The side door that Jim Balsillie was trying to use to buy the Phoenix Coyotes and move them to Hamilton has now been closed. The NHL will, no doubt, see Judge T. Redfield Baums decision to prevent Balsillies purchase as a victory. But perhaps it should see it as a trap door. After all, it is now on the hook for funding the Coyoteswho have lost at least US$36 million in each of the last three yearsthrough the 2009-2010 season.
Its not as if the chief judge of the U.S. Bankruptcy Court in Phoenix rejected Balsillie outright. In his 21-page ruling, Baum concluded there were just too many complex issues to resolve the case by Balsillies self-imposed deadline of June 29, 2009. Simply put, the court does not think there is sufficient time (14 days) for all of these issues to be fairly presented to the court given that deadline, the judge wrote.
Balsillie is still in the game and his team certainly put on a brave face after hearing Baums decision last night. Jim Balsillie’s bid to bring a seventh NHL team to Canada continues. We’re still here, stated spokesman Bill Walker. The court did not approve either our approach or the NHLs.
Hardly. Baum sided with the NHL on most issues. For example, Baum wrote that Balsillie and current Coyotes owner Jerry Moyes cannot ignore the fact that the Coyotes have an agreement with the NHL to play games in Glendale. Baum also said antitrust laws do not apply because there isnt a bona fide dispute over relocation yet.
“We’re pleased the court recognized the validity of League rules and our ability to apply them in a reasonable fashion,” stated NHL deputy commissioner Bill Daly. “We will turn our attention now toward helping to facilitate an orderly sales process that will produce a local buyer who is committed to making the Coyotes’ franchise viable and successful in the Phoenix/Glendale area. We are confident that we will be able to find such a buyer for the Coyotes and that the claims of legitimate creditors will be addressed.
Who in their right mind would want to keep the Coyotes in Glendale, Ariz., after getting a good look at the financial mess the team is in? Theres a population base that doesnt care for hockey and probably wont for the foreseeable future. Theres little media coverage and no chance of having a winning team in the near future. And then theres the declining economy, which has taken a bigger chunk out of places such as Arizona than it has elsewhere.
The only logical answer is to move the team, but now it will be done on the NHLs terms. That means big relocation fees, probably higher than what the Coyotes are worth, which is about half of the US$212.5 million that Balsillie was willing to pay.
In the meantime, the court still controls the sale process and an auction will likely be held in September, probably too late for the team to be moved. Baum also invited the NHL and Balsillie to enter mediation on a relocation application and fee.
Baum did not rule on whether Balsillie and Moyes could void the teams arena lease with Glendale, which was claiming US$795 million in damages if the team had moved.
Clearly the court recognized the significance of these issues and the unique interests of the City of Glendale and its taxpayers, the city said in a statement. The court based its decision on the law and facts and not on countless rumors and innuendo regarding this matter.
Of course, cash-strapped Glendale will likely now be pressured by the NHL to reduce the teams rent and taxes to the tune of US$15 million or more. Try and get that one past local taxpayers who have already signaled their disinterest in spending government money on a professional sports team many of them can barely name.
But as it stands now, Balsillie, Moyes, the NHL, Glendale and Hamilton are all losers in this case. Whos the winner? No one.