Phoenix Coyotes Update, part X

Jim Balsillie raised his bid for the Coyotes by $30 million yesterday, to $242.5 million, and offered Glandale, the Phoenix suburb that is home to the team, $50 million to mitigate the negative impact of losing the team. No response from the NHL Board of Governors yet, but I did come across an interesting article in the Globe and Mail from last March.  According to this article, an unnamed former NHL governor estimated thatthe Coyotes had lost “more than $200 million” since 2001, and were expected to lose $25 million to $30 million last year.

The article also contained this hilarious statement:

NHL deputy commissioner Bill Daly said in an e-mail message that the Coyotes’ financial problems are not considered overwhelming and sought to quash rumours that the club came close to missing a payroll.

“I’m not in a position to comment on Mr. Moyes’ personal financial situation or the financial condition of Swift,” Daly said. “I can confirm that we are not concerned about the Coyotes missing payroll, nor have they ever come close to missing payroll.

“I can also confirm that I do not expect the team to file for bankruptcy protection.” A banking source said the Coyotes are talking to Citibank about a loan. Citibank, which is having its own financial difficulties, declined comment through a spokesman.

Yeah right.  And people bust economists for their terrible predictions.  This offer makes the NHL’s bid, and the bid from rival Ice Edge Holdings look even worse.

Jim Balsillie is willing to pay $242.5 million for a financial asset that some people would have us believe is awash in red ink.  Balsillie is, by all accounts, a good businessman.  The success of Research in Motion suggests as much.  Either Balsillie is really a nitwit who is willing to throw good money after bad, the Coyotes will be much, much more profitable in Hamilton than in Phoenix, or somebody is fibbing about the size of the losses incurred by the Coyotes.  What do I think?  Here’s one of my all time favorite quotes from sports business

Anyone who quotes profits of a baseball club is missing the point. Under generally accepted accounting principles, I can turn a $4 million profit into a $2 million loss and I could get every national accounting firm to agree with me.” — Paul Beeston, then a Toronto Blue Jays vice president, now baseball’s chief operating officer, 1979