The Hamilton Coyotes?
Balsillie offers $212m for bankrupt Phoenix team
May 06, 2009
The Hamilton Spectator
Whether Jim Balsillie ever gets an NHL team for Copps Coliseum, nobody can possibly accuse him of not being persistent.
The BlackBerry billionaire began writing the latest chapter in Hamilton's endless pursuit of a big-league franchise yesterday when he submitted an offer to buy the Phoenix Coyotes for $212.5 million US, conditional upon relocation to southern Ontario. Interesting enough by itself, that news became juicier when the Coyotes declared bankruptcy, possibly freeing them from an otherwise-almost-impossible-to-escape-from lease.
In a news conference late last night in Toronto, Balsillie said, "We believe there's a substantial unserved market in southern Ontario."
When asked if he was targeting Hamilton, he would neither confirm nor deny his favoured location.
However, in a surprise twist to an already surprising story, details emerged last night that the BlackBerry baron isn't the only person trying to bring a team here. Another deep-pocketed investor has been in discussions with the organization that runs Copps Coliseum for some time about that very thing.
"There is another player in the game," says Hamilton Entertainment and Convention Facilities Inc. CEO Duncan Gillespie.
"It is someone whose financial credentials and NHL credentials are bona fide."
That a city with no big-league hockey team may now be the object of desire for one, let alone two, potential owners is a rather shocking development. One that caught most city officials by surprise.
Even Mayor Fred Eisenberger had no idea what was in the works.
"I have to admit we have a meeting set up with some of (Balsillie's) representatives in about a week from now, not knowing at all what the issue was," the mayor said.
"It was just a request to have a meeting and chat. One would jump to that conclusion (it is about Phoenix)."
Rumours persist that several other teams could be on the market.
The New York Islanders might also be for sale - Charles Wang said over the weekend that he regrets ever buying the team because he's been unable to get a new arena.
Nashville could be for sale. Tampa Bay is also reportedly in deep financial difficulty, and Atlanta and Florida might be on the market.
But Balsillie said last night Phoenix is the only purchase he's working on.
"This is the deal I'm focusing on right now."
While the news has some local hearts pumping, what does it actually mean?
Well, like all the previous attempts by Balsillie and previous suitors, the best answer is, who knows?
Copps Coliseum still needs a $150-million facelift to get up to NHL standards. That would appear to be a huge hurdle if a team was to start play here in October.
Gillespie says that's a bit of a red herring though, since most of the work that would be required immediately -- a new score clock, new seats and a few other things -- could be done quickly with the rest completed next summer.
There's the constant and confusing legal issue of indemnification for the Toronto Maple Leafs and Buffalo Sabres that different opinions have pegged at anywhere between zero and $100 million or so.
Then there's the NHL itself. Which always seems to make all the other issues look puny by comparison.
Two years ago, Balsillie was front and centre in a high-profile attempt to buy the Nashville Predators and move them here. That was thwarted when owner Craig Leipold accepted less money from buyers who vowed to keep the team in the Music City. There was a strong belief that the NHL had lobbied to keep Balsillie out of the owners' fraternity because of his very public desire to move a team to southern Ontario, specifically Hamilton.
Before that, Balsillie made an offer to purchase the Pittsburgh Penguins but pulled out before the deal was completed when the league made clear it wouldn't allow him to move the team to Canada.
And just within the past few weeks when rumours spread of a meeting between NHL deputy commissioner Bill Daly and a group of investors interested in bringing a second team to the Toronto area, the league made clear it had no interest in adding another franchise to the area.
Sources familiar with the current situation say they don't suspect anything has changed in that regard and NHL commissioner Gary Bettman isn't about to suddenly throw his support behind this effort. Even the mayor isn't expecting miracles.
"He seems to be committed to it not happening in this part of Ontario," Eisenberger said of the NHL's Bettman.
"I think he's dead wrong. I think this is an absolute perfect hockey scenario and we have got pent up demand that is not being met by Buffalo and Toronto."
So, having tried the gladhanding route and then the highest-bidder route and being shut down with both, Balsillie's latest move seems to indicate a new strategy. With the team now in bankruptcy, there's a sense that perhaps the Arizona courts might award the franchise to the buyer willing to give creditors the best payout.
Balsillie's offer is said to cover all costs for secured creditors.
Then, if he had control of the franchise, the rest could be fought in court if necessary rather than in an NHL boardroom against a commissioner who certainly has given no indication of any love for the BlackBerry boss.
And the bankruptcy appears to dodge the lease obstacle. Those who are following the location and relocations say the Phoenix lease cannot be easily broken.
There are three levels of government tied to that lease and bankruptcy is really the only way to be able to move the franchise.
While Balsillie has been decidedly quieter this time -- he was criticized by some for taking season ticket down payments during his Nashville courtship, leading to suggestions he was being presumptuous and figuratively poking Bettman in the eye with a stick -- he isn't dropping fans from his lobbying strategy entirely.
With this effort, he's asking fans to go to a website called makeitseven.com and e-mail the league demanding a seventh team for Canada.
Last night in Toronto, Balsillie says he's already received thousands of letters of encouragement from fans.
Late yesterday, the league announced it had removed the Coyotes' owner from a authority role and would now be acting for the team in the best interests of its fans and the other 29 franchises.