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Thursday, February 15, 2001
Gretzky, Ellman complete $88 million deal
Associated Press
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PHOENIX – The Wayne Gretzky era began Thursday for the
Phoenix Coyotes as the former hockey great and developer Steve
Ellman completed their $88 million deal to buy the team.
The closing, delayed by a series of complications lining up
financing, came the day of the NHL's Feb. 15 deadline and months
after the sale was originally supposed to be completed.
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Thu., February 15
There have been whispers that he might pull out of this venture given the problems that have been associated with getting the deal done. But if he didn't truly believe in what he was doing, and his ability to see it through, he would have pulled out long ago.
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Ellman and Gretzky had been given two extensions to wrap up the
purchase.
Had the sale fallen through, former owner Richard Burke would
have been free to keep $26 million that the new owners paid in
advance and sell to someone else. Trucking company executive Jerry
Moyes helped ensure the deal would get done by stepping in as a
partner last month.
The sale solidified the Coyotes' relationship with Arizona.
When Ellman ran into financing problems, there were reports that
Microsoft founder Paul Allen might buy the team and move it to
Portland, Ore.
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Thu., February 15
The Coyotes know Nikolai Khabibulin could be essential to their future, and a goalie like him could be hard to find in a few years. They don't want to just give him up, especially considering Burke could be gone after this season – and they'd be stuck with nothing.
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On the ice, it means a Hall of Fame player with four Stanley Cup
rings will direct hockey operations for a club that hasn't advanced
beyond the first round of the playoffs since 1987.
One of his first decisions involves getting something of value
for a goaltender before the March 13 trading deadline.
Hart Trophy candidate and 2001 All-Star Sean Burke is the reason
the Coyotes are in the playoff hunt. But he is 34, and Nikolai
Khabibulin, six years younger, has promised to end his 1½-year
holdout to play for Gretzky.
Gretzky also has to decide what to do with team scoring leaders
Keith Tkachuk and Jeremy Roenick, whose combined salaries make up
one-third of the team's $39 million payroll.
Tkachuk is coveted by New York Rangers general manager Glen
Sather, who was GM of the Edmonton Oilers when Gretzky played
there. And Tkachuk makes $8.3 million on a team that had to promise
banks to reduce its payroll.
Roenick makes $5 million and will be an unrestricted free agent
this summer, meaning the Coyotes would get nothing for him if he
didn't re-sign with them.
Shawn Hunter, who got the Colorado Avalanche and Coyotes
situated after franchise moves, will stay on as president.
GM Bobby Smith's future has been in question since Gretzky
joined forces with Ellman in late May.
It was originally assumed that Smith would be fired, but he
apparently earned Gretzky's respect by building a strong team on a
relative shoestring budget – and Smith must be paid the rest of his
$2 million salary whether he remains through the season or not.
Burke retained control and kept Gretzky out of the locker room
until the closing, and Gretzky planned to join the team in Raleigh,
N.C., on Friday for his first meeting with the players as an owner.
Despite delays in closing, Ellman's purchase looked solid at the
end.
Asked by bankers to raise $30 million in equity, he went into
the closing with $65 million.
He originally hoped to assume a $60 million loan Burke had with
Societe Generale. But the French bank refused to transfer the debt,
forcing Ellman to borrow from Sumitomo Bank of Japan.
Sumitomo lent just $40 million, and Ellman went back to Societe
Generale for the rest. That resulted in another missed deadline
when Societe Generale asked him to secure a $10 million letter of
credit ½ a dilemma solved by Moyes' entry into the partnership.
There is still potential for snags because of the enmity between
some Scottsdale city leaders and Ellman, who is also supposed to be
building an arena for the team as part of a mall redevelopment
project in the suburb.
Ellman angered the City Council, which controls the life of a
stadium district that could allot $197 million in public money for
the new arena, by letting the project sit while trying to swing the
purchase. That left half-razed mall buildings visible from one of
Scottsdale's busiest intersections for nine months.
Gretzky and Ellman represent the team's third change of
ownership.
The former Winnipeg Jets of the World Hockey Association joined
the NHL in June 1979 under lawyer Barry Shenkarow.
He sold to Burke and Steven Gluckstern for $65 million in
October 1995, and they moved the franchise to Phoenix the next
summer.
Burke, who bought out Gluckstern on Sept. 12, 1997, put the team
on the market last winter, and he and Ellman agreed to a sale price
on April 18.
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ALSO SEE
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AUDIO VIDEO
 Wayne Gretzky says he will not be returning to the ice in a Coyotes uniform.
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