Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Balsillie v. Bettman Going once, going twice ... Add to ...

dshoalts@globeandmail.com

The long-anticipated climax of the Phoenix Coyotes petered out into what this has been all along - a waiting game.

After yesterday's auction sale concluded on schedule with Jim Balsillie and the NHL offering revised bids, U.S. Bankruptcy Court Judge Redfield T. Baum concluded the session by asking both sides to file written versions of them by Tuesday. The judge will then consider them and pick one. The only sure thing is what the judge said in a hearing more than a week ago - he will issue a decision before the NHL regular season starts on Oct. 1.

More Related to this Story

Baum's decision on the winning bid could also include rulings on a several major legal issues, including some that could have a lasting impact on professional sports. But, as the major creditors of the Coyotes pointed out in throwing their support behind the NHL's $140-million (all currency U.S.) offer instead of the $242.5-million offered by Balsillie, the judge can avoid those difficult decisions by ruling in favour of the NHL.

Balsillie's lawyers countered by telling the judge his offer, even after the NHL sweetened its bid, is the best for the creditors and even if the NHL wins it will probably move the financially crippled team from the suburban City of Glendale within a year.

This was echoed by Coyotes owner Jerry Moyes after the auction concluded, as he unburdened his feelings about his treatment at the hands of the NHL after months of relative silence. He said hockey will never succeed in Glendale, NHL commissioner Gary Bettman's grand plan to spread the league into non-traditional markers in the Southern United States has flopped and bitterly lamented his treatment at the hands of the league after he poured more than $300-million into the Coyotes in an attempt to make them a success in his hometown of Glendale.

"I feel pretty poorly over it, to be honest with you," Moyes said of the process that began about one year ago when he told the NHL he could no longer pay for the club's losses. "I just don't think I've been treated right. I gave it the 100-per-cent try. I feel betrayed by the NHL."

Moyes said there is no future for the NHL in Glendale because even the NHL has admitted the possibility it may have to sell the club within a year to someone who will move it. Keeping it in Glendale, he said, will require large subsidies that a city of 250,000 people cannot afford.

"We spent two years trying to sell this team, trying to make it work in Glendale and it just will not work in Glendale," Moyes said.

"With or without a $25-million [annual]subsidy from Glendale, which I don't think [the city]can do, this team just is not going to be here," Moyes said.

If the NHL wins the auction he said, all that will happen is the city "gets one year of rent and a team for a year and they are going to be faced with exactly the same situation a year from now as they are today - a team that is going to relocate."

The root of the problem, Moyes said, is that 16 years after Bettman took office as commissioner with a promise to turn the NHL from a regional sport to one spread around North America the plan never worked.

"I put plenty of money in it, I put a lot of time in it, I gave it the best try I could," Moyes said. "Hockey will not work in the South. Mr. Bettman's plan is not working out.

"You've got Phoenix, you've got Dallas, you've got Atlanta, you've got Tampa Bay all in trouble. These teams have got to go north where everybody loves hockey."

Bettman had a quick response a few minutes later in the same spot in the courthouse steps when the comments were relayed to him: "What's happened to this team is crystal clear. That is it needs new ownership."

As for Moyes's sense of betrayal, Bettman said, "considering the NHL has been supporting this franchise for the past year when Mr. Moyes was supposed to be, it is quite disappointing."

Moyes also said he had approached the league many times after the court action started in May looking for a settlement only to be rebuffed.

Bettman would not discuss any negotiations he may have had with Moyes. "We only fight when we're forced to. If there was at any point anything worth talking about, we would have done it," he said.

Balsillie, who saw the Coyotes' largest creditor, SOF Investments Ltd., and the committee of unsecured creditors, tell Baum to accept the NHL's bid, was sanguine about his chances. He declined to answer a question about an appeal if his bid was rejected by the court.

"All I want is to bring a team to Southern Ontario, that is my lifelong dream," Balsillie said. "We need a fair shot and a level playing field. I got that today and that was really my only objective.

"I think we put our best offer forward. There was a $100-million [difference from the NHL's]that really looks after all the constituents. I think that is clearly in our favour."

The NHL revised its offer during yesterday's hearing to provide more money for Moyes - as much as $29-million - after initially saying he and Gretzky would not be paid. Balsillie is offering to pay Moyes, whose status as a creditor has yet to be decided by Baum, $62.5-million.

WHERE IS RODIER?

Phoenix - The absence of Richard Rodier from Jim Balsillie's big day is generating almost as much talk around the courthouse as the possible outcome of the BlackBerry billionaire's quest to land the Phoenix Coyotes.

Rodier is the Toronto lawyer who implemented Jim Balsillie's strategy to become an NHL owner and put a team into Hamilton by using the bankruptcy laws. But as the court battle with the NHL moved into yesterday's climax with an auction sale Rodier was in Toronto and listening to the proceedings by telephone.

It was an odd turn of events given that Rodier made it his life's work to study the bankruptcy laws with an eye to forcing the NHL to accept a second team in Southern Ontario.

There was no indication last week of any conflict with the new lawyer on Balsillie's team, anti-trust expert Jeffrey Kessler, who has a big reputation.

But Susan Freeman, one of the lawyers on Balsillie's team, said Rodier was still involved in the fight and there was no falling-out with Balsillie.

David Shoalts

HOW OFFERS STACK UP

JIM BALSILLIE

$80-million - to SOF Investments Ltd. (Michael Dell's hedge fund)

$30.6-million - to secured creditor NHL for financing team

$11.4-million - to unsecured creditors

$50-million - to the City of Glendale

$8-million - to Wayne Gretzky

$62.5-million - to current Coyotes majority owner Jerry Moyes

Total $242.5-million

THE NHL

$80-million - to SOF Investments

$30.6-million - to the NHL to recover cost of running team

$11.4-million - to unsecured creditors

$18-million - to debtors' estate (with 90 per cent going to Moyes)

Also - the NHL waives $15-million of a $30-million guarantee Moyes owes the league

Total $140-million

(All currency U.S.)

Follow on Twitter: @dshoalts

 

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories