Judge Rejects Both Bids For Coyotes; End Of Line For Balsillie

Balsillie's Bid To Buy And Relocate Coyotes Is Dead

RIM co-CEO Jim Balsillie's bid to buy and relocate the Coyotes is dead. A Phoenix bankruptcy judge ruled yesterday that Balsillie's bid for the team was rejected with prejudice, saying that the court could not overrule the league's right to make membership decisions. In his ruling, Judge Redfield Baum wrote, "This conclusion effectively is the end for the efforts of PSE, Balsillie, Moyes and the Coyotes to force a sale and relocation of the hockey team." The court also rejected the NHL's bid for the team because it failed to offer any money to unsecured creditors Jerry Moyes and Wayne Gretzky. If the NHL remedies that deficiency in its bid, the court will reconsider the NHL's offer. Baum wrote, "In hockey parlance, the court is passing the puck to the NHL who can decide to take another shot at the sale net or it can pass off the puck." The ruling brings an end to a five-month saga in which Balsillie played to nationalist sentiment across Canada as he tried to buy the Coyotes and relocate the team to Hamilton, Ontario. The effort threatened to undermine sports leagues' claims that they could control the sale and relocation of franchises. The judge's ruling effectively upheld those league rights and enables the NHL to keep the Coyotes in Phoenix for the '09-10 season. MLB President & COO Bob DuPuy this morning at the SBJ/SBD Relay Worldwide Sports Sponsorship Symposium in N.Y., said, "We are pleased that the bankruptcy court acknowledged the need of a league to control its operations for the benefit of its fans and for the protection of its franchises" (Tripp Mickle, SportsBusiness Journal). Moyes said of Baum's ruling, "It looks like he is asking the NHL to go back and sweeten the pot. That's the negative of it. Why the hell didn't he say that the first day? That's what didn't make any good sense" (HAMILTON SPECTATOR, 10/1).

OFFICIAL STATEMENTS: Balsillie said in a statement, "From the beginning, my attempt to relocate the Coyotes to Hamilton has been about Canadian hockey fans and Canadian hockey. It was a chance to realize a dream. All I wanted was a fair chance to bring a seventh NHL team to Canada, to serve the best unserved hockey fans in the world. I believe I got that chance. I respect the court's decision, and I will not be putting forward an appeal." Balsillie added, "Nobody can deny that we are now a big step closer to having a seventh NHL team in Canada." Meanwhile, NHL Deputy Commissioner Bill Daly said in a statement, "We are pleased that the Bankruptcy Court has confirmed the League's rights to select its owners and the location of its franchises. We are reviewing the opinion and considering how we can best address the Court's concerns regarding our offer to purchase the Coyotes. It remains our goal to secure the long-term stability of the Coyotes in Glendale" (THE DAILY).

Judge's Ruling Disappointing To Moyes

WIN FOR THE NHL: In Phoenix, Watters & Sanders write the ruling is "looking like a win for Coyotes fans, as it nixed any immediate move to Canada, and for Glendale, which fought to keep the team at Jobing.com Arena, where the city invested millions of dollars." Baum's ruling "did not answer the question of whether a judge could overrule a league," as he said that those issues "had not been fully litigated." Vanderbilt Univ. sports economist John Vrooman "sees the ruling as a significant victory for the NHL and other professional sports leagues that feared the Coyotes could set a precedent for team owners to file for bankruptcy to force relocations against league wishes." Vrooman: "It's a victory for the NHL, clearly. They were under damage control to show they had the ability to control their own house." Meanwhile, Watters & Sanders note an antitrust suit filed by Moyes in U.S. Bankruptcy Court "remains undecided," though the NHL "will seek to dismiss that case" at an October 15 hearing (ARIZONA REPUBLIC, 10/1). In Toronto, Kevin McGran writes Baum siding with the league "about its 'territorial restrictions' was viewed as a landmark victory for sports leagues who have been heretofore powerless to stop renegade owners from switching cities" (TORONTO STAR, 10/1). The GLOBE & MAIL's Waldie & Shoalts write the ruling is a "clear victory" for NHL Commissioner Gary Bettman, who has "bitterly opposed Balsillie." Baum's ruling was a "blow to Moyes," and a Moyes spokesperson last night "called the ruling 'disappointing' and said he was reviewing his options" (GLOBE & MAIL, 10/1). Univ. of Toronto Rotman School of Management Associate Dean Rick Powers said the ruling is a "clear victory for the NHL." Powers: "What the judge is basically saying is he is respecting the monopoly that professional sports teams have on the who and the where (of ownership), and nothing that Balsillie did was going to change his mind." The NATIONAL POST's Fitz-Gerald & O'Connor write the Coyotes' immediate future is "uncertain, with Moyes still the owner in name, but with the NHL footing the bills" (NATIONAL POST, 10/1). Univ. of Vermont law professor and SI.com contributor Michael McCann: "It's a major victory for the NHL and, more generally, it's a major victory for professional sports leagues: maverick prospective owners can't alter the rules at their own choice. This ruling is limited to the NHL, but other leagues had an interest in this case" (EDMONTON JOURNAL, 10/1).

