Saturday, January 10, 2009

Is extinction in the future for the Coyote?

Perhaps the World Wildlife Federation might like to lend a hand to the NHL, there's trouble in the sunbelt and extinction is a very real possibility in a very short period of time.

A pair of Globe and Mail articles over the last couple of days, paints a rather grim picture for the future of the Phoenix Coyote, while the team battles things out for a playoff spot in the West, it could be that more than a few NHL owners might be wishing that their southwest compatriots would just quietly finish off the season and then shuffle off.

Both Stephen Brunt and David Shoalts have been tracking the distress of the Coyotes for a number of months now, but this week added more documentation and if the numbers provided and the details gleaned from them are even close to correct, then things indeed are very dire in the desert for pro hockey.

The team has seemingly been turned over to a financial corporation SOF Investments LP of New York, more in the form of collateral than ownership. which means that they aren't injecting much in the way of cash and are most likely keeping busy and keeping the Coyotes afloat by cashing NHL transition cheques, mostly in the form of pre payment of television rights and revenue sharing monies.

With no realistic sense of a turnaround in the fortunes of the team or the market, one has to wonder how long the rest of the lodge members will want to keep carrying the bags for the Desert dogs. If you read Mr. Brunt’s column you’ll find that the shelf life probably isn’t much longer than the final game of this season, regular season most likely the preference as if you’re paying the bills, you most likely would rather your team make the playoffs than Phoenix we would imagine.

Mr. Shoalts turns to the financial statements for his guidance and things aren’t looking very rosy there for Phoenix either. Quickly becoming wards of the NHL (the league must now be consulted on any trade possibilities or financial transactions) and while they try to continue through the season, layoffs have become a necessity with 18 employees let go so far mainly in the sales, administration and public relations departments.

Shoalts outlines how the Coyotes are on track for losses of over 30 million again this year, a millstone that makes the franchise unattractive for any investor and very well may be sending the team to bankruptcy court by the season's end.

It's seemingly not an alarming situation for the NHL, which still sticks to valuations of the franchise of 142 million dollars, a figure that many observers feel is more of the thing of fantasy hockey pools, than real time economics as far as the current situation in Phoenix is concerned.

The two stories are just another entry in what is becoming a very thick tale of woe from Phoenix, the only questions left are will there be many more troubled entries from the southwest before the end of the season and just as alarming, where might the next trouble spot be in a league that seems to suddenly have come to the Rubicon where these economic times might not be very robust ones for the NHL.

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