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November 03, 2009

NHL purchase of Coyotes is final

The Phoenix Coyotes are officially a ward of the league after the NHL finalized its purchase of the bankrupt franchise for $140 million today. (Bankruptcy court judge Redfield Baum gave his blessing to the sale yesterday, as expected.) Coyotes fans celebrated by staying home from the game in record numbers.

Next up: the sale of the team by the NHL to parties unknown, who may or may not keep the team in Arizona. The league says it will look first for local buyers, but only for the next year — and its notion of "local" is, shall we say, flexible.

COMMENTS

Neil:

Do you have any thoughts on the league's "plan" to vacate the lease? I thought it was odd that Baum would approve their ownership absent their acceptance of the lease - particularly when he dismissed Balsillie's offer based on the "unseverability" of the lease from the franchise agreement, amongst other things.

It would seem that this club might be back in bankruptcy court again should 'local' ownership (and lease concessions that Glendale has refused to give) not appear.

Posted by John Bladen on November 7, 2009 03:37 PM

It was my understanding that Baum rejected Balsillie solely on the "you can't buy a McDonald's franchise in Idaho and move it to Times Square" argument, and punted on the lease question. Which is going to make things interesting, yes, given that presumably any new owner is going to ask for lease concessions or look to move.

My guess, based on past precedent, is that there's a good chance Glendale makes the legal issues moot by just caving on the lease in order to prevent any threat of the team leaving. But you'd certainly hope they'd establish in court first whether the lease is still in force or not.

Posted by Neil on November 7, 2009 05:40 PM

I wonder how the discussions would play out regarding the lease with the Arizona Cardinals owner and the city of Glendale if the Cardinals were interested and bought the Coyotes?

Posted by Daniel Francis on November 7, 2009 07:51 PM

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