PYRRHIC VICTORY: The GLOBE & MAIL's Stephen Brunt writes Balsillie during the course of the bankruptcy proceedings "skillfully cast [Bettman] as the cartoon villain of the piece." Brunt: "In the end, the 'bad guy' won -- and now he has the near-impossible task of cleaning up a remarkable mess, not just in Phoenix, but among the other franchises that are floundering, that are one or two steps away from heading down the same path in places where the game doesn't run deep, in what is still a fragile economy. But putting those pieces together may be easier than restoring his and his league's credibility in the country that ... drives the NHL business" (GLOBE & MAIL, 10/1). In Hamilton, Steve Milton writes, "If the NHL won, by maintaining the right to make its own decisions about membership, it was a pyrrhic victory, costing as much as it was worth." The league has been "embarrassed by their vagueness in court and their treatment" of Gretzky. But the NHL has been embarrassed "mostly because they decided, by a 26-0 margin, that Balsillie lacks character," after which the league was "bombarded by newspapers and websites running the police lineup of NHL owners who had been approved and then went to jail" (HAMILTON SPECTATOR, 10/1). The NATIONAL POST's Bruce Arthur writes under the header, "No One Wins In Coyotes Ruling." The Coyotes will be the "first NHL team to fail in the United States -- truly fail -- since the league began trying to expand in the early 1990s," and that will reveal "something rather more fundamental about the state of the game, and the state of the league that controls it." The NHL has "won the right to lose money in Phoenix until it can slip the franchise into other hands, and then out of town." But Phoenix was the "canary in hockey's proverbial coal mine, and there will be others." The next one "might be Tampa Bay or Atlanta, Florida or Dallas, Columbus or Nashville," but there "will be a next one, and probably another one after that" (NATIONAL POST, 10/1). In Arizona, Scott Bordow writes, "Even if the NHL eventually satisfies Baum and takes over the Coyotes, the club's future is hardly secure. ... We're no closer to a final resolution than we were back in May" (EAST VALLEY TRIBUNE, 10/1).

Ruling "Blows A Hole" In Proposed C$150M Renovation Of Copps Coliseum

HOLDING OUT HOPE: In Hamilton, Ken Peters writes the city's hopes for a NHL franchise are "in tatters today in the wake of the rejection of the city's latest franchise bid," but Hamilton City Councillor Terry Whitehead and Hamilton Mayor Fred Eisenberger said that the city's "hockey hopes remain alive." Hamilton's "lease pact with Balsillie expires in two weeks," and the ruling "blows a hole in the proposed [C$150M] Copps Coliseum renovation." But Whitehead said, "I think there are a number of teams struggling, that are in trouble, whether it be Atlanta, New York Islanders or Florida. Who knows? We know there are several other teams that are having challenges. In the context of Judge (Redfield) Baum, it is over for Mr. Balsillie. In the context of opportunities, it's far from over" (HAMILTON SPECTATOR, 10/1). Eisenberger: "We are big enough to support a team and I think even the NHL has agreed to that in recent months. That's good news for Hamilton and I still think we're closer to NHL hockey than we've ever been" (HAMILTON SPECTATOR, 10/1).