CHICAGO (Reuters) - The bankrupt Phoenix Coyotes hockey team is likely to leave Arizona because it has not turned a profit since 1996, analysts said, even though the city of Glendale would like it to stay and keep paying rent.
"Under what set of circumstances could this thing possibly stay in Glendale?" said a sports banker, who asked not to be named because he has done business with NHL teams. "This team is worth less than zero in Phoenix."
The National Hockey League (NHL), which has bid for the team, prefers to keep it in Glendale, Arizona, but the Coyotes are guaranteed only one more year there.
Canadian billionaire Jim Balsillie, co-chief executive of BlackBerry maker Research In Motion Ltd, also offered to buy the team and move it to Ontario, Canada, but on Wednesday, Judge Redfield Baum of the U.S. Bankruptcy Court in Phoenix rejected bids by the NHL and Balsillie. Balsillie does not plan an appeal.
Baum left the door open for the NHL to resubmit its $140 million bid, after rejecting Balsillie's $242.5 million bid, saying it did not protect the NHL's right to select its owners and where teams would play.
Baum called the team's operating losses of more than $270 million from 2004 to 2008 "devastating".
"He's basically given them (the NHL) a road map on how to get the bankruptcy court's approval," said Marc Ganis, president of Sportscorp Ltd, a Chicago sports business consulting firm. "Obviously, the NHL would be foolish not to take the opening."
If the NHL buys the team, analysts said its losses would force a move because Glendale was unlikely to offer the team a deal that would make staying there worthwhile.
It is generally not expected that the NHL would retain ownership of the team for more than a year or two, which could be enough time to find an owner willing to keep it in Arizona.
"One year is a very long time," said David Carter, executive director with the USC Sports Business Institute. "So much could happen in the course of next year."
Many analysts expect the NHL to allow a relocation to protect the value of the franchise.
"There aren't as many markets as you might think," Ganis said.
Ice Edge Holdings LLC, a group of Canadian and U.S. businessmen, had offered up to $150 million for the team and promised to keep it in Arizona. The group subsequently withdrew its offer, but has said it is still interested in the team.
"We are flying to Phoenix early next week to continue our ongoing negotiations with the city of Glendale," Ice Edge's Daryl Jones said of talks about the team's lease arena. "We continue to be very excited by the team's potential."
Despite Ice Edge's interest in keeping the team in Arizona, it is thought that the NHL will let it move.
"This team's going to have to move to Canada, some place in southern Ontario," the banker said. "If the NHL said you have to buy it and keep it in Phoenix, that's a death sentence."
(Reporting by Ben Klayman; Editing by Toni Reinhold)
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