Bankruptcy Court. Bettman has always told the other 29 NHL owners they will never have to write a cheque to cover the huge losses the league took on the Coyotes fiasco over the last four years, but he was counting on a court win over Moyes to cover a good chunk of the bill. cheap nfl jerseys Most of that money was borrowed, and for the NHL to be paid back in full the Coyotes have to become a runaway success at the gate, something the team has so far managed to avoid in its 17 years in Arizona.
Only a few people know the exact amount the NHL has poured down the sinkhole in the desert after it bought the Coyotes in October of 2009, when Moyes failed to persuade bankruptcy judge Redfield T. Baum (who ruled in his favour last week) to let him sell the team to Jim Balsillie of BlackBerry fame so it could be moved to Hamilton. The court documents in the Moyes lawsuit show it is at least $104 million.
If you’re wondering why Bettman was so stubborn about staying in the Phoenix area, those in the know say it was because of television. When the Atlanta Thrashers became the Winnipeg Jets in 2011, the NHL lost the eighth largest TV market in the United States. With Phoenix ranked No. 12, Bettman did not want to lose another big market.
In listing its damage claims against Moyes, the NHL said it spent $112.7 million covering the Coyotes’ annual losses over the last four seasons a cool $28.1 million per year. Remember that number when we get to the Gosbee LeBlanc financing deal. The NHL also spent $15.1 million paying its lawyers through the bankruptcy court fight, handed over $11.6 million to unsecured creditors of the Coyotes and wants $6.5 million from Moyes to cover what Wayne Gretzky is owed in unpaid salary.
Judge Baum ruled the NHL can’t go after Moyes for the operating losses or what is owned Gretzky. He said he needs more information to decide if Moyes is on the hook for any or all of the $26.7 million paid to the lawyers and creditors but sounded dubious he would rule in favour of the league.
In any event, the league is claiming a total haircut of $145.9 million. Since the NHL paid $128 million to buy the Coyotes and sold them to Gosbee and company this summer for an alleged $170 million, it can claim a gain of $42 million on the deal. That leaves the league out of pocket for $103.9 million.
Now comes the hard part actually collecting that money.
Gosbee and LeBlanc raised $250 million to buy the Coyotes. But they have little skin in the game, as they say, since $205 million of that is borrowed money. Fortress Investment Group, which lends money to distressed businesses at healthy interest rates, provided $120 million with the NHL chipping in $85 million.
Even better for Gosbee and LeBlanc, they do not have to make any payments on the principal of the NHL loan for five years.
Where this gets interesting is figuring out who gets paid first. Some say it is Fortress and that makes sense. It is well acquainted with the Coyotes’ precarious finances, having been one of the team’s lenders when Moyes was the owner.
When NHL deputy commissioner Bill Daly was asked about the NHL’s loan being subordinate to Fortress’s, he said this was “factually inaccurate.” However, it is hard to imagine an experienced distress lender like Fortress which has loaned money to other struggling NHL teams coughing up the biggest loan and then taking a back seat to the NHL when it gets paid.
The gamble by Gosbee and LeBlanc is that they can do what all previous Coyotes owners failed to do sell lots of tickets. This has to happen quickly because they do not have much breathing room.
Based on their financing plan, Gosbee and LeBlanc have $50 million left from the purchase price to cover operating losses. Since the NHL averaged $28.1 million per year in losses, that would give the Coyotes less than two years for a major turnaround.
Granted, the new collective agreement provides more shared revenue for each of the league’s 30 teams, with increased handouts to the poor relatives. http://www.2013newjerseyssupply.com/ But that still does not mean the Coyotes can survive for long if they remain among the bottom 10 revenue teams in the league.
The money the NHL spent on the Coyotes so far has come from the league’s line of credit, so no owner has been asked to write a cheque. But without a financial miracle, the owners may have to or agree to a sharp cut in things like their share of television and other revenue to cover the debt.
One of Bettman’s many skills is keeping the NHL owners in line on this issue, thanks in no small part to the support of the league’s most powerful and feared owner, Jeremy Jacobs of the Boston Bruins. But considering the hardship writing a big cheque will cause some owners, and the general unhappiness of others at parting with their money, trouble lies ahead.
Then again, in five years or even sooner if the magic number of $50 million is reached, LeBlanc and Gosbee could sell the Coyotes to someone in, say Seattle or Las Vegas, for a big whack of cash and everyone goes home happy. Well, everyone except some fans in Arizona.
