Phoenix Coyotes: Down to two

The Phoenix Coyotes appear to have one less potential buyer.

Ice Edge Holdings, a group made up of Canadian and American businessmen, no longer intends to participate in Thursday's auction for the bankrupt NHL team, according to a court filing Tuesday from NHL Commissioner Gary Bettman.

Ice Edge had initially said it would spend up to US$150 million to buy the team and keep it in Arizona, provided the group could work out a new lease arrangement with the city of Glendale.

If Ice Edge does not submit a bid, the field of buyers would narrow to Canadian billionaire Jim Balsillie and the NHL.

Balsillie has the highest bid at $242.5 million, contingent on moving the team to Hamilton.

The NHL bid $140 million to buy the team and keep it in Glendale after its board of governors voted 26-0 with three abstentions against Balsillie as an owner.

So now, it's really Balsillie against Bettman... but because the conflict of interest that the NHL would be by buying the team, Balsillie would win it by default

On the other hand, if Balsillie's bid is rejected by the judge this week, that means the NHL would have won what they wanted: to keep the Phoenix Coyotes where they belong, and not having Balsillie as a owner

Like Green Day sings: Wake me up when September ends...

Well the team will be moved in the next 3 years for sure. If Balsillie wins, it will be in Hamilton. But if Bettman wins, it will in a place like Seattle or Las Vegas

Maybe even Kansas City... three marvelous hockey towns

Everything written here comes from TSN live Court Blog

11:33 Proceedings are about to get under way. Jim Balsillie has arrived along with former CFL commissioner Tom Wright, who wrote the bid proposal...

11:35 In case you missed it this morning, the Balsillie camp will have former NHL GM Doug MacLean on board if the bid is successful...
http://www.tsn.ca/nhl/story/?id=290599

11:38 Court is in session...

11:44 Telecommunications company AT & T has filed an objection over money it is owed. Judge Baum says that he owns stock in AT & T and can't hear the evidence - and jokes that he should remove himself from the hearing!

11:46 NHLPA lawyer wants to make sure all the player contracts are included as part of sale. "So it's no player left behind," said Baum.

11:51 The lawyer for AT & T expressed his concerns about proper insurance for the company and the its sponsorship agreement.

11:54 Both PSE and the NHL reaffirm their bids for the franchise...Baum asks the league reps if the worst case scenario sees the state get $2 million out of the $140 million bid - the NHL side confirms it...

12:01 Baum suggests that the NHL will pay a select group of creditors, while 'less fortunate' creditors will not get paid. League replies that they will take care of the select group or 'fortnunate' creditors. Baum is not happy that a) the state is only getting $2M out of a possible $140M, and b) the league would not be giving money to Moyes.

12:05 Baum says he wants to see who gets paid in the NHL bid and wants to see a schedule of payments to their creditors. League replies that they will provide something.

12:10 Judge Baum adds that he doubts he can approve the NHL bid until he sees a schedule of where the payments will be allocated.

12:17 Baum asks if anyone else besides PSE and the NHL wishes to bid. No reply...

12:19 Former CFL commissioner Tom Wright has taken the oath and will be examined by NHL lawyer Shepard Goldfein.

12:23 Answering Goldfein, Wright says that the team can't work in Phoenix because there's little fan support.

12:27 Goldfein responds by saying the Ice Edge bid suggests that hockey could still work in Phoenix and reveals that Wayne Gretzky was part of the Ice Edge bid (which backed out earlier this week).

12:33 Goldfein also cites that Jerry Reinsdorf's group - and even Moyes himself - think hockey can work in Phoenix.

12:40 Goldfein also mentions clubs that have done well coming out of bankruptcy (ie. Senators, Penguins, Sabres). Wright maintains that the club won't do well financially because the fan support isn't there - no matter how the Coyotes are doing on the ice.

12:46 Goldfein turns the focus to Hamilton, wondering who will pay for the $200M in renovations to Copps Coliseum. Wright say there are no commitments on who will pay.

1:02 PSE now gets its turn at examining Wright.

1:13 Goldfein reveals that Wayne Gretzky agreed to take a $6 million pay cut (from $8M to %2M) to be part of the Ice Edge group. PSE Sports and Entertainment asks Wright if the club could play at Copps right now (without renovations) and Wright says yes. The league asks to have that answer stand and Baum refuses. Wright is off the stand.

1:16 Revision on last entry: NHL wanted the answer stricken.

1:20 Arguments concerning various arena issues are now up for discussion.

1:24 Baum mentions the possibility that neither the NHL or PSE would win the auction, with the chance that no sale goes through.

1:38 "There's third possibility here - no sale," said Baum. "It's more than theoretical. You all ought to keep that in mind."

1:44 They are now on a break

2:05 Court is back in session.

