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August 06, 2009
Bankruptcy judge: Come one, come all to Coyotes auction
The Phoenix Coyotes soap opera just got much more interesting again yesterday, when bankruptcy court judge Redfield T. Baum announced that any and all bids for the team will be accepted at a September 10 auction, including those from prospective owners who would move the team. And yes, that includes Jim Balsillie, whose offer to buy the team and move it to Hamilton, Ontario Baum rejected in June.
Baum didn't say why he'd changed his mind, but it couldn't have helped that the only two local bidders have started looking more and more troubled in the past week. The lets-play-a-bunch-of-games-in-Saskatoon consortium was already getting laughed at in Canada. Then it was revealed that Jerry Reinsdorf's bid would require the city of Glendale to pay him $23 million next year from a sales tax surcharge, and up to $15 million a year after that, or else the team would be relocated. (This was revealed in court papers filed by current Coyotes owner Jerry Moyes, who favored Balsillie's bid; Moyes is currently facing possible contempt charges for revealing the documents, which the city claims were supposed to be secret.)
The Arizona Cardinals immediately filed papers opposing any tax on their tickets to bail out the Coyotes — or, more to the point, Reinsdorf, who could easily recoup his entire $148 million bid through public tax money — while the Coyotes' biggest creditor, Michael Dell of computer fame, objected to the Reinsdorf bid as well. (Baum specifically cited Dell's opposition in his decision.)
As for what happens at the September auction, all bets are off: Baum has previously agreed that the NHL has the right to approve or deny franchise sales, so there's a significant chance that Balsillie could win the auction, but still be denied the team. And no matter who wins, there are sure to be plenty of lawsuits filed by the losers.
In the meantime, though, Hamilton hockey advocates are singing Burton Cummings songs in celebration — though sadly, not the one about strained Canadian-U.S. relations.
To me, this is a fascinating development.
Could it be that the judge finally has a first-hand example of precisely why leagues that charge tens of millions of dollars for teams to relocate amounts to restraint of trade?
I hope so.
Forcing the Coyotes to stay in Glendale is forcing a company to lose tens of millions of dollars a year. For the life of me, I can't see why that's legal.
Posted by MikeM on August 6, 2009 12:49 PM
Well,
I wouldn't mind seeing the Wile E's move myself, but for several unfortunate events:
the fact that Glendale now has to see a 6 year old building abandonded
the fact that whoever ends up owning and moving will have to pay $700 million to buy out the lease which will surely bankrupt anyone foolish enough to try a move
the fact that assuming Mr Balsillybastard tries to move a month before the season he will not be getting a lot of season ticket money - there just won't be time.
Oh for the days when Charlie Finley can screw up a team the old fashioned way: by not getting fannies in the seats. Waitaminit....isn't that what's happening now?
Posted by Marty on September 1, 2009 03:12 PM