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September 30, 2009
No sale on Coyotes, but NHL is the winner
And the winner of the Phoenix Coyotes is ... nobody! As threatened earlier this month, Judge Redfield Baum rejected both bids for the bankrupt NHL franchise, ruling that neither Jim Balsillie's plan to move the team to Hamilton over the league's objections nor the league's offer to buy the team itself and search for a new owner met the standards of a bid that was in the best interest of creditors.
If the NHL lost the battle, though, it looks to have won the war. Baum decisively rejected Balsillie's attempt to buy the Coyotes under any circumstances, ruling that the NHL has the right to approve or deny prospective owners, and the league had previously voted unanimously to bar the BlackBerry king. The NHL, meanwhile, will be allowed to revamp its bid to produce more money for outgoing Coyotes owners Jerry Moyes and Wayne Gretzky (which was Baum's main objection to the league bid) — or, presumably, it can sit back and wait for a new crop of non-Balsillie bidders, which is what it wanted all along. Wrote the judge, unable to resist a painful sports metaphor: "In hockey parlance, the court is passing the puck to the NHL who can decide to take another shot at the sale net or it can pass off the puck."
Balsillie has said he won't appeal. So the big question now is: Who'll bid for the Coyotes now that they don't have to compete with Balsillie? The last two bidders promising to keep the team in Arizona — for one season at least — you'll recall were a guy from Chicago who wanted to be paid to play there (and who has a history of shaking down cities for subsidies) and a consortium that wanted the team to split its home schedule between cities 3,000 miles apart. It's always possible someone has been hiding in the woodwork waiting for the price to drop, but at this point, the NHL has got to be shaking palm trees in hopes another Russian billionaire falls out.
Congrats NHL! You fought tooth and nail for a team that will lose $40 million this year (and that is an optimistic estimate). At least now when the league announces 'everything is fine', I will know that is a flat-out lie.
I'm not lawyer but I do have a good BS detector. Shouldn't there have been a ruling by the court regarding the creditors? This being a bankruptcy court with a bankruptcy judge and a bankruptcy hearing taking place? This is essentially a non-ruling and changes nothing. We know Bettman and all the other leagues were throwing their influence around in their own best interest. "We own the league, we own the owners, we own the locations." It seems as though Judge Baum has neglected his call of duty and sided with the more persuasive lobbyists. HE should be investigated for fraud - or in hockey parlance, diving.
Seems to me we're getting closer and closer to the day when the Supreme Court decides this is a restraint of trade.
Anyway, I'd stick around if I were Balsillie. June 2010, when the NHL will be desperate, really isn't that far off. Just keep hanging around; you might even get it for LESS money in June. Maybe not $40M less, but less money is still less money.
By the way, the Maloofs have "committed" to Sacramento. Read the comments; looks like no one's buying their newest story.
In Baum's decision, he danced around the issue of the inside sale provision. The US Supreme Court has ruled that these type of sales like the NHL getting the franchise amounts to a sham sale.
However, as with GM's and Chrysler's bankruptcies, judges can ignore the US Supreme Court on point.
Also, Baum ruled that the NHL has to treat Moyes and the Great One as a creditor. Additionally, he told the NHL either offer more money to Moyes or give up on your offer. However, Baum did not indicate what the number is or when the NHL had to negotiate a new deal with Moyes.
I disagree that the NHL won the war. Bettman won the battle. He kept Basillie out. However, the remaining owners are on the hook for the deal and the franchise's operating expenses.
Look everyone. It's the Expos Part II. Here's the crucial difference. The NHL has four to six zombie owners. Major League Baseball had none when they stole the Expos.
I guess if the Arizona Cardinals were interested in buying the Coyotes they would have done it already.