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The Globe and Mail

Bettman may have to clean up his own mess

As we await yet another crucial moment in the court of Judge Redfield T. Baum, in which the fate of Jim Balsillie's bid to buy the Phoenix Coyotes out of bankruptcy and move them to Hamilton may again hang in the balance, it is worth stepping back for a moment and marvelling at what a splendid mess this is.

It didn't begin with Balsillie's burning desire to put a franchise in Copps Coliseum or the NHL's resistance to him and his plan. This wasn't set off by Jerry Moyes's performance as an owner, or even the worldwide economic crisis that forced everything to a head.

Instead, it all starts with a simple truth of the marketplace: Big-league professional hockey is an exceptionally profitable business in its core markets, supported by extremely loyal fans, but it will never be viable in Glendale, Ariz.

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Moyes knows that, from painful experience, and Balsillie knows that, having made it his business to study the league's most vulnerable franchises.

Jerry Reinsdorf obviously knows that as well; as the details of his no-cash and almost-no-promises bid leak out, his doubts are written between every line. (The guys who want to play five games a year in Saskatoon have it figured out, too, though they're still a bit short on the details.)

And NHL commissioner Gary Bettman knows it, as do the governors who employ him. They've seen the books. They understand that the Coyotes have never made money in Arizona, and never will. Some years back, one of their number, a former NHL owner with an intimate knowledge of the situation, said that a best-case scenario in Phoenix would mean losing a little more than $20-million a season.

No coincidence, then, that Reinsdorf wants to start off with an annual $23-million subsidy from the city of Glendale, funded in part by a special "voluntary" taxation zone around the arena, with any shortfall to be made up by the city itself, and is also looking for a clear-cut escape clause from the arena lease.

Given that he's a local guy, given that it appears he benefited from an insider relationship with city officials long before Moyes declared bankruptcy, securing promises of concessions while Moyes was left begging, it's safe to assume he knows exactly what he's getting into, and how to get out when the time comes.

Which leaves Judge Baum in a predicament. He doesn't want to wade into the NHL's internal affairs, and he is aware that the owners last week unanimously rejected Balsillie's application to join their ranks. He is loath to set precedents.

But the alternative right now - the Saskatoon group aside - is someone whose offer does little for the creditors, including the largest one, the financing company backed by Michael Dell. The subsidies Reinsdorf is demanding are political dynamite in a place where few are sentimentally attached to the team.

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And with all of the talk from the league about how important it is to keep the Coyotes in Glendale, there's every reason to believe they will be gone in five years in any case.

But Bettman and the NHL have more to worry about right now than Baum letting Balsillie back into the game.

Reinsdorf, who is notoriously publicity shy, and seems to have entered the fray minus any great passion for hockey, is not getting the neat and tidy outcome he desired. He might well be inclined to walk away if this gets any more embarrassing, or turns into a political firestorm.

That would leave the league without its hand-picked alternative to Balsillie, standing alone with a group that appears to be short on capital, and that would have to negotiate a deal with Glendale based on playing more than 10 per cent of the Coyotes' home schedule elsewhere.

Or, it could be worse - the league, denied a patsy, could wind up operating the franchise and absorbing the losses itself, while the aggrieved parties further scorch the earth with lawsuits and countersuits.

That last scenario might at least represent something close to justice.

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He said it could work, knowing that it couldn't. Bettman even claimed in an affidavit there were prospective bidders lining up, hoping to buy the Coyotes, keep them in Glendale and reap the rewards.

Now, he could wind up having the chance to do it himself, on behalf of his lucky employers, who would benefit from any windfall.

Reap away.

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