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For the lazy non-link types.

Canadian billionaire says he'll bail on the team if sale isn't approved by end of June

May 27, 2009 04:30 AM

Comments on this story (12)

Kevin McGran

SPORTS REPORTER

PHOENIX–The hopes for a seventh NHL team in Canada are teetering on the brink.

Billionaire Jim Balsillie is threatening to withdraw his $212.5 million (all figures U.S.) offer for the bankrupt Phoenix Coyotes if he doesn't have the team in his possession by the end of June.

And the NHL is proposing an auction schedule to ensure just that.

Just when it looked as if both sides were getting along, a conflict over the timing of the sale threatens to erupt today at a Phoenix bankruptcy court hearing with the Moyes camp arguing for a June 24 auction date, and the NHL eyeing Aug. 27-29.

Judge Redfield Baum is not likely to be amused with the myriad motions filed on the eve of today's hearing.

It was the legal team for owner Jerry Moyes that turned up the heat on the judge – who is responsible to get the best deal possible for creditors – by announcing Balsillie's ultimatum as part of its desire for an expedited sale.

"If a decision on the proposed sale of assets is not made by the end of June, the Debtors (Phoenix Coyotes owner Jerry Moyes) have been notified that PSE Sports (Balsillie) will withdraw its offer," said court documents filed yesterday on behalf of Moyes.

The team is swimming in debt, having lost more than $70 million over the past three seasons, and the filing reminds the judge that Balsillie's offer covers most of the debts.

If Balsillie's offer vanishes, it means creditors may not get paid in full because no one else is prepared to pay that much if it means keeping the team in Glendale, the document says.

"An expedited sale is necessary to maximize the value of Coyotes Hockey assets," said the Moyes document, arguing a new owner wants to be on hand for the June 26 draft, and needs time to get a new arena ready for the 2009-10 season, line up sponsors and television contracts, and sell tickets to games. "In other words, a sale cannot drag through the summer."

NHL deputy commissioner Bill Daly said he wasn't impressed by the latest court filings.

"Seems inconsistent with how the court instructed the parties on May 19," Daly said in an email.

The NHL says it's too late to move the Coyotes for next season. The team's schedule is finalized, and switching dates now would be too complicated for the 29 other teams.

Baum is not sure he has the power to authorize the relocation of the team – a hearing on that matter is set for June 22 – just two days before Moyes' proposed auction.

"This means that potential bidders would not know whether the club is to be sold in place or relocated, which virtually assures that no one but Mr. Balsillie will show up for the auction," the NHL said in its legal reply.

While Balsillie wants his $212.5 million offer to stand as the opening bid, the NHL's sales procedure does not call for an opening bid. And while Balsillie wants the next bid to go up by $5 million, the NHL is calling for $2 million increments.

The NHL says its slower sales schedule would draw more bidders and allow time for background checks. Moyes's documents suggest the NHL knows far more about other bidders than it's letting on.

Referring to a letter from Moyes' lawyer Earl Scudder – which is under seal – the Moyes camp believes "that any entity interested in purchasing (the Coyotes) is fully aware ... of the proposed sale" and may have already been vetted by the league.

Scott Cohen, the lawyer for minority owner John Breslow, said Breslow was not interested in talking about his bid for the team.

Chicago sports magnate Jerry Reinsdorf is also said to be interested in the team.

The issue of who has "controlled" the Coyotes since November is unresolved, but the NHL and the Coyotes have agreed to run the team together – each with a representative with equal power. GM Don Maloney would run the draft; the NHL would pay the bills. If there are disagreements, they would be brought to the court for resolution.

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Guest Low Roller

You know, from a negotiations point of view Silly Balls is completely delusional as far as his value to the NHL. Additionally he also just gave the NHL the means to win this silly battle by stating a date by which he will pull his offer. All the NHL needs to do now is play the waiting game and they win!

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Guest Low Roller

Interesting development... The NHLPA supports Silly Balls' application to move the team to Hamilton.

In other related news apparently a lot of owners of poorly performing teams are getting nervous about the way that the league is strong arming the Coyotes owner. The owner of the Panthers apparently sold the team for $240M to a local interest because of this reason.

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