|May 6, 2008 ::
NHL, Glendale ready for fight
By David Pagnotta
[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
"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
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
"I don't know whether or not he could
get approved," he said. "That's, as I said, something I don't get a
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.
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.
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