Chops Less Successful Than Coyotes, Suspended For Next Season

((HT: Des Moines Register/Tom Witosky))

The Iowa Chops ((logo pictured, thanks Des Moines Register file)) hockey franchise has been suspended from operating next season as a result of a violation of the league’s rules, American Hockey League officials announced this morning.

Dave Andrews, AHL president and chief executive officer, said the franchise, which began play in 2005-06 season, has been “involuntarily suspended” from operating in a vote Monday by the AHL Board of Governors.

"The Iowa franchise has unfortunately been unable to remedy certain violations of the provisions of the league's constitution and bylaws," Andrews said.

Andrews declined to cite the specific violation, but the Des Moines Register reported last month that the club had used the franchise as collateral to obtain a loan in March 2008 from a North Carolina branch of Wachovia Bank. Records obtained from Polk County have disclosed the loan amounted to $1.99 million and was used to cover operating costs.

Andrews has said such loans are not permitted under league rules.

Iowa began the season as an affiliate of the NHL’s Anaheim Ducks. Anaheim ended its agreement with Iowa in May, citing a lack of payment on the affiliation contract.

The league’s announcement officially ends any possibility of the franchise playing hockey this winter in Des Moines, but could further complicate an increasingly murky legal situation revolving around the future of the AHL in the city.

The Des Moines AHL franchise has been the cornerstone tenant for the $217 million Iowa Event Center and its loss could result in the public events venue beginning again to run a deficit. Suite leases permit companies that rent suites at a cost from $35,000 to $50,000 annually to end their agreements if an AHL team “permanently ceases” to operate at Wells Fargo Arena.

Nothing in the league’s decision prohibits the team from being sold to another potential owner. The league had the right to terminate the franchise, but chose, instead, to suspend it as a means to prompt either the sale or to have its current owners operate the franchise in compliance with league rules, league officials said.

But a Polk County District Court judge approved an injunction last week keeping the franchise from being moved from Des Moines. That move, if allowed to stand, could prevent the sale.

Polk County officials have hinted that they intend to prevent the sale of the franchise unless the new owners honor a non-relocation agreement signed by the current owners.

The franchise owners, Dallas businessmen Bob and Kirby Schlegel, are attempting to sell the franchise after losing close to $4 million over the past four seasons. The Schlegels, along with minority owner Howard Baldwin, own the Des Moines franchise as owners of DM Hockey Holdings LLC.

Last week, Nick Foley, an attorney representing DM Hockey, said the owners intended to pursue sale of the team and hoped that a legal battle could be avoided. He said county officials had rejected two offers from the team’s owners that would have helped ease the loss of the team and left the club owners with no other choice than to sell the club.

Foley said the owners believe that the franchise will be relocated by whoever buys the team.

Foley declined comment on the league’s action.

What's Bad For Phoenix Is Bad For Des Moines...

What do Phoenix and Des Moines have in common...???

Hockey people who want out and want to move what's theirs...

Example 1: Des Moines Register/Tom Witosky

Witosky buries the lead...

"The Schlegels have said they have a potential buyer at an estimated price of $3.7 million. They have not disclosed the buyer, but many believe Tom Hicks, the owner of the Dallas Stars, is interested.

The Stars, the original parent club of the Des Moines franchise, broke their affiliation agreement last year after three seasons. The Dallas Stars have said they want an AHL team to play in a new arena in a suburb of Austin, Texas."

Which on the surface is fine...
Except... this will be stuck in the courts... it's good give and take...

A judge has barred the Iowa Chops ((somewhat pictured, thanks Insight Advertising)) AHL franchise from moving.

“The issues are clear,” said Michael O’Meara, an assistant county attorney. “By virtue of the non-relocation agreement that the hockey team has with Polk County, they shouldn’t be allowed to relocate the team. We believe that there are events going to happen over the next week that could allow that to happen without an injunction.”

Hutchison issued the injunction, which will be binding on the owners of the Chops, Dallas businessmen Bob and Kirby Schlegel, until the dispute between the club and the county is resolved.

Foley said the Shlegels had no problem with Hutchison’s ruling as long as it didn’t prevent them from trying to sell the team, which he described as “the only viable option.”

The Schlegels contend they should be allowed to sell the team and allow it to be relocated because they have lost nearly $4 million in four seasons here. The Chops’ financial woes surfaced in May when the Anaheim Ducks broke their affiliation agreement, saying the team failed to pay its affiliation fee.

“We don’t have an agreement to lose $1 million a year indefinitely while (arena management firm) Global Spectrum and the county makes money,” Foley said.

Polk County has reported receiving $3.7 million over the past three years from the operation of Wells Fargo Arena, meaning there has not been a deficit at the Iowa Events Center for the past two.

Meanwhile, the Schlegels, in documents filed with Polk County officials, have admitted taking out a $1.9 million loan from Wachovia Bank using the franchise as collateral. The club reported losing $2.5 million in the past two seasons.

“We would be happy to give the team to the county, if, in fact, they would be happy to pay off the creditors. If they think they need an AHL team, they don’t need to look elsewhere,” Foley said.

Foley said there is a possibility that the Schlegels might file for bankruptcy in federal court as a means to pay off nearly $3 million in debt.

“A bankruptcy judge would have to decide whether to allow the franchise to be sold so that the creditors would be paid off or require the non-relocation contract to be enforced. No one would get paid anything if that would happen,” Foley said.

O’Meara agreed that the Chops still could be sold, but insisted that any sale would have to be approved by Polk County and Global Spectrum. O’Meara said the Schlegels agreed they would not transfer ownership of the team without the written consent of the county or Global Spectrum.

So you have owners that want to move a team, and someone who may want to buy...
BUT... and that's why we put it in caps... BUT...

If Hicks tries to be the man Witosky ID'd in his piece, then where in the hell is Hicks Sports Group getting the money...???

Jeff Wilson from the Dallas Morning News relays this fact:

"Multiple internet rumors are saying that the Texas Rangers have failed to meet payroll, borrowed $15 million from MLB and that owner Tom Hicks wants out from under his ownership of the club.

So far, the club has refused comment beyond club spokesman John Blake saying, "no comment on the club's financial situation." A source has confirmed that payroll was met, from the players down through the lowest man on the totem pole.

Several reporters have attempted to reach Hicks, but he has not responded."

Would Hicks Sports Group try a Peter-and-Paul move to swing this action...?

On one hand, you have the Chops trying to be the Coyotes...
Tom Hicks trying to be Jim Balsillie- except for, probably, the "not having the money" part.
And the Des Moines City government being Gary Bettman, not just acting like Glendale.

We rub our collective chin over this one and can't wait to see where it leads...