So… what is this whole ordeal exactly? Has AM been lying this entire time about the auction or is this a hostile takeover/corporate raiding? Screen cap taken from AZ Sports article detailing Tourigny’s frustration with lack of info
by onitama_and_vipers
7 Comments
my understanding is meruelo would sell to the league and the league would sell to jazz owner. not sure if that’s 100% accurate tho
I don’t think he was necessarily lying about the auction. I think it’s possible an offer he couldn’t refuse came about in the last week or so that changed his perspective. I also think the NHL has lost faith in him either completeing this entirely or completing it on time, so their next best option as a league is to relocate and offer expansion to prevent legal troubles. But wtf do I know
He used the specter of a land sale to wildly drive up the price of the team. No one wants anything to do with him. Smith met his get out price, so he’s getting out. They lied to everyone, front office, coaches, players, fans, everyone. Complete and utter betrayal on every front.
From what I’ve heard and understand the NHL is acting as the mediator for the negotiations between the two owners. I don’t think AM is lying about the auction at all.
I will say that it seems that the auction is still going to happen and the relocation is contingent on the results of the auction. If AM wins the auction the relocation won’t happen, but if he loses it then the team will be moved. The main reason I have for this is the fact that the NHL has made two separate schedules for the Coyotes. One here in AZ and one for Utah.
Meruelo is not selling the team to Smith. He’s selling it to the NHL for 1 billion. Then the league is selling it to Smith for 1.3 billion and the owners of the other teams will split the 0.3 billion between them.
To start, Ryan Smith showed up and made a credible offer to the NHL to buy a franchise. We don’t know when he did this; could’ve been very recently, could’ve been many years ago. Regardless, he’s been wooing the ownership group for quite some time, and has apparently “impressed” Bettman and company. It seemed at first that he was angling to be next in line for an expansion franchise, and he’s likely presented them with all kinds of plans for how he wants to bring the NHL to SLC.
All the while, the NHL felt embarrassed about the Coyotes’ college arena situation, the team didn’t seem to have a solid plan for a new one, and other owners likely ran out of of patience. The league basically had three options to end the embarrassment:
1. Forcibly take over the team, which would be messy legally speaking, probably drag on for years, and potentially tarnish the NHL’s reputation. Even after takeover, a new ownership group would likely have to be found.
2. Make the Coyotes an “offer they can’t refuse.” Similar to option 1, but in a fake “play nice” sort of way where the current owner is essentially bribed to sell.
3. Wait for the Coyotes to make good on their promise to build an arena.
Option 3 was probably the NHL party line until the Tempe vote failed. **Ryan Smith showing up with serious money around the same time then probably put option 2 on the table.** For option 2 to work, the league needed to figure out what it would need to pay AM to walk away, what it would owe the owners in a “relocation fee,” and find a way to get Ryan Smith to pay the sum of those two numbers. The league would buy the Coyotes, then Ryan Smith would buy the Coyotes from the league (mechanically this enabled both “sides” of the negotiation to happen separately). Looks like they landed on $1.3 billion (or $1.2 billion, I’ve heard both floating around) from Ryan Smith, which is more or less the fair market value of the average NHL franchise at the present moment. The owners likely had a very high bar for a relocation fee, because they knew they’d be missing out on Ryan Smith’s future expansion fee otherwise (Vegas paid $500 million and Seattle paid $650 million). So I wouldn’t be surprised if either AM or the owners held up this deal for a while, with perhaps AM wanting an even billion to walk away or the owners not wanting to settle for anything less than $300 million. The Winnipeg group that bought the Atlanta Thrashers only paid $60 million as a relocation fee thirteen years ago, so the owners were for sure angling for a decent chunk of change. There may even be other terms to the deal – like AM’s pseudo-guarantee that he gets another crack at a franchise, or some sort of Utah arena contingency.
But as soon as the NHL worked out a deal where the math worked, things really started moving. This probably happened very recently, hence the flurry of activity and reporting. But it also could’ve happened months ago, with a leak finally getting through near the end of the season. No parties interested in this would want to sabotage it or distract the players midseason (as it could reduce the value of the team).
So net-net, AM bought 95% of the team for $300 million (not sure if Barroway still has 5%) and is selling it for $1 billion, most likely. He’s profiting $700 million plus/minus any additional operating profits/losses he incurred over the timespan, and potentially also getting a second crack at NHL ownership via some “first right of expansion” kind of clause. Was this his plan all along? Was it a total accident he happened to walk right into? No one can know for sure but him.
Fuck em let em leave! I will go to Vegas to catch a game