2:08 Lawyer William Baldiga represents the City of Glendale. He says while it's unfortunate that Reinsdorf and Ice Edge are out of the picture, the city backs the NHL over Balsillie. Baum reminds him that the league will likely move the team if they win.

2:09 Baldiga: "Given the two choices that we have, we are prepared to put our lot in with the NHL It's not our preferred choice ... (the NHL bid) gives us the chance to mitigate our harm. We vehemently reject the PSE bid."

2:28 Baldiga and Baum debating the logistics of the lease for the arena and financial penalties associated with it.

2:48 Lawyer’s for the City of Glendale making the following arguments before the judge:
1. Specific performances denied...

2. Uncapped damages

2:49 Judge Baum calls the $794 million claim a "Crystal ball analysis"

2:51 Lawyer argues that the Coyotes can still perform if they stay and continue to play in Glendale

2:59 Lawyer for the City of Glendale: “No one has controverter the $500 million claim by the city.”

3:01 Lawyer continues: If Balsillie’s company PSE wins, the $50 million (or possibly $40 million) is less than 10% of the damages to the city.

3:04 Judge Baum: $50 million today is better than what over the next 24 years of the lease?

3:04 Does the city have an interest?
- Rights of exclusivity is a key to interest

3:05 Jeff Kessler, lawyer for Jim Balsillie is scheduled next.

3:12 Correction Coyotes lawyer Jordan Kroup up.

3:12 Kroup: The "Team" is Coyotes Hockey LLC and the city has now interest in those assets.

3:13 Regarding “Crystal Ball theory.” Damages could be zero if they could find other events to fill potentially just 46 dates.

3:14 Kroup claims there are more dates now with concerts than games.
Judge "are you sure?"
Kroup "no" (laughter)...

3:15 Baum states Jobbing.com Arena is specifically built for hockey and will not work well for basketball as has been suggested.

3:16 Baum suggests that there is a great deal of competition in the valley due to the abundance of concert venues in the area.

3:16 Kroup: "sports teams do not provide economic benefit to municipalities... Not many being built by municipal money"
Baum shoots him down saying they are all being built that way.

3:19 Balsillie relocation fee expert Andrew Zimbalist steps up from audience and discusses how new Yankee Stadium and Citi Field in New York are funded by private investors.

3:28 NHL Lawyer Shep Goldfien questions Zimbalist’s testimony.
He questions on Yankees receiving tax benefits and infrastructure costs from city. Relocation done by majority vote.

3:29 Goldfein does not remember if he read the Canadian Competition Committee's backgrounder which states that no team has exercised a veto.

3:31 Goldfein states that Zimbalist’s testimony was thrown out in a case in Ohio regarding a NASCAR case. Goldfein states that Zimbalist improperly created a methodology in said case and that he is taking advantage of the goodwill that has been developed.

3:39 Goldfein states that a relocation fee should be tied to value of franchise citing the New Jersey Devils paid $8 million or 60 per cent of their value to relocate.

Follows: If Balsillie's bid is $212.5 million, 60% would be approximately $127 million.

3:42 Goldfein to Zimbalist: “Do you know of any other academic journals who use your combination of methodologies to determine a relocation fee?”

3:44 Zimbalist states that his model is something that he has created for this particular case and that it has not been through review yet.

3:45 Zimbalist continues: He did not do statistical tests on growth value of franchise, stating that there was no reason to do them.
Zimbalist is clearly getting frustrated.

4:08 Goldfein believes that the methods being employed could devalue a franchise.
He calls Hamilton a suburb of Toronto and then states that the franchise is worth half of the Maple Leafs. (Forbes estimated the Leafs are worth is $440 million)

4:09 A break for lunch was originally called however Goldfein changed his mind and states that he needs an additional 10 minutes to finish questioning Zimbalist.

4:34 The court is now officially on break.

4:35 Following the break Zimbalist will finish his testimony then the NHL will be given their opportunity to make their case for a relocation fee.
Following that, court will be adjourned for the day.

That's great, they're now discussing on how much $ it will cost to relocate it so Balsillie's team is clearly dominating

SESSION TWO

11:37 Judge Baum has started today's proceedings.

11:47 Jeff Kessler, lawyer for Jim Balsillie says that this process has always been about relocation and that the league realizes it, which is why they will only commit to Glendale for 1 year.

11:48 Kessler also states that the league has kept Balsillie from the stand because they don't want Judge Baum to see his obvious good character.

11:51 Kessler says that the NHL never acted on the relocation application, they instead rejected Balsillie as an owner. That rejection, according to Kessler was not based on good faith and fair dealing.

12:02 Kessler quotes one of the NHL expert witnesses, Franklin Fisher: "It would be economically unreasonable as long as the buyer is willing to pay a reasonable relocation fee". Kessler than says that with no bidders willing to commit to Glendale, if it moves in a year, there are other creditors including current owner Jerry Moyes who would be hurt.

