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Bench Warmer
A bankruptcy judge has raised the possibility of rejecting both bids to buy the Phoenix Coyotes.
Judge Redfield T. Baum made the comment on Thursday as the two-day auction of the team began.
Baum called the possibility "more than theoretical."
Canadian billionaire Jim Balsillie has made a bid contingent on moving the team to Hamilton, Ontario, over the overwhelming opposition of the NHL.
The other bid is by the NHL, which says it will resell the team outside of the bankruptcy process, either to an owner who would keep the team in Glendale or, failing that, to someone who would relocate the franchise. Balsillie and NHL commissioner Gary Bettman were in the crowded courtroom Thursday.
Those two are to appear as witnesses for questioning on Friday.
Baum raised the prospect of throwing out both bids during arguments on whether Balsillie can get out of a lease agreement with the city of Glendale without a significant penalty.
Jordan Kroop, an attorney for the debtors group headed by Coyotes owner Jerry Moyes that took the team into bankruptcy, was talking about the two bids facing the judge when Baum interrupted him.
"There is a third opportunity when we're done here," the judge said. "No sale."
"Theoretically," Kroop responded.
"I think it's more than theoretical," Baum replied.
Balsillie, who says he is worth $3 billion, has boosted his bid to $242.5 million, adding $50 million for Glendale if the city withdrew its objection to the sale. He wants to transfer the team across the continent for the coming season but says he might need to play a few games in Glendale while the move is made.
To accept Balsillie's bid, Baum must overrule the 26-0 vote by the NHL board of governors rejecting Balsillie as an owner. The board said it found Balsillie to be untrustworthy, based on the Canadian Blackberry mogul's previous failed attempts to buy the Pittsburgh Penguins and Nashville Predators, as well as his Coyotes dealings.
The judge also would have to set a relocation fee that would have to be paid to the league to move the team.
The NHL submitted its $140 million bid at the last minute because of concerns there would be no other offers that would keep the team in Arizona.
As it turned out, the league was correct. First a group headed by Chicago sports baron Jerry Reinsdorf pulled out, then Ice Edge Holdings, a partnership of Canadian and American investors, withdrew. Both cited an inability to reach a new lease agreement with Glendale.
Baum was critical of the NHL bid for a lack of details on its payment schedule for creditors. He told the league to provide him with a schedule by Friday.
The judge also had questions about Glendale's claims of damages ranging from $500 million to $792 million if the team leaves. Balsillie and Moyes want the damages to Glendale capped at no more than a few million dollars.
The main difference between the two bids is the amount of money given to Moyes. Under the Balsillie plan, Moyes could get up to $104 million, the amount he says he loaned the team. He says he also has $200 million invested in the franchise that he never expects to recoup.
The NHL and Glendale contend, among other things, that the $104 million is lost equity, not debt, a concept the judge challenged at Thursday's hearing.
The $50 million offer didn't change the city's opposition to Balsillie.
Glendale attorney William Baldiga said the city was "gravely disappointed" about the Reinsdorf and Ice Edge withdrawal and said it now supported the NHL bid, despite the risk that it may lead to the team's relocation.
"Given the two choices that we have," Baldiga said, "we are prepared to put our lot in with the NHL. It's not our preferred lot but it's where we are today. It gives us the ability to mitigate our harm."
He said the city believed that a buyer could be found outside of bankruptcy to keep the team in Arizona.
Baum had some sharp questions for Baldiga on the city's claim that the lease should be upheld under bankruptcy law.
Most of the day was taken up by questioning with experts hired by the various parties to analyze the value of the franchises in Glendale and, potentially, in Hamilton.
During the questioning, NHL attorney Shep Goldfein revealed that in the now-withdrawn Ice Edge bid, Wayne Gretzky agreed to reduce his annual salary from about $8 million to $2 million to coach the team.
Goldfein challenged the ****odology used by economics professor Andrew Zimbalist to determine the estimated relocation fees of $11.2 million to $12.9 million to move the team to Hamilton. Analysts for the NHL came up with figures ranging from $101 million to $195 million.
The NHL is funding the franchise while the bankruptcy case drags on.
The Coyotes' training camp begins on Saturday with the first preseason game scheduled for next Tuesday.
The team has never turned a profit since moving from Winnipeg in 1996 and lost $34 million each of the last three seasons.
