Coyotes sale closes with NHL approval
GLENDALE, Ariz. — Throughout the daily drama of the Coyotes ownership saga, George Gosbee obeyed that clichéd sports edict: Never get too high with the highs. Never get too low with the lows.
“For people who aren’t used to these sorts of deals, it can become a bit of a Gong Show where every time the deal goes sideways it’s off and every time progress is made it’s a done deal, but I’m used to mergers and acquisitions — it’s what I do,” Gosbee said. “This was a complex transaction with a lot of moving parts, but I always knew at the end of the day that it was a great deal for the City of Glendale, the team, the team of investors and the NHL. I knew we could get there.”
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They finally did on Monday, when the NHL officially announced the sale of the Coyotes to IceArizona, the group of investors headed by Gosbee and Anthony LeBlanc, with approval from the league’s Board of Governors.
“The National Hockey League believes in Arizona as an NHL market and that these new owners can provide the Coyotes the opportunity to secure a stable, long-term future in Glendale,” commissioner Gary Bettman said in a release. “We thank Mike Nealy, Don Maloney, Dave Tippett, team captain Shane Doan and all the players and staff for consistently going ‘above and beyond’ on behalf of the franchise during this long and complex process. We thank the Coyotes’ devoted fans for their patient, perserverant support. We are extremely pleased that a positive resolution has been achieved for the fans, the city, the Coyotes and the League.”
The Coyotes will introduce the new ownership group at a press conference at 12:30 p.m. Tuesday at Jobing.com Arena. The press conference can be seen live here, and will be broadcast on FOX Sports Arizona later in the day, starting at 5:30 p.m.
The transaction closes the book on a saga that has stretched for more than four years since previous owner Jerry Moyes opted to put the team into Chapter 11 bankruptcy on May 5, 2009.
Critics have noted that IceArizona, formerly known as Renaissance Sports and Entertainment, has a five-year out clause it can exercise if its losses should equal or exceed $50 million over that span, but Gosbee said those predictions don’t concern him.
“Nobody in my group talks about moving or where we would move. Half the guys have financial or real estate interests in Arizona, and some are moving or retiring down there,” Gosbee said, noting he plans to buy a home in the Valley. (His Calgary home was destroyed by recent floods.) “We think the model works, and there are lots of attributes that make Phoenix attractive. I want to own this team for the next 30 to 40 years in Arizona.”
LeBlanc made it clear in a conference call Monday who is responsible for making that happen.
“I think the onus is on us to put the product out there… so that this is no longer a conversation piece,” he said.
LeBlanc said that will include adding staff to the non-hockey areas of the franchise when the owners have had a better chance and more time to assess needs.
Gosbee said there are numerous factors that make the Phoenix market attractive, including its quality-of-life draw to free agents, the untapped corporate sponsorship possibilities and the large population.
“In a city that big, you don’t need as big a percentage of the market share to be successful,” Gosbee said.
But there is also the reality that the new collective bargaining agreement will lift restrictions on how much shared revenue the franchise can reap.
While the amount the Coyotes will receive under the new guidelines hasn’t been confirmed, Gosbee said he believes it is enough — coupled with $15 million the club will receive each year from Glendale to manage the arena, as well as untapped revenue sources such as suite sales and corporate sponsorships — that the team can at least break even very quickly.
“There’s not one thing you can point to, but when you add them up with stable ownership, we think this is a great situation,” said Gosbee, estimating that the team has already sold 10 new luxury suites since Glendale approved the arena-lease agreement on July 2. “Some of the things on that list can fail and we can still be successful.”
Of course, the easiest way to enjoy financial success is to enjoy success on the ice — “win,” as LeBlanc said Monday — and the new ownership group has already made a push to do just that by re-signing general manager Don Maloney, coach Dave Tippett and goalie Mike Smith (four years, $34 million), while also signing free-agent center Mike Ribeiro (four years, $22 millions).
Gosbee said the structure of the deal, which he called the most complex he’s ever worked in 21 years, allowed the club to make such moves.
“What we did is took risks with leverage to make sure we have a lot of cash on the balance sheet to turn this team around over the next few years,” he said. “When you go into distressed substation, unless you’re structured properly to get through the restructuring, you’re making matters worse. The way this deal is structured, I don’t have to go to the bank or a partner for help. I can assume losses for the next three years and I’m still fine.”
That, Gosbee said, will help the franchise achieve its dual bottom lines.
“We budgeted for a bump up in payroll every year for the next four years and again, we think we can because of the way the deal is structured,” he said. “We’re building a stronger, winning organization off the ice, but also a better product on the ice, and that’s where the focus is right now.
“At the end of day, we’re Canadians, We’re passionate about hockey, and we want to win the Stanley Cup.”
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