May 6, 2008 :: 1:47pm ET Real-Time Journal:
NHL, Glendale ready for fight Balsillie By David Pagnotta TheFourthPeriod.com

[Toronto, ON] -- Ding, ding ding! Round 3 is about to begin, ladies and gentlemen.

After failing to acquire the Pittsburgh Penguins and Nashville Predators, Blackberry billionaire Jim Balsillie has his sights set on purchasing the Phoenix Coyotes and moving them to Southern Ontario.

First, I must certainly give Balsillie credit. He won't back down; he wants to bring another team to Ontario. And frankly, another team in this market would be a smart move.

That being said, the NHL and the city of Glendale aren't about to roll over and allow things to go ahead as Balsillie would like. Both parties have a huge issue with the fact that Coyotes CEO Jerry Moyes filed the team for Chapter 11 bankruptcy.

According to the Arizona Republic, Moyes did this because it was the only way to void the team's 30-year lease with Glendale.

"He didn't have a lot of choices," Earl Scudder, Moyes' financial and legal adviser, told the paper. "He had gone through extensive marketing efforts and was unable to get offers for the team that would take care of the creditors."

Glendale coughed up $180 million for the $220 million Jobing.com arena that opened in 2003. City officials have confirmed that bankruptcy does allow Moyes to void any penalties.

All parties will be in bankruptcy court tomorrow, and the NHL will argue that only they can determine what's best for their own operations. However, a bankruptcy judge might be forced to overrule the league if the decision is in the best interest of the creditors and offers the best financial relief. Ironically, the league is the second largest secured creditor (which means if money is available, they must be paid first), owed approximately $35 million. The highest secured creditor is SOF Investments, which is associated with MSD Capital. They are owed $80 million.

Balsillie's attorneys will be asking the court to start an auction for the franchise, which would begin in June and end before June 26, the first day of the NHL Entry Draft in Montreal. In order for another bid to exceed Balsillie's $212.5 million offer, they must surpass it by at least $5 million.

The money would be used to pay back the two secured creditors and an additional 40 unsecured creditors. Moyes has the largest claim ($103.8 million).

None of the parties involved have offered to comment much on the situation, outside of their formal press releases.

NHL Commissioner Gary Bettman did, however, indicate he's uncertain if the League's Board of Governors would approve the sale or a move when speaking to reporters earlier today.

"I don't know whether or not he could get approved," he said. "That's, as I said, something I don't get a vote on."

As for Balsillie, what I find most interesting about his bid is the following comment he made: "I am excited to move closer to bringing an NHL franchise to what I believe is one of the best un-served hockey markets in the world."

Un-served hockey markets? Okay, so that would lead me to believe that he doesn't plan on moving the Coyotes to Toronto. (Good, I've never been a fan of a second team in this city)

So, where does that leave us? Hamilton again? They are home to the AHL's Bulldogs. What about his hometown, Kitchener? Well, they have the OHL's Rangers. Perhaps he meant north of the Greater Toronto Area?

Okay, I might be reading a little too much into that comment... but if you want my take (and this is purely my own speculation should this move actually happen): Balsillie will house the team in Hamilton's Copps Coliseum, and pay the territorial rights fee to the Maple Leafs and Buffalo Sabres, until he builds a new state-of-the-art facility (Blackberry Forum) in Kitchener, which is out of the Leafs, Sabres and Detroit Red Wings' territorial zones.

But before we all set ahead of ourselves, the parties must meet tomorrow in bankruptcy court. And after that, we'll all have a much clearer picture as to the fate of the Phoenix Coyotes.

David Pagnotta is the Editor-in-Chief of The Fourth Period Magazine and covers the Toronto Maple Leafs and the NHL for TheFourthPeriod.com. He is also a contributing writer for NBCSports.com and MSNBC. His journals appear throughout the entire season exclusively on TFP.