Compare that to other major hubs: Atlanta (67
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NHL owners might still have to open wallets to cover Coyotes
Bankruptcy Court. Bettman has always told the other 29 NHL owners they will never have to write a cheque to cover the huge losses the league took on the Coyotes fiasco over the last four years, but he was counting on a court win over Moyes to cover a good chunk of the bill. cheap nfl jerseys Most of that money was borrowed, and for the NHL to be paid back in full the Coyotes have to become a runaway success at the gate, something the team has so far managed to avoid in its 17 years in Arizona.
Only a few people know the exact amount the NHL has poured down the sinkhole in the desert after it bought the Coyotes in October of 2009, when Moyes failed to persuade bankruptcy judge Redfield T. Baum (who ruled in his favour last week) to let him sell the team to Jim Balsillie of BlackBerry fame so it could be moved to Hamilton. The court documents in the Moyes lawsuit show it is at least $104 million.
If you’re wondering why Bettman was so stubborn about staying in the Phoenix area, those in the know say it was because of television. When the Atlanta Thrashers became the Winnipeg Jets in 2011, the NHL lost the eighth largest TV market in the United States. With Phoenix ranked No. 12, Bettman did not want to lose another big market.
In listing its damage claims against Moyes, the NHL said it spent $112.7 million covering the Coyotes’ annual losses over the last four seasons a cool $28.1 million per year. Remember that number when we get to the Gosbee LeBlanc financing deal. The NHL also spent $15.1 million paying its lawyers through the bankruptcy court fight, handed over $11.6 million to unsecured creditors of the Coyotes and wants $6.5 million from Moyes to cover what Wayne Gretzky is owed in unpaid salary.
Judge Baum ruled the NHL can’t go after Moyes for the operating losses or what is owned Gretzky. He said he needs more information to decide if Moyes is on the hook for any or all of the $26.7 million paid to the lawyers and creditors but sounded dubious he would rule in favour of the league.
In any event, the league is claiming a total haircut of $145.9 million. Since the NHL paid $128 million to buy the Coyotes and sold them to Gosbee and company this summer for an alleged $170 million, it can claim a gain of $42 million on the deal. That leaves the league out of pocket for $103.9 million.
Now comes the hard part actually collecting that money.
Gosbee and LeBlanc raised $250 million to buy the Coyotes. But they have little skin in the game, as they say, since $205 million of that is borrowed money. Fortress Investment Group, which lends money to distressed businesses at healthy interest rates, provided $120 million with the NHL chipping in $85 million.
Even better for Gosbee and LeBlanc, they do not have to make any payments on the principal of the NHL loan for five years.
Where this gets interesting is figuring out who gets paid first. Some say it is Fortress and that makes sense. It is well acquainted with the Coyotes’ precarious finances, having been one of the team’s lenders when Moyes was the owner.
When NHL deputy commissioner Bill Daly was asked about the NHL’s loan being subordinate to Fortress’s, he said this was “factually inaccurate.” However, it is hard to imagine an experienced distress lender like Fortress which has loaned money to other struggling NHL teams coughing up the biggest loan and then taking a back seat to the NHL when it gets paid.
The gamble by Gosbee and LeBlanc is that they can do what all previous Coyotes owners failed to do sell lots of tickets. This has to happen quickly because they do not have much breathing room.
Based on their financing plan, Gosbee and LeBlanc have $50 million left from the purchase price to cover operating losses. Since the NHL averaged $28.1 million per year in losses, that would give the Coyotes less than two years for a major turnaround.
Granted, the new collective agreement provides more shared revenue for each of the league’s 30 teams, with increased handouts to the poor relatives. http://www.2013newjerseyssupply.com/ But that still does not mean the Coyotes can survive for long if they remain among the bottom 10 revenue teams in the league.
The money the NHL spent on the Coyotes so far has come from the league’s line of credit, so no owner has been asked to write a cheque. But without a financial miracle, the owners may have to or agree to a sharp cut in things like their share of television and other revenue to cover the debt.
One of Bettman’s many skills is keeping the NHL owners in line on this issue, thanks in no small part to the support of the league’s most powerful and feared owner, Jeremy Jacobs of the Boston Bruins. But considering the hardship writing a big cheque will cause some owners, and the general unhappiness of others at parting with their money, trouble lies ahead.
Then again, in five years or even sooner if the magic number of $50 million is reached, LeBlanc and Gosbee could sell the Coyotes to someone in, say Seattle or Las Vegas, for a big whack of cash and everyone goes home happy. Well, everyone except some fans in Arizona.
Charlotte previously worked at ICA as a curatorial intern and
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