The Chapter 11 bankruptcy filing of the National Hockey League's Phoenix Coyotes follows years of the league's expansion into Sun Belt states, where hockey has no history. The bankruptcy exemplifies that the expansion has more or less been a bust.
However, the $212.5 million offer from Jim Balsillie, founder of BlackBerry maker Research In Motion Ltd. (NASDAQ:RIMM), provides the league a chance to right the wrong, because the Canadian national wants to move the team to Ontario, a cold-weather climate where hockey is the country's past-time.
The Coyotes are the first, and maybe not last, warm-weather team to melt into bankruptcy. Industry observers have previously indicated that several
"nontraditional" NHL teams are facing financial challenges and could be looking for buyers or investors to prevent the same circumstances facing the Coyotes, including:
- The Tampa Bay Lightning,
- The Florida Panthers,
- Carolina Hurricanes,
- Atlanta Thrashers and
- Nashville Predators
Additionally, Tom Hicks is seeking a minority investor to buy a stake in the Dallas Stars.
Meanwhile, the Florida Panthers, which plays in the southern Florida city of Sunrise, may avoid the fate of the Coyotes. The team reportedly has received interest from Sports Properties Acquisition Corp. (AMEX:HMR), a special purpose acquisition company that must execute a deal before 2010. The firm is also reportedly interested in the Canadiens, but because of the Montreal team's profitable history, the bidding is heated and may force the SPAC to look elsewhere.
For more about the history of NHL franchise deals, see The Deal's Hockey Dealwatch. - Matthew Wurtzel
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