors] is to find a way to keep the team in Phoenix,” Burke said. “The idea of playing games in another city is unusual but it’s been done before. But I think they will find people listening attentively because they want to keep the team in Phoenix.”

The governors’ executive committee will have a busy day tomorrow.

In addition to taking part in the examination of the Ice Edge group, they will also question Jim Balsillie about his bid for the team and his relocation plans. Balsillie, the co-chief executive officer of Research In Motion Ltd., has offered $212.5-million (U.S.) for the Coyotes on the condition he can move the team to Hamilton.

Burke, who will not be able to attend the governors meeting, said he wants to know more about the plans of Jones and his group before he offers an opinion.

So do other governors, who did not want to be identified but wondered about the wisdom not only of playing in a remote Canadian city but removing five home games from the Coyotes’ schedule and adding the expense of five road games, not to mention the competitive effect that will have on the players. One governor also wonders about the economic effect NHL games will have on the Saskatoon Blades, the city’s junior team in the Western Hockey League.

What is clear is, in the unlikely event the NHL governors agree to let games be played in Saskatoon, they will be expensive for Saskatchewan hockey fans.

Jones said Ice Edge has run the numbers and is convinced the games in Saskatoon can generate millions of dollars in extra revenue for the Coyotes. He said ticket prices for the proposed Saskatoon games would reflect the average price for other Canadian NHL teams, although given the limited number of games the group may have some “incremental pricing power.”

He noted that the Credit Union Centre in Saskatoon is also slated to be expanded this fall to accommodate 15,000 for hockey. Ice Edge has already discussed various scheduling options with arena officials and they are “pretty excited about it,” Jones said.

Jones declined to discuss the Saskatoon revenue projections in detail. But sources said the group hopes to average about $1.2-million (Canadian) in ticket sales for the five games thanks to the arena expansion.

That still works out to an average ticket price of $80, which is within shouting distance of the average ticket price of the Maple Leafs, which is more than $100.

The average ticket price in Phoenix is $37.45 (U.S.), more than $12 below the NHL average, according to court filings. Ice Edge also expects to earn some extra cash from added sponsorships and merchandise sales in Saskatoon.

“We’ve accounted for additional travel costs and we think the way it fits into the schedule would still make this very economical,” Jones added. “We think the reality is you do generate incremental cash flow in Saskatoon.”

The plans are to incorporate the Saskatoon games into road trips to Western Canadian cities to minimize expenses.

Toronto promoter John Graham owns the rights to NHL games in Saskatoon. He put together a visit in September by the New York Islanders, who will hold part of their training camp in Saskatoon, but it has nothing to do with the Coyotes.

Graham declined to comment yesterday other than to say he was advised by city officials about the plans a few days ago. “I’m just waiting to see what happens,” he said.

Jones admitted Ice Edge still has a long way to go before finalizing its bid. It needs NHL approval for the Saskatoon games and the City of Glendale to approve a new lease for the Jobing.com Arena where the Coyotes play. Ice Edge is also still working on arranging financing.

“If we don’t have the capital that makes us feel comfortable we’re not putting in a bid on this,” he said. “We’re not going to do it if it doesn’t make sense.”

The group is also well aware of the financial challenges facing the Coyotes, which have never made money according to court filings. Ice Edge is basing its plans on a presumption the club loses $32-million (U.S.) on operations. That is slightly higher than the club lost on operations last season. He said the Saskatoon games, while a key part of the overall plan, are just one of several sources of extra revenue.

One NHL governor, who did not want to be identified, wondered if the group hopes to sell any of the Saskatoon games to a Canadian television network.

Jones said that has not been discussed yet.

Here's coverage of the Phoenix-Saskatoon Coyotes from the Saskatoon Star-Phoenix with David Hutton and Cory Wolfe leading the way...

And the coverage of the Halifax side of the ledger- with an interesting connection to the Coyotes in Bobby Smith- in the National version of the Globe and Mail. Oliver Moore gets to write that one for you...