During last-minute bidding, technology magnate Jim Balsillie sweetened his offer for the Phoenix Coyotes and is now offering $242.5 million for the franchise — more than $100 more than is being offered by the NHL. Will Judge Redfield T. Baum take the bigger offer or bend to the will of the NHL?
During last-minute bidding, technology magnate Jim Balsillie sweetened his offer for the Phoenix Coyotes and is now offering $242.5 million for the franchise — more than $100 more than is being offered by the NHL. Will Judge Redfield T. Baum take the bigger offer or bend to the will of the NHL?
It has been an interesting run as the NHL and Balsillie battles over the Coyotes. Really, the issue isn't the Coyotes franchise: it's the ability of the NHL to determine its own fate and preserve a potentially lucrative market.
Here's the deal: Balsiliie is offering $242.5 million for the franchise, with the plan of moving it to Hamilton, Ontario in 2010-2011. After Jerry Reinsdorf's proposal for a particularly rapacious lease was rejected (rightly) by Glendale officials, he dropped out of the bidding for the team; a mystery contingent pushed by the NHL never materialized, either. That left the NHL left to mount a competing bid for the Coyotes; the plan is to buy the team to leave it in Arizona. The team's largest creditors and the city are for this bid.
But that may not hold as much sway with the bankruptcy court as the NHL assumes. Bankruptcy courts have a very specific mission: extract as much value for the assets as possible. The future of the assets isn't a very big issue: It will not be a huge factor for Judge Baum if Balsillie wants to move the team. The fact that the NHL is working to bar a move of the team should not be a huge factor, either. And, interestingly, owner Jerry Moyes — whose bankruptcy filing launched this process — says the team should go to Balsillie and moved to Hamilton, arguing pro hockey won't work in Phoenix.
In the end, though, this is about the league's ability to preserve Hamilton as a potential market. Sure, the NHL can establish a relocation fee for Balsillie, but anything too high will be seen as punative and unfair. The league stands to make much more money in going through the expansion process for Hamilton or Toronto; that could yield more than a half-billion dollars to divvy up among existing owners. It also allows the league to demand a new facility that could yield far more revenue than a renovated Copps Coliseum. But in the end, it really doesn't address some of the problems facing the NHL in its attempt to stay relevant in the American South, and perhaps the long-term health of the league would be better off if teams like Phoenix and Atlanta were allowed to move, rather than lucrative market like suburban Toronto being held hostage by short-sighted league officials.
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