After months of espousing its commitment to keep the Phoenix Coyotes in Glendale, Ariz., the NHL appears unsure hockey can work in the desert after all.
In an about-face, the league's bid to purchase the Coyotes out of bankruptcy court specifically mentions it is open to relocating the team.
"By acquiring the team at this time, the NHL will be able to salvage the team's 2009-10 season and can establish a more constructive timetable in which to solicit acceptable offers from qualified parties, including, if a potential buyer wishing to keep the team in Glendale cannot be found, conducting an organized process to relocate the franchise in another territory," the league states in its bid put before the Arizona bankruptcy court.
We respect the court process. We continue to believe Jim Balsillie has the best bid for creditors, fans and for the future long-term prosperity of this franchise. Balsillie spokesman Bill Walker
The league made its bid late on Tuesday, the same day Chicago sports entrepreneur Jerry Reinsdorf withdrew his bid.
The NHL bid mentions nothing about a commitment or desire to keep the team in Phoenix and casts further doubt on the team's viability in Phoenix by stating: "Despite the continuous efforts to facilitate the sale of the Phoenix hockey club to a qualified owner committed to keeping the team in Glendale, the NHL has reluctantly concluded that it is necessary to submit this bid for the NHL to acquire and operate the team."
In its offer, the NHL bids $140-million (all currency U.S.) for the team, plus up to 20 per cent of whatever profit (not to exceed $20-million) the league might earn by reselling the team within two years of the closing date of its purchase from the bankruptcy court.
Since the NHL states in its bid that it "does not anticipate there would be a net profit upon a resale of the team to a Glendale buyer", its own interests, and those of the creditors, would likely be best served by relocating the team to a market where its value could be maximized beyond $140-million.
The league's apparent openness to relocating the Coyotes flies in the face of its commitment to Glendale, dating back to when the team's troubles first surfaced last season and throughout the league's four-month fight with Canadian billionaire Jim Balsillie, the co-chief executive officer of Research In Motion who wants to relocate the team to Hamilton.
Last June, the NHL presented a sworn statement that there were several buyers willing to purchase the team and operate it in Glendale.
"We respect the court process," said Bill Walker, a spokesman for Balsillie. "We continue to believe Jim Balsillie has the best bid for creditors, fans and for the future long-term prosperity of this franchise."
The NHL's bid is contingent on a renegotiated lease with the City of Glendale for Jobing.com Arena, as was the case with Reinsdorf's bid.
The scenario under consideration by the NHL appears similar to that used by Major League Baseball when it purchased the Montreal Expos before the 2002 season. MLB turned a profit three years later by selling the team and allowing it to relocate to Washington.
On Sept. 2, presiding Judge Redfield T. Baum will rule on whether Balsillie will be allowed to participate in a Sept. 10 auction for the team, despite the objections of the NHL, whose board of governors unanimously rejected him as an owner.
One other group intends to participate in the auction. Ice Edge Holdings, a group of Canadian and American businessmen who want to play five Phoenix "home" games in Saskatoon each season, made a $10-million deposit when their bid was filed on Tuesday.
Ice Edge is now the only group not considering relocating the team. It too is hoping to complete a renegotiated lease with the City of Glendale for Jobing.com Arena.
"Ultimately it comes down to the bankruptcy judge and I think keeping the team in Phoenix is something that's important to him," said the group's representative, Daryl Jones. "I think we'll be the best and highest bid on Sept. 10."
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