U.S. court could bypass NHL
http://thespec.com/Sports/article/561105
Bankruptcy judge can ignore NHL rules May 06, 2009
Kevin McGran
Torstar News Service
The NHL wants to keep the Coyotes in Phoenix and intends to fight the bankruptcy proceedings initiated by the team's owner while trying to keep Blackberry billionaire Jim Balsillie out of its exclusive club. League commissioner Gary Bettman, appearing on a sports business panel discussion sponsored by the
Wall Street Journal in New York on Wednesday morning, said the league prefers to fix it problems rather than abandon cities.
"This is not about whether or not we want a franchise in southern Ontario," Bettman said. "This is about league rules."
Some reports had Chicago Bulls owner Jerry Reinsdorf readying an offer to purchase the Coyotes, a move that was scuttled when Coyotes owner Jerry Moyes sought Chapter 11 protection from his creditors, which include the NHL.
In a statement released early Wednesday, Balsillie said he was offering to buy the team for $212.5 million, conditional on relocation of the team to southern Ontario. Balsillie also said he agreed to post debtor-in-possession financing of $17 million.
In response, the league said it has removed Moyes from all positions of authority, and the league says it intends to represent the Coyotes in bankruptcy hearings, which begin Thursday.
The Coyotes haven't turned a profit since Moyes, owner of trucking company Swift Transportation Co., invested in the team in 2001. Annual financial losses have exceeded $20 million in some years. A move to southern Ontario - which could possibly encroach upon the markets belonging to the Toronto Maple Leafs and Buffalo Sabres - would represent a retrenchment for the NHL.
Under Bettman the Coyotes left Winnipeg, where they were known as the Jets, for Phoenix in 1996.
The commissioner stated repeatedly that he has no vote on whether Mr. Balsillie would be approved as an owner - the owners of the league's 30 teams make that decision.
The move to bankruptcy court creates a bidding scenario for Moyes, because the sale of the team would be handled by a judge, not the league.
The court has the right to sell it to any bidder without regard to the NHL's wishes.
"Extensive efforts have been undertaken to sell the team, or attract additional investors, who would keep the team in Glendale," Moyes said in a news release before being relieved of his duties as the Coyotes chief executive officer.
"Creating a process under the supervision of a judge assures that anyone wishing to purchase the team will have the opportunity to bid.
"Likewise, the City of Glendale, which has been very cooperative with efforts to keep the team in Glendale, will be able to provide potential buyers assurances of the city's willingness to offer incentives to keep the team as a tenant in the Jobing.com arena, the lease for which is subject to rejection in bankruptcy. The process assures that the identities of the new owner and the team's location will be known by June 30, 2009, thus enabling the NHL to include the team in its 2009-10 schedule."
Balsillie had made previous failed attempt to purchase the Nashville Predators and Pittsburgh Penguins with the hope of moving them to Hamilton, Ontario.
"The current team ownership asked that I table an offer to purchase the Coyotes and significant discussions resulted in an offer that is in the best interests of the franchise, the NHL, and the great hockey fans of Canada and Southern Ontario," Balsillie said in a statement.
"I am excited to move closer to bringing an NHL franchise to what I believe is one of the best unserved hockey markets in the world - Southern Ontario. A market with devoted hockey fans, a rich hockey history, a growing and diversified economy and a population of more than seven million people."
At the request of the Coyotes ownership, Balsillie said he has also agreed to provide $17 million in financing to allow the franchise to keep going in advance of the sale.
Balsillie's offer does not guarantee that the Coyotes will move. "If others want to come in and there's an offer that is deemed better by the courts, then ultimately that would be a court decision," said Steve Roman, a spokesman for Moyes. "As I understand it, the hope and the plan is that all of this would be dealt with by June 30, 2009. You have a person who has a purchase agreement, but at the same time there could be other players who want to get involved."