12:10 Kessler continues to point out that the NHL is fighting this fight largely to avoid any further discussions around whether or not the Maple Leafs have a veto. He also states that the NHL’s experts have already stated that Hamilton would be a viable franchise, so viability in Hamilton isn’t an issue.

12:27 Susan Freeman (another of Balsillie's lawyers), explains why the judge has the authority to rule on the bankrupcy code. The judge says the contract is to play the games in Glendale. The 'right' is to say 'I want to relocate' not 'to relocate.' Freeman says they have a right to have that determined (if ownership was approved). Freeman says the NHL can't be involved in the decision because of its position as a bidder. Freeman also said the NHL's motivation is 'spite' and that the NHL is 'blocking something unreasonably.'

12:53 NHL's lawyer Tony Clark: The league has never said Hamilton wasn't a great opportunity, but relocation is not possible for this season, so why rule on something that is incomplete? Baum: If you both don't meet the legal requirements, then I can't approve a sale...Clark's response: "We believe the patient can still live."

Baum: With 15 years in Phoenix, the financial record is not pretty and Reinsdorf and Ice Edge were "just hanging around." Clark: They're still around. They want to see what happens here. If your honour doesn't approve either sale, take our management control team and see what happens.

12:55 Clark: The NHL only has the right to relocate if the governors agree by a majority vote.

1:14 Clark: The main thing being purchased here is the right to be an NHL team. That right comes from those contracts. Where territorial rights are concerned, the league has exclusive rights and grants rights to members to play the league schedule in their areas. Baum cites differences between the league's rules vs. practice. There have been times when the league has dealt with these things on an accelerated program after deadlines. Clark: That has never happened in May of the same year, this late...and in previous cases, discussions had begun before deadlines. He also says the debtors can't sell what they don't own and can't sell a team anywhere other than Phoenix..

1:18 Clark: Any sale must adequately protect the league's interest. The NHL's consent is a huge interest. On the veto: Why would we protect one team at the expense of 29 others? The last thing the NHL wants is to own any team. It's a last resort to help a team survive. Clark also says there is no conspiracy against Balsillie. If Balsillie wants to know why he's been rebuffed, he needs to look in the mirror. He has brought this on himself. To own a team you need to be wealthy and love hockey. Balsillie has both. But you also have to play by the rules - Balsillie hasn't. If he expresses an honest regret, humility and apologizes, maybe he can get 16 owners to give him another chance.

No conspiracy against Jim Balsillie... yeah, right...

2:48 Moyes' lawyer Tom Salerno told Baum that Bettman will questioned on the issue of Balisllie acting in bad faith and will not be cross-examined on the issue of Balsillie's character.

2:54 Bettman is being questioned on how the league suddenly decided to put in a bid to own the team.

2:57 Salerno asks Bettman - who's under oath - about his August 20 statement that the NHL decided as early as June 24 to be prepared to make its own bid for the Coyotes. Bettman says that no decision on a bid had been made by then.

Hmmm... sounds fishy...

As a Phoenix judge continued mulling over who should take control of the beleaguered Coyotes, Canadian billionaire Jim Balsille tried to strengthen his case Monday.

In its latest court filing, the Balsillie camp suggests that NHL teams hold veto rights over their home territory -- something the league has denied in court -- citing a recent interview with Ottawa Senators owner Eugene Melnyk on Toronto radio station The Fan 590.

The veto issue was raised in the Coyotes case because Balsillie's US$242.5-million bid for the team is contingent on a move to Hamilton -- a city that falls within the Maple Leafs territory.

During Melnyk's Sept. 17 radio interview, he noted that he's not allowed to schedule an exhibition game for the Senators at his OHL team's arena in Mississauga, Ont., because it falls in Toronto's territory.

Balsillie's lawyers acknowledged the late timing of the filing, but noted that the admission "might affect which bid should prevail."

Judge Redfield T. Baum presided over an auction for the team on Sept. 11 and has left everyone waiting for a decision ever since. He's deciding between Balsillie's bid or the NHL's offer of $140 million -- although he did raise the possibility that neither side might get the team.

Even though the auction was held more than 10 days ago, it hasn't stopped the flood of court documents. Last week, former Coyotes majority owner Jerry Moyes asked Baum for an emergency hearing to order the NHL to mediate the "key sale issues" in the complicated case.

Baum has said in court that he would love the sides to come together but expressed doubt that such an agreement would be possible.

If this is true, then the league is in deep troubles, because it vehemently stated that they were no relocation issues, nor territorial rights. But then again, why should Ottawa not have the possibility of playing a preseason game in Mississauga?

The more I hear, the more I think that the NHL...

1 - simply doesn't know where it's going
2 - is afraid of Toronto's reply
3 - think is over the law
4 - all of the above

There will be more arguments heard in court before Judge Redfield T. Baum decides who controls the beleaguered Phoenix Coyotes.

