Are we to truly believe that Glendale, AZ would be terribly hurt by the departing of the Coyotes? They would like us to believe so. Well, looking at their video, you would get the impression there is more to Jobing.com than hockey. You would be right. Jerry Moyes has claimed that the arena could make up lost hockey revenues from more concerts and events, and judging by the attendance at hockey games, and the average ticket price of $39, I would suspect his argument is very valid.
In bankruptcy court, there are specific formulas for a landlord to recoup losses. To quote a clip from Thompson Hine, in October 2007,
“section 502(b)(6) of the U.S. Bankruptcy Code on claims arising from a debtors lease termination does not limit a landlords claim for tort-related damages. Section 502(b)(6) sets limits on the damages that result from the termination of a lease of real property to the greater of one year, or 15 percent, not to exceed three years of the remaining term of such lease. The provision is designed to provide landlords with compensation for losses due to lease terminations, while preventing excessively large claims from long-term leases that would limit the recovery of other unsecured creditors.”
Yes, we know that Jerry Moyes is listed as the aforementioned, unsecured creditor. Wayne Gretzky would be another unsecured creditor. But, Wayne is also an employee of the organization, and as coach, you would hope that his salary would be protected. You would hope.
Glendale seems to like to pull strings, and wants to get records from Wayne Gretzky and Moyes to support their position that they are not truly owed as creditors because they are owners. They want to see the justification for the amounts that are claimed, and I would agree that is fair enough.
But, I would also argue that Glendale has a few issues it needs to address that are far more significant to looking over their shoulder to see who should not get a piece of “their” pie. One, the concessions/subsidies or whatever legalistic, get around Goldwater term they may want to use, needs to be addressed before any of these issues are important. Without concessions, Reinsdorf walks, and it won’t matter. The case would likely be going to September, and the relocation auction. At that point, Judge Baum will determine the share that Glendale will receive based, no doubt, on a similar vein of thinking as quoted above. Judge Baum sure has a chance to send a strong message to the world that sports leagues, as a member of corporate America, have the same rules when it comes to businesses. Trying to control aspects of franchises and franchisee rights, may take a huge hit when Baum is finished with this process.
Second, I would like to see Glendale provide evidence to support the fact that they will not continue to make significant revenues from the events that would take the place of hockey. It is one thing to say you would lose $720 million over the remainder of the lease, but aren’t we forgetting something? That would (possibly) hold true only if the hockey time slots were not replaced with other events. If that was the case, then Glendale would be having two cakes, and being able to eat both of them. Yum for Glendale!
Turning our thoughts to the NHL and Jerry Reinsdorf…..
There is good reason for the U.S. Bankruptcy trustee Ilene J. Lashinsky to have entered the fray. It would seem the NHL has some explaining to do, as things aren’t looking like a ‘fair bid’ is taking place. Could it be the NHL has some plans that only Jerry Reinsdorf could fill? The court may be starting to suspect coercion, and suggestions that strongly dissuaded alternative, interested parties from bidding. That would make sense if you had a ‘plan’ moving forward, that you did not want to have spoiled. On the other hand, an anonymous tip has just shed light on a not-so-well-publicized fact that should be considered important. Could the link between Glendale’s new project and the Chicago White Sox play a role in the favourable negotiations that may be in the works?
On July 22nd and 23rd, the lawyers for Jerry Moyes will be able to deposition Gary Bettman and Bill Daly for four hours on this subject. The NHL has stated they would want to do it to prove a ‘spirit of cooperation’, but I would say that if they didn’t want to do it, it would look incredibly suspicious, wouldn’t you?
The questions still remain based on the facts to date. Why did Reinsdorf suddenly place the 11th hour bid? Why was the bid a ‘no money down’, low risk, high expectation offer? Why is Tony Tavares sitting in the wings? Will Reinsdorf pull out or hang in? Will he decide, as before, this just isn’t worth the price? And, what of son Michael Reinsdorf? Well, it’s a very interesting situation with Michael, as it had been reported that he runs a hockey team already. Isn’t that great? But what is of significance to this story, is that Michael is director of International Facilities Group, LLC, that is on contract to the City of Glendale for advice and direction pertaining to the Jobing.com arena, as described in this article.
And the craziest of all questions, is why is the City of Glendale spending taxpayer money to investigate Moyes and Gretzky, when they need to get their own house in order? They had better be careful, or someone might start questioning some conflicts of interest. I’d like to know who is financing the new project and who holds the Jobing.com bonds.
Well, hold on folks, the coming days and weeks prove to bring more surprises and twists. Agatha Christie would be proud!