Designing The Coyotes Mess 2

November 23, 2012

Jerry MoyesYesterday we started running through an odd email sent to all the Glendale city council members and the mayor by “Ricky Gill” regarding the “real” story about the Coyotes and their saga, beginning before Jerry Moyes took the team to bankruptcy court. The email alleges some of the “real” reasons behind the scenes are not what common knowledge or tribal lore suggests. Nearly as soon as I hit the “publish” button, I saw a tweet from Daryl Jones (honcho with the Ice Edge guys) stating “Some of that is just patently wrong.” Neither of us pursued what he believed was incorrect since it really isn’t germane to the argument. I don’t doubt, however, Daryl’s veracity and he certainly knows more about the Coyotes situation at that time and undoubtedly the current situation as well.

While writing the post, I declared my level of confidence in the email allegations with words including:

“Some of these “facts” are completely unsubstantiated and have been supplied by essentially anonymous sources…” and
The allegations made by Gill are interesting if not entirely plausible. Please treat it, for now, as a work of fiction by author “anonymous”.

I am not laboring under misconceptions, I am offering information that has not been available in the press yet had been provided to Glendale city people. The main reason I’m running through these things is to hopefully demonstrate that the protestations of people in the Glendale government that they had no idea “this was going on” is ludicrous. Obviously they had THIS email, whether bogus or not, to pique their interest maybe spark questions. As time goes on, more information will demonstrate that alleged backroom dealings involving the Coyotes and even the building of the arena can’t be described as a “surprise” to some people now claiming ignorance in order to make their case sinking the current arena lease deal with Hockey Partners. No, we’re not speaking about CM Knaack.

To follow through on the Thanksgiving day exercise, though, let’s go through some of the allegations about 2008 while the girls are on their mother/daughter vampire movie outing.

2008 Revisited

Gill alleges that, in Fall 2008, the NHL and Coyotes officials realized that the Coyotes were not viable in Glendale under the existing AMULA (Arena Management, Use and Lease Agreement). Obviously that statement is open for interpretation as many knowledgeable people have maintained that proper team management is all that is necessary for the success of the team in Glendale. These same people, some of whom that have made bids on the team, assert that the management of the team deteriorated steadily from nearly their arrival in Phoenix.

Gill goes on to describe a meeting in September, 2008:

September 2008: NHL General Counsel and then-CEO, Chairman, and Governor of Coyotes Hockey, Jeff Shumway meet and confer with regards to the Coyotes financial situation. The NHL and Shumway agree that Moyes should meet with Glendale and advise Beasley that if Glendale doesn’t provide a subsidy to the team, Moyes will put the team into bankruptcy.

I was not present at that meeting, nor was Brahm Resnik but he blogged about it here. Brahm backs up what Gill says above citing “court documents” meaning documents related to the eventual bankruptcy proceedings. The “mistaken” filing of some of these documents by Jerry Moyes’s attorneys, by the way, resulted in a spanking from the bankruptcy judge and an “apology” from the attorneys. The total offered by the city to a Moyes-owned Coyotes was $12.5M.

October 14, 2008: Meeting in Glendale. The league (Zimmerman) and team present their subsidy demand to the city. The league and team advise the city that if the subsidy is not granted, Moyes will put the team into Chapter 11 and void the AMULA.

Around this time, Ed Beasley contracted with Beacon Sports Capital Partners to take a look at the Coyotes and whether they were a viable product to be marketed. At this point, I believe Jerry Moyes was still under the impression that he would maintain control of the team. It makes sense to think that, in actuality, decisions had already been reached to bounce Moyes out and replace him with somebody with proven effectiveness in the sports business. Their resulting report was eventually forwarded to (at least) John Kaites (to be treated as “highly confidential”) by Beasley on April 15, 2009. Kaites is a key member in the Reinsdorf crew.


Ed Beasley

During what must have been an extremely busy three day visit to Glendale, Beacon thoroughly assessed the Coyotes and their financial situation to prepare their report published early the next year. One interesting tidbit uncovered at the time (or later, I don’t remember) by some reporter (it was probably Resnik, he was working the story hard back then) that got hold of Beasley’s calendar is that the Beacon guys actually had a meeting with Reinsdorf and Kaites. Now, why would this group have a meeting with two guys that had NOTHING to do with the Coyotes? The cynical among us would suspect that either they were providing them with information to help them eventually formulate a bid for the team OR they were receiving marching orders on what the end result report should say so it would benefit Reinsdorf and Kaites. But wait, there’s more.