The NHL contends that with better management and a better team a franchise can succeed in the desert.
Judge Redfield T. Baum made the comment on Thursday as the two-day auction of the team began.
Baum called the possibility "more than theoretical."
Canadian billionaire Jim Balsillie has made a bid contingent on moving the team to Hamilton, Ontario, over the overwhelming opposition of the NHL.
The other bid is by the NHL, which says it will resell the team outside of the bankruptcy process, either to an owner who would keep the team in Glendale or, failing that, to someone who would relocate the franchise. Balsillie and NHL commissioner Gary Bettman were in the crowded courtroom Thursday.
Those two are to appear as witnesses for questioning on Friday.
Baum raised the prospect of throwing out both bids during arguments on whether Balsillie can get out of a lease agreement with the city of Glendale without a significant penalty.
Jordan Kroop, an attorney for the debtors group headed by Coyotes owner Jerry Moyes that took the team into bankruptcy, was talking about the two bids facing the judge when Baum interrupted him.
"There is a third opportunity when we're done here," the judge said. "No sale."
"Theoretically," Kroop responded.
"I think it's more than theoretical," Baum replied.
Balsillie, who says he is worth $3 billion, has boosted his bid to $242.5 million, adding $50 million for Glendale if the city withdrew its objection to the sale. He wants to transfer the team across the continent for the coming season but says he might need to play a few games in Glendale while the move is made.
To accept Balsillie's bid, Baum must overrule the 26-0 vote by the NHL board of governors rejecting Balsillie as an owner. The board said it found Balsillie to be untrustworthy, based on the Canadian Blackberry mogul's previous failed attempts to buy the Pittsburgh Penguins and Nashville Predators, as well as his Coyotes dealings.
The judge also would have to set a relocation fee that would have to be paid to the league to move the team.
The NHL submitted its $140 million bid at the last minute because of concerns there would be no other offers that would keep the team in Arizona.
As it turned out, the league was correct. First a group headed by Chicago sports baron Jerry Reinsdorf pulled out, then Ice Edge Holdings, a partnership of Canadian and American investors, withdrew. Both cited an inability to reach a new lease agreement with Glendale.
Baum was critical of the NHL bid for a lack of details on its payment schedule for creditors. He told the league to provide him with a schedule by Friday.
The judge also had questions about Glendale's claims of damages ranging from $500 million to $792 million if the team leaves. Balsillie and Moyes want the damages to Glendale capped at no more than a few million dollars.
The main difference between the two bids is the amount of money given to Moyes. Under the Balsillie plan, Moyes could get up to $104 million, the amount he says he loaned the team. He says he also has $200 million invested in the franchise that he never expects to recoup.
The NHL and Glendale contend, among other things, that the $104 million is lost equity, not debt, a concept the judge challenged at Thursday's hearing.
The $50 million offer didn't change the city's opposition to Balsillie.
Glendale attorney William Baldiga said the city was "gravely disappointed" about the Reinsdorf and Ice Edge withdrawal and said it now supported the NHL bid, despite the risk that it may lead to the team's relocation.
"Given the two choices that we have," Baldiga said, "we are prepared to put our lot in with the NHL. It's not our preferred lot but it's where we are today. It gives us the ability to mitigate our harm."
He said the city believed that a buyer could be found outside of bankruptcy to keep the team in Arizona.
Baum had some sharp questions for Baldiga on the city's claim that the lease should be upheld under bankruptcy law.
Most of the day was taken up by questioning with experts hired by the various parties to analyze the value of the franchises in Glendale and, potentially, in Hamilton.
During the questioning, NHL attorney Shep Goldfein revealed that in the now-withdrawn Ice Edge bid, Wayne Gretzky agreed to reduce his annual salary from about $8 million to $2 million to coach the team.
Goldfein challenged the ****odology used by economics professor Andrew Zimbalist to determine the estimated relocation fees of $11.2 million to $12.9 million to move the team to Hamilton. Analysts for the NHL came up with figures ranging from $101 million to $195 million.
The NHL is funding the franchise while the bankruptcy case drags on.
The Coyotes' training camp begins on Saturday with the first preseason game scheduled for next Tuesday.
The team has never turned a profit since moving from Winnipeg in 1996 and lost $34 million each of the last three seasons.
The NHL contends that with better management and a better team a franchise can succeed in the desert.
I'd love to see more hockey teams in Canada!
