Mark Spector

Mark Spector is a columnist for sportsnet.ca

PEBBLE BEACH -- The term "due diligence" has become a bit of a misnomer in the National Hockey League.

William Del Biaggio put the "Boots" to it, you might say, right before he went up the river for eight years for a Ponzi scheme that left investors -- and the other Nashville Predators investors -- high and dry.

So when the boys from Ice Edge Holdings come along and offer to take the flailing Phoenix Coyotes off of the league’s hands for the same US $140 million the NHL paid for the club, it almost appears too good to be true.

And you know what they say about deals that appear too good to be true…

"(Due diligence) is essential," New Jersey general manager Lou Lamoriello said on Tuesday after exiting the National Hockey League’s board of governors meetings. "Buying anything, especially a franchise that’s had problems … only time will tell what the future holds."

Ice Edge comes to the table the same way Del Biaggio did in Nashville, and the current, under-funded ownership group did in Tampa. Both were thoroughly vetted by the league, but due diligence lost out to desperation as the NHL awarded ownership status to people who probably didn’t have the money that NHL governors were told they did.

They won’t make that mistake with Ice Edge Holdings, even if most governors are positively gaga over the prospect of the group taking the red-ink Desert Dogs off of the NHL’s books. There is a strong possibility that the Coyotes leak considerable millions over the next few seasons.

You’ve got to have serious money to operate a loser like the Coyotes. Some governors aren’t sure that the Ice Edge Holdings group has that kind of money.

"We don’t believe that, ultimately, it will have cost us anything to have bought the club, (fought a lengthy legal battle against Jim Balsillie), and sell it," NHL commissioner Gary Bettman said after Day 1 of the meetings. "What I told the governors is our expectations are to get out of it with what we put in."

The holes in that statement to the governors are wide enough to drive a Brinks truck through, however.

Bettman included in his tally the $140 million they paid for the team, and the legal costs from the Balsillie battle. But what of the millions in bills the league paid last season, when then-owner Jerry Moyes walked away from the club? And what of the losses this season?

Then there was this $10 million nugget that came out Tuesday: Bettman favours giving Ice Edge a full share of the revenue sharing pie after this season, should they buy the team, which amounts to somewhere between $10-11 million for a team that likely will not reach any of the four stipulations that the 29 other teams must attain to qualify for a piece of the revenue sharing pie.

That might have the governors asking a few questions when Bettman takes what he calls "a deeper dive" into the Coyotes sale on Wednesday.

And what do the governors think about the Coyotes playing five of their "home" games in Saskatoon? "Something that will require further discussion," was how Bettman termed it.

In the two-and-a-half hour meeting on Tuesday, Bettman and V.P. Colin Campbell did most of the talking with very little discourse coming back from the governors. That should change when they reconvene at 8 a.m. Wednesday morning.

Governors are going to want to know why a tam they’ve supported this long should step ahead of the revenue sharing lineup and take home a full share. Especially when that lineup is getting longer and longer -- which means a full share gets smaller and smaller.

Bettman said that, within a month, he hopes to turn the letter of intent with Ice Edge into a contract. That would exclude the other groups that Bettman says have interest in the Coyotes, and allow the league to begin to investigate the finances of the seven-person Ice Edge group.

With the track record the NHL has had in that area, they’d better get an early start.