SBD/Issue 242/Franchises

Judge Leaves Door Open For All Interested Coyotes Bidders

U.S. Bankruptcy Judge Redfield Baum yesterday reserved judgment "after another long day of arguments" in the Coyotes case, "leaving the door open for all interested bidders," according to Fitz-Gerald & O'Connor of the NATIONAL POST. Baum: "The court would be very reluctant -- very, very reluctant -- to discourage anybody who wanted to make a bid from doing so." Baum asked all parties to "submit another round of briefs by tomorrow, with the drama shifting to another hearing on Sept. 10, when the court once again endeavours to determine to whom the money-bleeding franchise might be sold." Baum said that he "expects to render a decision before the start of the NHL season" on October 1. Fitz-Gerald & O'Connor note RIM co-CEO Jim Balsillie's eligibility as a bidder, "given the NHL's unanimous vote to reject his application earlier this summer, was one of the most hotly debated issues yesterday" (NATIONAL POST, 9/3). The GLOBE & MAIL's David Shoalts notes Baum "mused several times that his decision could come even later than Sept. 14, the date Balsillie's offer is to expire if a sale has not closed." Baum told one of Balsillie's attorneys that he "should consider amending his bid to take that into account." The NHL also is bidding for the Coyotes, and when Baum asked NHL attorney Shep Goldfein if the league would appeal a losing decision, Goldfein said, "You can count on it your honour. If we cannot choose our partners, we will fight that battle to the highest level we have to." Shoalts notes both the NHL and Balsillie "made financial concessions with their bids, which concerned relocation." The NHL "did it first, opening the hearing with an announcement that if it has the winning bid for the Coyotes and later sells the team to someone who relocates it, the league will give all of the net profit to the team's creditors." Later, Balsillie's attorney Jeffrey Kessler said that Balsillie is "willing to keep the Coyotes in suburban Glendale for one more season under certain conditions." Kessler said that Balsillie "would do so if the NHL would pay half of the team's losses, estimated to be between [$30-40M], for the 2009-10 season." The other condition is that the league would agree "not to appeal a court decision in Balsillie's favour" (GLOBE & MAIL, 9/3).

RELOCATION KEY MATTER: In Hamilton, Ken Peters writes the relocation matter "emerged as the key issue and one that isn't expected to be determined until next week." Baum wants to hear "expert testimony and argument a week from today about whether the bankrupt Coyotes can be relocated to Hamilton." If Baum rules that can occur, then Balsillie "would participate in a sales auction" with the NHL and Ice Edge Holdings, "likely the following day, Sept. 11" (HAMILTON SPECTATOR, 9/3). After the hearing, NHL Commissioner Gary Bettman said that the proposal from Balsillie's PSE Sports & Entertainment to "move the team either before or during the coming season 'shows a lack of respect for the game.'" Bettman: "I think the arguments by PSE on moving the club treats rather frivolously the issues that all sports leagues have. I think it disrespects the game and it disrespects the players and what they have to go through night in and night out to do the great things they do on the ice" (AP, 9/2).

MAPLE LEAF MOTIVATION? In Toronto, Kevin McGran notes the Maple Leafs "haven't said a word since billionaire Jim Balsillie announced his intention to put an NHL team" in Hamilton, but the Maple Leafs are "playing a huge role in the continuing" saga. Discussion of the Maple Leafs and "whether they have a veto to stop Balsillie ... dominated much of yesterday's proceedings." Kessler said that the NHL "acted in bad faith in rejecting" Balsillie's ownership application, "concocting the character and integrity issue to avoid a potential lawsuit from the Leafs." Kessler: "What Toronto has done is make it very clear: 'If you were to allow any team into Hamilton or southern Ontario over our objection, then you will have a massive lawsuit because we think you're violating our constitutional rights.'" NHL lawyers responded in court, calling Kessler's notion "preposterous." Bettman added that the league "doesn't fear a suit by the Leafs" (TORONTO STAR, 9/3).

Writers See No End
In Sight For Balsillie
NO END IN SIGHT: In Toronto, Steve Simmons writes the "obstinate dream of Jim Balsillie ... muddles on with no solution in sight, the only certainty being that the Phoenix Coyotes will not be playing hockey in Hamilton this season" (TORONTO SUN, 9/3). Also in Toronto, Mike Zeisberger writes Balsillie is "quickly reminding us of that old Timex watch commercial: 'Takes a licking, keeps on ticking.'" Zeisberger: "Much to the NHL's chagrin" (TORONTO SUN, 9/3). However, in Montreal, Pat Hickey writes, "Behind all the rhetoric, there is the possibility of a compromise, with Balsillie operating a lame-duck franchise for a year, while he and the National Hockey League hammer out an agreement on a relocation fee" (Montreal GAZETTE, 9/3).

TRYING TIMES: In Toronto, Damien Cox writes, "With summer now gone and training camps about to open, the Coyotes are symbolic of the multi-faceted mess in which the NHL, or the business of the NHL, finds itself with the 2009-10 season less than a month away." The league is "being overwhelmed by multiple quagmires of which the Coyotes are only one," and it is "like the highway to the future is suddenly pockmarked with sinkholes" (TORONTO STAR, 9/3).

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