Why did Beasley choose Beacon, a firm based in Massachusetts to generate the information he was looking for? Seems as if ANOTHER Reinsdorf, Michael, may have provided a recommendation. Michael’s firm, International Facilities Group (IFG) combined with Global Spectrum had the contract to manage University of Phoenix (UOP) stadium. Sarah Fenske from the New Times was all over this relationship “back in the day”. Sarah, by asking Glendale officials, found out that Michael was the guy that recommended Beacon for the job of, as it turns out, making the case for his pops to buy the Coyotes. All of that information is now “a surprise” to all officials remaining in the city? Oh, did we mention that Kaites had a lobbying contract with the OTHER firm running UOP stadium? Sarah maintains that IFG was brought in FIRST by Beasley to do the work Beacon ended up doing, we have no reason to doubt her since she obviously did a ton of work on the Coyotes story.

Later in the court proceedings it became apparent to Moyes that he was getting the bounce. He didn’t like THAT one bit, so managed to leak a few documents of his own and then sic his own Goldwater dogs on the Coyotes. One could characterize his move as simply fighting fire with fire, since Beasley had been apparently been feeding information to Kaites and Reinsdorf all along. The bankruptcy judge saw it differently, but that’s a part of the story for later. Regardless, it’s ironic that the city feigned (there is that word again) outrage for leaking information when their modus operandi was exactly the same thing, only more effective.

November 3, 2008: Meeting at NHL offices in New York. As a follow up to the October meeting, the parties meet again. This time, it is Bettman that tells Beasley that without a subsidy (in Gary speak: “enhanced partnership with the city”) the team will be put into bankruptcy, the lease will be voided, and the team will move. Beasley believes that he can provide concessions ranging from $12-$15MM per year.

November 11-21, 2008: Bettman advises that he can extract even more concessions from Beasley. Moyes and the NHL enter into a proxy agreement. The NHL assumes control of all negotiations with Glendale.

December 2008 – April, 2009: Bettman was able to get Beasley to agree to $20MM per year in subsidies that he could provide without council approval. However, Beasley would not make the deal if Moyes were the owner. Beasley would only funnel the money to the team if Kaites/Reinsdorf owned the team.

By now, Moyes KNOWS he will end up with the short end of the stick on the Coyotes deal if he lets the NHL and Glendale have their way. I have no idea why Gill speculates that Beasley wouldn’t make a deal with the NHL if Moyes were the owner OR why he assumes that the Reinsdorf crew was the only game in town. We could suppose, based on the good old boy network evidence, that it’s possible Beasley (and with NO discussion with his boss the mayor?!?) informed Reinsdorf that he was the guy that would end up with the contract despite whatever other motions the city might go through. I don’t believe Gill had any information beyond supposition to make that claim.

It Gets Worse


ex-Blackberry guy Balsillie

Over the next installments we’ll look at the actual bankruptcy proceedings. The Gill email is slanted toward the Moyes point of view, so you can be sure he won’t mention Jerry Moyes leaking documents to Goldwater Institute and getting caught and sanctioned for it by the court. We WILL mention it, though. Here’s a link to a May 13, 2009 appearance on local TV by Goldwater’s ever smug Carrie Ann Sitren speaking about “Jerry” telling them about proposed subsidies for the team he was already planning to take into bankruptcy. The same Jerry Moyes from the board of Goldwater Insititute.

We can only guess, until somebody talks, about the machinations that went into the run up to the bankruptcy proceedings on both sides. Moyes certainly knew that his days with the club were numbered and that he stood to lose a lot of cash on the deal. He went looking for a way out and found a great potential savior in the Great White North.

I’ve had two excellent turkey sandwiches recently, though, so a nap would hit the spot now. Come back another time, maybe I’ll shift a few more electrons around the ether for some more blogging about the Coyotes mess, including a Coyotes fan’s adventure with the Glendale detectives today that was brought upon him by an internet troll that believes their location is anonymous.