SBD/Issue 181/Franchises

Coyotes Hearing Underway In Phoenix, Decision Not Expected

Moyes Believes He Can Sell
Coyotes Through Court
The NHL and its position runs "headlong" against bankruptcy policy focused on maximizing value for creditors, said Coyotes Owner Jerry Moyes' attorney Thomas Salerno today in opening a hearing on the future of the Coyotes in U.S. Bankruptcy Court. Salerno said that Moyes believes he can sell the Coyotes and change the owner and the location of the team through the court. Salerno said, "The economic reality is this team has been in Arizona since 1996 and has never made a profit." He objected to the NHL's claim that it can't process a relocation application before the '09-10 season, pointing to the Quebec Nordiques sale and relocation in '95 over the span of less than a month. Judge Redfield Baum, who is hearing the case, at the start of today's hearing said, "I've read everything and I think I've read everything more than once. ... I'm proudly as prepared as I can be." Baum said, "We're not selling a used car here. It's a pretty significant asset. There's a lot at stake." Baum added that he is not a great hockey fan, and said that it is the first time to his knowledge that someone has tried to move a hockey team from the U.S. to Canada and not vice versa. Baum: "It's possible that some of you at a minimum will be unhappy when I rule. And it's quite possible that all of you will be unhappy when I rule." The hearing comes on the heels of RIM co-CEO Jim Balsillie's bid in late May to buy the Coyotes for $212.5M, provided he can relocate the team to southern Ontario -- a move the NHL opposes. Today's hearing on that debate over the team's portability has the potential to alter future transfers of sports franchises. Its importance is underscored by NHL Commissioner Gary Bettman's attendance at today's hearing. It is the first time he has traveled to Phoenix for a hearing since the bankruptcy trial began. Baum has said previously that he doesn't expect to rule from the bench today (Tripp Mickle, SportsBusiness Journal). Baum said that his ruling "will come out before the end of the week" (CTV.ca, 6/9). For updates on the trial, visit SBJ/SBD's Twitter page, and see today's Closing Bell for a recap of the day's events.

STATING HIS CASE: Balsillie Friday on ESPN Radio’s “Tirico & Van Pelt” show said the Coyotes franchise has “lost a lot of money. It has a fairly difficult financial and limited fan base issue for whatever reason there is. The judge has to pay attention to creditors, and I said I’ll look after the creditors if I can put (the team) in a market where it can afford to pay its bills. … If somebody thinks they can get value in Phoenix, top the offer.” Balsillie added, “There are twice as many fans in this southern Ontario area as surveyed as there are in the whole New York area. There are three teams there, and there is one here. So if New York can support three, you could argue that southern Ontario could support six.” Balsillie also discussed the Maple Leafs’ possible objection to a team in southern Ontario, saying, “The Leafs have a huge following and they sell out forever, and will forever. We put a list up for ticket signups and it sold out in a day, so there’s no question the team will do very, very well and continue to do well. I don’t think it’s a principle concern in terms of their gate” (“Tirico & Van Pelt,” ESPN Radio, 6/5).

Attorney Reveals That Maple Leafs Profited From
Exhibition Games Played At Copps Coliseum
DEFENDING THEIR TURF: In Toronto, Kevin McGran notes an issue before the court is whether the Maple Leafs "hold a veto preventing another team from coming to Hamilton." A court document filed by Balsillie's attorney Richard Rodier revealed that the Maple Leafs “earned $150,000” from an exhibition game between the Penguins and Sabres at Copps Coliseum in Hamilton in ’06. The document also stated that the Maple Leafs “profited from games played in Hamilton” in the '80s, and the money was “paid by the promoters as indemnity fees for playing a game in the NHL team’s home territory” (TORONTO STAR, 6/9). The GLOBE & MAIL’s David Shoalts writes if the Coyotes are allowed to move to Hamilton, the Maple Leafs likely “will fight the move with all of owner Maple Leafs Sports and Entertainment’s considerable resources.” Rodier told the court that he “believes the Leafs told Bettman they will sue the NHL if it approves any move ordered by the court and they will sue any other NHL team that plays a game against the invaders” (GLOBE & MAIL, 6/9).

FOLLOW THE RULES: Oilers Alternate Gov. Cal Nichols said, “This is Balsillie’s third attempt to reach his goals and objectives and, you know, I have watched it from a long distance, and he is just going about it in an inappropriate way.” Nichols: “The first thing you do, is you go and do your homework and build your consensus with those who run the league -- Gary (Bettman) and his staff -- or you chip away, one by one, at the board of governors. … It seems to me this is a very bullish way to try and achieve what you want.” The NATIONAL POST's Joe O'Connor notes a prospective owner requires 23 of 30 votes from the NHL BOG, and an NHL exec said of Balsillie, “I am not sure he would have the 23 votes, to be blunt. … Sometimes in life, whether we like it or not, rules are rules. And guidelines are guidelines. And at the end of the day, if there can’t be an acceptance or a realization that certain things have to be followed well, then …” (NATIONAL POST, 6/9). Meanwhile, the GLOBE & MAIL’s Stephen Brunt writes it is “increasingly hard to believe” the court battle involving Balsillie and the NHL is not about personalities. Brunt: “Would it have really come down to this -- a decision by a bankruptcy court judge in Arizona with acres of earth scorched en route -- if it weren’t” Balsillie and Bettman involved? (GLOBE & MAIL, 6/9).

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