Balsillie offers to start season in Arizona, then move Coyotes to Hamilton

Balsillie agrees to start season in Arizona

PHOENIX — Canadian billionaire James Balsillie has proposed having the Phoenix Coyotes begin the season in Arizona, then move to Hamilton, Ontario, as quickly as possible.

Balsillie’s attorney, Jeff Kessler, made the suggestion Wednesday after U.S. Bankruptcy Judge Redfield T. Baum said it was “reasonably probable” that he could not resolve the many outstanding issues in the messy Coyotes fight by a Sept. 14 deadline set by the Canadian.

The statements came during a hearing on whether the judge should overrule the NHL board of governors’ 26-0 vote rejecting Balsillie as a potential owner and clear the way to move the franchise to Hamilton.

“We may have to move during the season,” Kessler said.

After the hearing, NHL commissioner Gary Bettman said that proposals by Balsillie’s company, PSE, to move the team either before or during the coming season “shows a lack of respect for the game.”

The NHL vehemently opposes Balsillie’s plan to buy the team and wants the judge to rule that the Coyotes will play the coming season in Arizona regardless of the outcome of the bankruptcy case. Such a ruling would kill Balsillie’s bid, his attorney said.

The league, which has made its own bid, says moving the team at this late date across the continent to Hamilton would create enormous difficulty for the other teams and players, not to mention everyone involved with the Phoenix franchise. Each day of uncertainty does more damage to the franchise, NHL attorneys said.

“I think the arguments by PSE (the company Balsillie formed to pursue the Coyotes) on moving the club treats rather frivolously the issues that all sports leagues have,” Bettman said. “I think it disrespects the game and it disrespects the players and what they have to go through night in and night out to do the great things they do on the ice.”

Speaking outside the courthouse after the day-long hearing, Bettman said, “Of all the things that were argued, and they were important, that one strikes a chord that showed a lack of respect for the game.”

The first preseason game is Sept. 15. The Coyotes open the regular season Oct. 3 at Los Angeles.

For the first time since Coyotes owner Jerry Moyes took the team into bankruptcy, Balsillie was in the courtroom.

Just when a ruling will come on any of the issues will come is unknown. The judge may well wait until the Sept. 10 auction.

“Whatever he rules, whenever he rules it I’m going to respect his ruling,” Balsillie said. “That being said, obviously I still think that our bid is by far the best for creditors, for fans and for the long-term viability of the team. All I wanted from the beginning was a chance for a level playing field, a court-supervised auction where we can participate.”

Thomas Salerno, attorney for the debtors headed by Moyes, said the team would lose “$30-$40-$50 million” if it plays the entire season in Glendale, money lost to the team’s creditors.

Bettman defended the huge financial commitment the NHL is willing to make and vowed a court fight to the finish.

“There’s nothing more important to any sports league than who owns its franchises, where its franchises are located and the application and enforceability of its rules and procedures,” he said, “and if you’re in this business you’ve got to do whatever it takes to enforce your rules in that regard.”

Kessler told the judge that Balsillie was willing to play a season in Glendale if the NHL would split the anticipated losses, not tie up the case in appeals and act on the request to relocate the franchise to Hamilton.

“It’s not a suggestion that has much appeal to us,” Bettman said.

Baum succinctly summed up the issue before him regarding Balsillie and his representatives.

“Either they have the ability to force themselves into the league, in a simple sense, or they don’t,” the judge said. “If they don’t, then game over.”

He noted that a ruling Balsillie’s favor would be unprecedented.

Kessler argued that the NHL rejection of Balsillie was a “thin pretext” conjured up by lawyers when the league’s real concern is a potential legal battle with the Toronto Maple Leafs.

The contention is largely based on a November 2006 letter from the Maple Leafs’ counsel that cites the franchise’s position that any relocation of a franchise must be approved by a unanimous vote.

Bettman says he has made it clear to all owners that relocation would be decided by a majority vote.

League attorney Shep Goldfein called the allegations “just made up” and “something from ‘The Twilight Zone.’”

The judge put aside for now assertions by Balsillie’s attorneys that the NHL had a serious conflict of interest because it was a bidder. The league filed a $140 million offer to buy the team last week when a group headed by Jerry Reinsdorf pulled out.

On Wednesday, the NHL said it had changed its offer and, if it is awarded the team, the league will give any net profit on the resale of the club to the creditors. The initial bid offered 20 percent of the profit. However, the league has said in court documents that a net profit on the sale is unlikely.

Balsillie’s attorney, Susan Freeman, said the NHL was considering making a bid at the time of the league vote against the Canadian as an owner. That put the league owners in a position of rejecting a competitive bid.

As if the nearly 900 documents filed in the case weren’t enough for him to read, Baum asked for the full transcripts of all depositions in the case. Each of those is 250 to 300 pages long.

Balsillie is offering $212.5 million, contingent on immediately moving the franchise to Hamilton. Under that bid, Moyes would get $104 million of the $300 million he says he loaned the Coyotes.

Another bidder is Ice Edge, a group of investors who say they will pay up to $150 million and would keep the team in Glendale. However, five regular-season games would be played in Saskatoon, Saskatchewan.

Moyes would get next to nothing under the NHL and Ice Edge bids.

(This version CORRECTS Corrects to Kessler throughout)