Former San Jose Sharks CEO Greg Jamison, the main suitor for the Phoenix Coyotes for the past year, cannot produce the capital needed to purchase the team from the NHL and as a result a Jan. 31 deadline to maintain a critical lease agreement with the City of Glendale will pass without a deal being completed, multiple sources have told ESPN.com.
A separate group of investors is prepared to step into the void created by Jamison's failure to produce the money he repeatedly insisted he would deliver to complete the deal, but the question is whether Glendale officials will agree to extend the lease agreement to a new group given that it was Jamison who negotiated the terms of the highly contentious lease deal.
It's believed that Mayor Jerry Weiers, who took office after the lease agreement was passed by the previous council, would be agreeable to discussing keeping the team in Glendale with this new group, although it's believed he will want to rework the deal to make it more beneficial for the city.
Under the current lease agreement, the team's owners would receive some $308 million over the life of the 20-year deal to manage the property, an average of slightly more than $15 million annually in management fees.
It is almost certain that when Thursday's deadline passes, Jamison's role in any purchase agreement with the league or lease agreement with the City of Glendale will be at an end.
In a brief telephone conversation Tuesday, Jamison told ESPN.com there wasn't much to say, and he has told media outlets in Arizona that he still was working toward completing a deal. Attempts to reach Jamison on Wednesday were unsuccessful.
Although Weiers was not available for comment, he told the Arizona Republic earlier this week that even though he was not in favor of the lease agreement arranged by Jamison, he would honor it up until Thursday's deadline.
But Weiers told the Arizona Republic he made it clear to Jamison that the city would not honor the lease deal "one second past" the midnight deadline.
The new ownership group, which, according to sources, has arranged for financing that would allow for the purchase of the team from the league at a reported price of $170 million, is hoping to discuss parameters for a new lease agreement in the next few days, perhaps as early as Thursday.
The league has established no deadlines in relation to selling the team, although it's clear a lease agreement between potential buyers and the city is integral to keeping the team in Arizona.
"It's still a work in progress, and we'll see how the week plays out," NHL deputy commissioner Bill Daly told ESPN.com on Wednesday morning.
If this new group and the city cannot come to an agreement on a lease agreement it likely would be the final act in the long drama that has been the Coyotes' ownership sage.
The NHL has owned the team for almost four years and, barring the emergence of a new suitor willing to start from scratch with the City of Glendale on a lease if things fall apart this week, it would seem inevitable the league will begin the process of relocation.
There are a number of options for relocation, although none are clear-cut.
There are plans to build a new arena in Seattle if the proposed sale of the NBA's Sacramento Kings to a group that includes investor Chris Hansen and Microsoft chief executive Steve Ballmer is completed. It's believed the city and Hansen would welcome an NHL owner to share tenancy in a new building.
But the franchise's departure from California isn't guaranteed, and Ron Burkle, co-owner of the NHL's Pittsburgh Penguins, recently met with NBA commissioner David Stern about keeping the Kings in Sacramento.
The northwest city appeals to the NHL on many levels, especially given the potential loss of two large U.S. media markets in Atlanta, which lost the Thrashers to Winnipeg a year-and-a-half ago, and the Coyotes if the deal falls apart in Glendale.
There is also momentum to see a return of NHL hockey to Quebec City, where there are plans for a new NHL-style arena and an ownership group believed to be in place that would be interested in buying the Coyotes for the purposes of relocation.
And the City of Markham, Ontario, just north of Toronto, approved funds to build an NHL-style arena during a hotly contested council meeting Tuesday night.