It will also include a provision guaranteeing current owner Alex Meruelo an expansion team if a new arena is built within five years, a person with knowledge of the deal told The Associated Press on Saturday.
The $1 billion sale is expected to happen between the Coyotes' final game of the 2023-24 season on Wednesday and the start of the playoffs on Saturday, barring unforeseen circumstances, the person said on condition of anonymity because the planned deal has not been announced.
The deal will transfer the franchise's hockey operations first to the NHL and then to Smith, who plans to move the team to Salt Lake City, and Meruelo will maintain business operations to move forward with a planned $3 billion project that will include a new arena in north Phoenix. Meruelo also will continue to own the Tucson Roadrunners, the franchise's AHL affiliate, and plans to move the team to Mullett Arena in Tempe, the current temporary home of the Coyotes.
Once an arena is built, Meruelo will pay back the $1 billion and move forward with the expansion franchise.
Meruelo and NHL Commissioner Gary Bettman are expected to announce the deal at a joint news conference next week once the deal is completed. Coyotes general manager Bill Armstrong traveled to Edmonton on Friday night to inform players and coaches of the team's plans after news of the potential relocation to Salt Lake City were leaked.
"We are focused on a myriad of issues that are unresolved and therefore we are unable to make any official comments at this time," Meruelo said in a statement released on Saturday. "However, you have my commitment that I am going to speak on all of these issues and publicly address all of your concerns as promptly as possible."
The NHL had supported the Coyotes' plan to buy a tract of land at auction to build a new arena, but was hesitant to have the team continue playing at 5,000-seat Mullett Arena, which they share with Arizona State University's hockey team. The Coyotes had hoped to close a deal on the land valued at $68 million by the end of last year before delays pushed the auction until June.
Meruelo has been adamant about not wanting to sell the team and rebuffed numerous offers through the years, but is going through with the deal because he felt it was unfair to the players to continue playing in an arena that's not up to NHL standards, the person said. The uncertainty of the land auction meant the Coyotes couldn't guarantee a new arena was built, which, given the franchise's past struggles finding a permanent home, led the NHL to push Meruelo to seek other options.
Meruelo wanted to keep the Roadrunners and move them to Tempe to keep as much of his business operations in tact as the group works with Phoenix city officials to build the new arena, along with continuing the franchise's youth hockey programs in the state, the person said.
The Coyotes have been on uncertain ground almost since the day the franchise relocated from Winnipeg.
The team shared then-America West Arena with the NBA's Phoenix Suns before moving to Glendale in 2003. When an ownership group that included developer Steve Ellman and Wayne Gretzky ran into financial difficulties, the franchise was sold to trucking magnate Jerry Moyes in 2005.
When Moyes filed for bankruptcy in 2009, the NHL assumed operational control of the franchise and paid its bills for the next four years until the franchise was purchased by a group of Canadian businessmen in 2013. Philadelphia hedge fund manager Andrew Barroway bought controlling interest from that group the next year and the rest of the shares of the team in 2017. Meruelo bought controlling interest from Barroway in 2019.
The Coyotes had a long-term, multimillion deal to play at then-Gila River Arena in Glendale before the city backed out of it in 2015. The franchise had been on an annual lease with Glendale until the city announced it would not renew for the 2021-22 season.
The Coyotes had hoped to build a $2.3 billion entertainment district with a new arena in Tempe, but voters overwhelmingly turned down the referendum last year. The team has played the past two seasons at Mullett Arena.
