Gretzky's In On Coyotes Deal

May 26, 2000 / 9:50 PM EDT / CBS/AP

When developer Steve Ellman put $10 million down on the Phoenix Coyotes, he forged the first link what could be a long chain of changes for the NHL team.

Ellman, with retired great Wayne Gretzky as a partner, is peparing to buy the team from Richard Burke and build a new arena in Scottsdale. The buyers transferred the down payment Friday night.

"If I hadn't done this deal, the team was moving out of Phoenix," Gretzky told the Toronto Sun. "I own a piece of the Coyotes and I am really excited about it. It was a such a good deal for me that I couldn't pass it."

Their agreement keeps the team in Arizona and delights Scottsdale officials, but now questions need to be answered regarding plans for construction and operation of the proposed arena, free agents and who will run the front office.

Burke will continue to run the team until the transaction is completed. That is scheduled to take place June 30. Ellman still needs to raise another $90 million to cover the purchase price and an estimated $20 million in operating losses over the next two seasons at America West Arena, a downtown Phoenix facility built for basketball.

Should the deal collapse, the buyers would lose the $10 million deposit. Most observers believe Burke would then sell the team to Microsoft founder Paul Allen, who wants to move the Coyotes to Portland, Ore.

"It's kind of Never Never Land until this gets done," Burke said.

Burke said he is confident the sale will go through, but noted that daily operations won't stop and wait. "We've got some decisions to make."

Indeed. The team needs to decide which free agents it wants to sign, determine whether it can sign holdout goalie Nikolai Khabibulin, and prepare for the June draft.

Burke said the team will be better off financially once it has access to the new money-making opportunities of the planned 18,000-seat arena. Until then, the Coyotes will probably have to work within their current budget restrictions, he said.

Keeping the Coyotes financially competitive is what drove the arena plan and the team's sale, Burke said. "This was the way to get it done."

Without additional revenue, the Coyotes would not be able to challenge conference rivals like the Colorado Avalanche, Dallas Stars and Detroit Red Wings, which have double the payroll, Burke said.

To get the stadium built, Ellman's group must finalize its site plan and secure a zoning approval from the city.

The group also needs to reach a business agreement with the city anits multi-purpose facilities district, including the split of construction and operational costs and how that money will be controlled.

Last fall voters approved a ballot measure giving the city the authority to sell bonds to help build an arena. "It didn't approve a deal," Roe said. "It's our responsibility now to take that approval and craft it into a business deal."

Additionally, the buyers must organize the team's new front office.

Former Edmonton Oilers president and general manager, Glen Sather has a long friendship with Gretzky and the two have talked about their plans for the future, including the Coyotes. However, Sather is believed to be close to taking a position with the New York Rangers.

Gretzky is scheduled to appear at a news conference Wednesday to discuss his role in team operations, but investors have said Shawn Hunter will remain the Coyotes' president.

Jeffrey Hecht, a spokesman for the buyers, said it was too soon to provide more details. "That's all going to be discussed on Wednesday with Wayne."