The Twits and the Phoenix Coyotes

I don't know how many of you are still following the Phoenix Coyotes saga, but just when things appear to be settled or calmed down, something really stupid happens and things are once again thrown into turmoil. Like Phoenix's white night, Jerry Reinsdorf, pulling his bid off of the table and dropping his quest to save the Coyotes for Phoenix.

But don't worry. The NHL has found a new owner. The NHL. That's right. The NHL is making a bid to purchase the team from bankruptcy, and get this, its offer is for even less money than what Reinsdorf was offering up. And from I've read, the NHL's plan is to purchase the team and then sell it to whoever will offer up cash for it -- and the team doesn't even have to stay in Phoenix.

And coming up next week, the Judge is supposed to decide if he will allow Jim Balsillie to bid on the team, or whether the NHL's vote finding him "not qualified" to be an owner will keep him from bidding on the team.

I no longer have any idea of what is going to happen here. But I'm pretty sure, after everything that's happened, that the NHL is being run by this group of twits.

Coyote Creditors Now Support Reinsdorf Bid

Last week, after the largest creditor of the Phoenix Coyotes backed Jim Balsillie's bid for the team as the only one that they would accept, I thought for sure the Coyotes would be no longer for Phoenix after this season. But today, that same creditor announced that it has reached a deal with Jerry Reinsdorf, so they are now willing to accept Reinsdorf should his bid be chosen by the judge -- I still don't understand this in that it still does not appear that Reinsdorf is parting with any cash, but if the creditor's happy, then the judge should be happy. (There's no word on how all of the creditors feel about this, but the Court cares more about the big guys than it does the little guys.)

Frankly, I now think this dooms Balsillie's bid. Sorry Canadians, but it's looking like a city that doesn't really seem to want the team is going to continue to have a team while a country that loves hockey continues to have an under-served market.

It still appears, however, that Reinsdorf has to work out a deal with Glendale over the use of the arena. And the auction for September 10 is open to any and all bidders, so it's still possible that another bidder could swoop in and making an even better bid which the judge would accept. I still think, from what I've read of Reinsdorf's bid, that the Coyotes are doomed to failure to Phoenix, but instead of ending it, the NHL is just going to stretch things out because of Bettman's hatred of Balsillie, and I'm surprised that Reinsdorf is willing to go along with this -- oh, wait, no I'm not as there appears to be a rather crooked political deal going on involving Reinsdorf.

Uh, Mr. Bettman, About That Whole Southern Strategy Thing

Here's a little something that I'm sure has Jim Balsillie all excited this morning. Because, just in case that whole Phoenix Coyotes thing fall apart, there now definitely appears to be another Southern NHL team in need of rescuing. This time, the franchise is the Tampa Bay Lightning.

According to the St. Petersburgh Times, the NHL has issued an ultimatum to the Lightning ownership: "The NHL apparently has decided the Lightning's ownership situation is unsustainable and set up a process in which squabbling co-owners Len Barrie and Oren Koules can buy each other out." There is apparently a 60-day window in place for Barrie to buy Koules, and if he fails to so do, then Koules has 60-days to buy out Barrie. But along with buying the other out, Barrie or Koules must also prove that he can handle the substantial debt obligations to the previous owner, Palace Sports & Entertainment. Should neither be able to do that then it is possible the NHL will be charged with finding a new owner -- and we all know how good the NHL has done with finding a new owner for Phoenix.

So once again, Mr. Bettman, how is that whole strategy of moving away from Canada and into the South working out for the NHL?

[Addendum] The Phoenix Coyotes Are Dead, Almost, Just Give It A Minute

Ding dong. The witch is dead. Maybe. Almost. We'll know more next month. But in a ruling that perhaps surprised only the NHL, the Phoenix bankruptcy judge overhearing the Phoenix Coyotes bankruptcy today announced that the Jerry Reinsdorf no-money bid, the mythical-yet-to-be-submitted bid from Ice Edge Holdings, and the $212.5 million bid of Jim Balsillie will all be considered by the bankruptcy court in an auction on September 10.

Originally, there were to be two auctions regarding the Coyotes -- a keep the team in Phoenix auction which was supposed to have been done today, and the September 10 open to relocation auction if the original auction was deemed to be unsatisfactory. But Jerry Reinsdorf's bid has proven to be a bit inadequate, and he's still attempting to negotiate with the city of Glendale, AZ over the use of the Coyotes arena, so he and the NHL requested a delay so as to work on the bid. The judge granted that delay, with the result being that all bids will be considered on the same day.

This is bad news for Phoenix, Reinsdorf, and the NHL seeing as how the judge and the leading creditor have both stated that they prefer Balsillie's bid, seeing as how actual money is involved and the creditors are paid off. But in even worse news for Phoenix, Reinsdorf, and the NHL, the judge also stated that the auction is "open to any and all bidders including, but not limited to P.S.E. [Balsillie]."

