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September 16, 2009
Glendale council: Help us, NHL, you're our only hope
The Glendale city council endorsed the NHL's bid to buy the Phoenix Coyotes yesterday — which should come as no surprise, as the NHL is the only entity that's expressed any desire to keep the team in town. Though telling outgoing Coyotes owner Jerry Moyes to get lost when he tried to testify for Jim Balsillie's bid was a nice touch.
The most important thing here is that Glendale has now joined most of the other Coyotes' creditors in endorsing the NHL bid, which is likely going to be what sways Bankruptcy Judge Redfield Baum, whose primary goal is to get the best deal for the team's creditors. (That is, if he approves any bid at all.) If so, the NHL has only promised to keep the team in town for one year, at which point if no local owner emerges — which seems pretty damn likely, especially considering the team's, um, fan base — then we get to go through this all over again next year, only with the NHL holding the auction instead of a bankruptcy court. Which means they'd be free to pick an owner based on any criteria they choose, like who they think has the best character, or who is best pals with the commissioner, or who promises to build the snazziest new stadium — nah, that'd never happen.
If Glendale city council had of accepted Balsillie's offer they'd have received $50 million compensation. As it is, if the NHL wins ownership of the team, Glendale will have just one more year of hockey in a near empty arena and then end-up with nothing. They could have applied that $50 million against the $180 million debt they incurred building the white elephant in the desert. Of course, they might want to spend another $10 million and a few years pursuing the NHL through the courts -- but Balsillie's offer was the best offer the city will ever likely see.
There will be so much fallout from this, no matter who wins.
1. Moyes and Goldwater could sue Glendale for any concessions granted to a new suitor (Moyes for not getting these provisions on his watch, Goldwater for the dispensation of taxpayer dollars).
2. Balsillie will sue for antitrust, either now or when the NHL allows the Coyotes to move in a year.
3. Glendale and the NHL could pursue Moyes and Balsillie for damages rendered to the franchise's value and loss of income due to their 'collusion'.
4. Moyes could go after the NHL for costing him $100m in monies from Balsillie.
Less likely: Former cities and franchise owners could go after the league for not going to the same extremes they exhibited for the Coyotes.
If the salary cap is lowered by the impacted performance of the Coyotes this season, the NHLPA might take grievance. MLSE will start a dummy corporation that would operate an expansion franchise in Hamilton. Okay the last one was a joke, but I wouldn't put it past MLSE.