NHL's Coyotes Hit Rough Patch Off The Ice

The NHL Phoenix Coyotes are in bankruptcy court. A Canadian billionaire wanted to buy the hockey team and return it to Canada. But the judge rejected that bid — ruling that the league may decide who it wants to own the team and where it will play. The case was a major test for Glendale, Ariz., which has built itself into a major league sports venue by luring teams from other places.

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Turns out its not easy to take hockey to the desert. On the ice the Phoenix Coyotes are pretty good. Theyve got the best record in their division of the National Hockey League. Off the ice the team is a mess. The Coyotes are in bankruptcy court with their ownership and maybe even their future in Arizona in doubt. NPRs Ted Robbins explains.

TED ROBBINS: Their home opener was a sellout. Granted, the team lowered ticket prices to fill the seats. But fan Chris Appling, who snagged one of the $15 tickets, says the gesture came at an important time.

Mr. CHRIS APPLING: If you have fans, the team will not leave. If you have nobody sitting in the seats - the fans here are the most important thing for this team to stay.

ROBBINS: Low attendance coupled with high costs have made the Phoenix Coyotes a financial disaster. The team lost $79 million over the last two years. In May, things went from bad to worse. The team, owned by Phoenix trucking tycoon Jerry Moyes, filed for bankruptcy. On the same day, Canadian tech tycoon Jim Balsillie offered to buy the team. Balsillie is co-CEO of the company that makes the BlackBerry. But the offer was contingent on a move to a more traditional hockey locale.

(Soundbite of song, O Canada)

ROBBINS: The Hamilton Ontario BlackBerrys? Not if the Phoenix suburb of Glendale has anything to say about it. Glendale built a $180 million arena, and having seen sports teams in other cities leave for greener pastures, tacked on a $550 million penalty if the team moved before its 30 year lease was up.

Pepperdine University Professor Dean Baim is an expert on sports financing. He says bankruptcy was a power play by Moyes to sell the team to Balsillie.

Professor DEAN BAIM (Pepperdine University): The bankruptcy was a way of circumventing the contractual obligations that the team had to Glendale and maybe even to the NHL.

ROBBINS: It worried professional sports so much that the NFL, the NBA and Major League Baseball joined with the NHL in court to oppose the sale to Balsillie. Last month, Judge Redfield Baum rejected Balsillies bid. NHL Vice President Frank Brown called the decision precedent-setting.

Mr. FRANK BROWN (National Hockey League): It affirmed the essential right of not only our sports league but any major professional sports league to determine the complement of ownership and the location of the franchises.

ROBBINS: Theres no guarantee that a court-approved buyer won't move the team, but a number of current potential buyers say they won't. One of the leading contenders is another Canadian company called Ice Edge. Ice Edge executive Daryl Jones thinks the Coyotes can make money in Phoenix.

Mr. DARYL JONES (Ice Edge): Four and a half million people? Yeah, it doesnt take too many hockey fans of that four and a half million to make the team succeed.

(Soundbite of cheering)

ROBBINS: Standing in the crowded arena on opening night, the NHLs Frank Brown says now at least theres the opportunity to try.

Mr. BROWN: That - that noise

(Soundbite of cheering)

Mr. BROWN: compare that to the silence that wouldve happened if the court hadnt ruled the way it did.

ROBBINS: The NHL hopes a new owner for the team is approved soon, an owner who can concentrate on creating a solvent Phoenix Coyotes team and a winning one.

Ted Robbins, NPR News.

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Correction Oct. 21, 2009

We reported that the Phoenix Coyotes were in first place in their division. But owing to a win by the San Jose Sharks, the Coyotes were in second place at the time our story aired.

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