Baum has called an emergency hearing for Wednesday to give NHL lawyers an opportunity to present arguments against Jerry Moyes' request that the league be forced to mediate "key sale issues" in the complicated case.

It was expected that the next major development in the Coyotes saga would come in the form of a written ruling from Baum after he oversaw an auction for the team on Sept. 11 but he continues to ponder that decision.

Moyes, who placed the team in Chapter 11 bankruptcy back in May, asked for the emergency hearing in court filings last week after the NHL rejected his request for mediation. The judge granted the hearing on Monday.

The NHL team's former majority owner believes that a session with San Francisco-based mediator Antonio Piazza might produce the best possible result for creditors.

"Considering the amount of fees associated with continued disputes in this court regarding the sale process and what could be a protracted appellate process (depending on how the court rules), the debtors believe that a good-faith effort to arrive at a mediated resolution of the key sale issues would be in all parties' interest," the Moyes filing said.

The NHL and Glendale filed objections on Friday to any mediation. Balsillie's camp submitted a document on Monday in support of it.

The league believes there is nothing worth discussing.

"The NHL board of governors voted unanimously to disapprove Mr. Balsillie as an owner," the NHL said. "As a result, his qualification to become an owner is not something that the NHL can compromise, and it is not something the NHL is willing to mediate."

The issues Moyes would like to see resolved in mediation include the potential transfer of ownership to Canadian billionaire Jim Balsillie, the timing and feasibility of relocating the franchise to Hamilton and the fee owed to the league for such a move.

Baum has said in court that he would like to see the sides come together but doubted that it was possible after everything he had heard and read.

The judge has been mulling over Balsillie's bid of US$242.5 million and the NHL's offer of $140 million. He also raised the possibility that neither side might get the team.

At the auction hearing, the largest unsecured creditor (SOF investments), city of Glendale and the committee of unsecured creditors all spoke up in favour of the league's bid. Moyes was the lone party to back Balsillie.

Like the NHL, SOF opposes mediation, citing the franchise's continued financial losses as it awaits determination of its fate on the brink of the start of the NHL season.

"SOF is gravely concerned that any imposed mediation will unnecessarily delay the court's determination regarding the outcome of the auction and related issues, to the detriment of SOF and other creditors," the company said.

There remains no timetable for a decision on the matter, although Baum has said he hoped to make a ruling before the start of the regular season. The Coyotes are scheduled to play their first game in Los Angeles on Oct. 3.

Even after the end of the auction, court filings have continued -- including a document from Balsillie's lawyers on Monday intended to strengthen his case.

The Balsillie camp filed a submission that suggests NHL teams hold veto rights over their home territory -- something the league has denied in court -- citing a recent interview with Ottawa Senators owner Eugene Melnyk on Toronto radio station The Fan 590.

The veto issue was raised in the Coyotes case because Balsillie's bid for the team is contingent on a move to Hamilton -- a city that falls within the Maple Leafs territory.

During Melnyk's Sept. 17 radio interview, he noted that he's not allowed to schedule an exhibition game for the Senators at his OHL team's arena in Mississauga, Ont., because it falls in Toronto's territory.

Balsillie's lawyers acknowledged the late timing of the filing, but noted that the admission "might affect which bid should prevail."

The league's board of governors voted 26-0 against Balsillie as an owner in July, questioning his character and integrity. The co-CEO of Research in Motion -- the company that makes the Blackberry -- has failed in previous attempts to buy the Pittsburgh Penguins and Nashville Predators.

Even as the team's fate continues to be debated in court, it continues to prepare for the season.

On Monday, the Coyotes hired Dave King as assistant coach and replaced goaltending coach Grant Fuhr with Sean Burke. Fuhr will remain in the organization and work with prospects.

The status of Wayne Gretzky remains unclear.

The team's head coach and managing partner has stayed away from training camp, leaving associate coach Ulf Samuelsson to run things in his absence.

Yawn...

Canadian billionaire Jim Balsillie has pledged to keep the Phoenix Coyotes in Glendale this season if he wins an auction for the financially troubled club.

His lawyers say the club would play in Glendale this season, which opens Oct. 3, but Balsillie still intends to move the team to Hamilton as part of his US$242.5 million bid.

The revised offer came during an emergency hearing Wednesday before bankruptcy Judge Redfield T. Baum, who called Balsillie's proposal "a fairly significant change."

The judge called the hearing on owner Jerry Moyes' request to force the NHL into mediation over contentious issues surrounding the club's sale.

Baum was expected to rule on the mediation issue later in the day.

If this is the last piece of the puzzle from Jimbo to get the team, I think it's now a done deal

For this year, Glendale, for next years, Hamilton... sounds fair enough to me

jimbo loll