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Naylor: Glendale keeps Coyotes; Thrashers next for Winnipeg?

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Dave Naylor
5/11/2011 11:52:32 AM
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The Phoenix Coyotes are going to overtime and Winnipeg's emotionally tortured hockey fans can forget for at least a year about the team once known as the Jets coming back to its roots.

In a 5-2 vote Tuesday night, the City of Glendale voted to buy itself another season of NHL hockey by promising to commit $25 million to the Phoenix Coyotes losses if the team can't find a buyer by the end of the 2011-12 season.

If that sounds familiar, it should. Glendale voted to do the exact same thing a year ago but the NHL's hopes of closing a deal with prospective buyer Matthew Hulsizer were scuttled by the threat of a lawsuit by the conservative tax payer group known as the Goldwater Institute.

Meanwhile, Winnipeg's hopes of returning to the NHL are not dead, as the Atlanta Thrashers remain for sale and now become the object of Winnipeg's True North Sports and Entertainment, which has been waiting patiently in the wings.

The Thrashers owners have made no promises about being back in Atlanta next season, where the team has racked up millions of dollars in losses in recent seasons, and may require new investors or a sale to keep the team in Georgia. However, with the calendar moving towards mid-May, any deal between True North and the Thrashers owners would have to be executed quickly for the team to be relocated in time for next season.

As for the Coyotes, Glendale Mayor Elaine Scruggs and a majority of city councilors successfully argued the costs of losing the team would be more damaging than the $25 million expense incurred to keep them for one more season.

Though there was precious little evidence presented to back up that claim, it was a position supported by a majority of citizens who spoke to council Tuesday night.

However, Goldwater Institute lawyer Nick Dranias said it's impossible for the councilors to know whether that's true without having a breakdown of expenses for Jobing.com Arena without the Coyotes as a prime tenant.

Dranias warned council that their actions could be in violation of the state's constitution which prohibits gifting taxpayer dollars to private businesses. But he said Goldwater requires more information before it can make that case conclusively, something it hopes to have by June through litigation against the city.

Would Goldwater sue to try and block the transfer or $25 million to the NHL? It seems unlikely.

"Ultimately, if we're going to challenge the overall deal, we have to think of whether it's wise to challenge a piece of it," said Dranias after the meeting. "I can't make the same promise (to sue) on the $25 million that we did on the deal as a whole. This is a $25 million piece of a deal that could be $200 million."

Though Glendale has bought itself another season, it's debatable whether the NHL's prospects of finding an owner to keep the team in Arizona are any better than they were a year ago. The Coyotes lost nearly $37 million this season while being operated by the NHL and there has been an absence of prospective buyers willing to sink enough of their own money into the $170 million purchase price.

The City of Glendale could end up right back where it was a year ago and one city councilor who voted in favour of the deal, Joyce Clark, warned "If you can't figure this out in a year, I'm done folks!"

If the Thrashers aren't sold to Winnipeg interests in the near future, it's possible the Manitoba capital could be dancing with the Coyotes again next season, for the third consecutive spring.

Tuesday night's result was not the answer hockey fans in Winnipeg were hoping for. And not the permanent solution fans in Arizona wanted.

But after months of wrangling, rumours and speculation, hope for the future of the NHL in both cities remains alive.

Phoenix Coyotes (Photo: Christian Petersen/Getty Images)

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(Photo: Christian Petersen/Getty Images)
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