What that, in effect, means is that the everybody is welcome to bid on the team, and there has been speculation that once the team was open to relocation more bidders might leap in. So it's possible, seeing that this team can now be moved and is not stuck with having to stay in Phoenix, that other parties are going to submit bids to purchase the team and move it, and the NHL has virtually no way to prevent this unless they find a way to get Reinsdorf to offer up at least as much cash as Balsillie.

There is also going to be a court hearing next Tuesday so as to address the fact that the NHL last week rejected Balsillie's bid. My thinking is that the judge will hear the NHL out, tell them to shut up, and get on with the real work. Considering some of the owners they have let into the league, like "Boots" Del Biaggio for example -- it's funny to listen to Minnesota Wild owner Craig Leipold go on about Balsillie being a liar when you consider that Leipold thought Del Biaggio was an honest guy -- I don't think the judge is going to be too sympathetic to the NHL's concerns. Especially since the judge's concern is getting the money back to the creditors, not helping Gary Bettman dig himself out of this grave he's buried himself in.

So the future of the Coyotes in Phoenix is dead. Almost. Not quite. But in a minute. They'll be stone dead soon. It won't be long.



ADDENDUM:

I want to be clearer about something: with the bidding process thrown open to anybody who wants to buy the club and move it, I wouldn't be shocked or surprised if someone makes a bid that surpasses that of Balsillie's and ends up with the team.

Disorder In The Court: The Phoenix Coyotes Drag On And On

For those of you still attempting to follow along, the idiocy continued in Phoenix today as once again, the bankruptcy judge refused to bring things to an end. Of course, there are a couple of good reasons the bankruptcy judge didn't bring things to an end, first and foremost being that the idiots running the NHL couldn't get a decent bid from the savior that is supposed to be Jerry Reinsdorf, and Reinsdorf and the other so-called bidder seeking to keep the team in Phoenix begged for a delay in the auction so as to have more time to negotiate with the creditors -- primarily the city of Glendale.

Another reason that the judge couldn't end things today is that there's only one legitimate bid, and that's Jim Balsillie's bid to move the team to Hamilton, but that portion of the auction is scheduled for next month. The judge declared Balsillie's bid to be the "highest and best" of the offers, and it's actually the only one in which creditors will get money.

That's probably why the largest creditor of the Coyotes, SOF Investments, a fund owned by Michael Dell of Dell Computers, appeared in court and said it was only interested in being paid in full and in cash and requested that the court reject the other bids. That should end up having a big influence on the court because the role of the bankruptcy court is to make sure that the creditors get their money back -- and when the largest creditor is happy with only one bid, then that's probably the bid the judge will end up backing.

The matter as to Reinsdorf is now being postponed until September 10 to give Reinsdorf and the mythical bid (mythical because a bid has yet to actually be made) time to get their act together and get not only concessions from the city of Glendale, but also to find a way to make creditors like SOF Investments happy. (There will be a hearing on Wednesday as to whether the relocation auction will be still be held on September 10.)

There are major problems arising with Glendale, and Coyotes owner Jerry Moyes revealed these problems in court filings last Friday. Primarily, Reinsdorf is trying to get a $23 million subsidy from the city over the use of the arena, and that subsidy would be raised by creating a special district around the arena which would charge a so-called voluntary surcharge on retail sales in the district which includes a large mall. More importantly, the district also includes the stadium used by the Arizona Cardinals, and the Cardinals have made it known that they're not happy about this: "The NFL team’s stadium would be in the special district and team president Michael Bidwell was quoted in local media reports as saying it was not fair that Cardinal fans should have to pay for the Coyotes’ problems."

And it gets better, if Glendale couldn't raise the necessary money through the surcharge, the city would end up paying the Coyotes out of city funds, and if, within five years, the team was still not showing a profit and if the city then refused to pay the team $15 million a year, then Reinsdorf would be able to move the team.

And if you have the time, there's a good story from a sister paper to the mothership which reports that there are some very serious shenanigans on the part of Glendale's city manager to make sure a good friend of his (a co-bidder from Reinsdorf) gets the team, and that this city manager has failed to offer up similar deals and concessions to the current owner and any others who might have been interested in the team.

So, in summary, there will be a hearing on Wednesday to determine if the relocation auction originally scheduled for September 10 will still take place on September 10, or whether it will be pushed back so that the incompetent fools chosen by the NHL can attempt to get their act together in time for another auction on keeping the team in Phoenix on September 10. Further, the judge likes the Balsillie bid. The largest creditor likes the Balsillie bid and has stated it wants to be paid in full and in cash. There's some shady business dealings going on between the city of Glendale and Jerry Reinsdorf, and even the Arizona Cardinals are against the Coyotes.

At this point, I think we should all be happy that George W. Bush put Mike Brown in charge of FEMA and not Gary Bettman because I can't help getting the feeling that the Gulf Coast would still be under water from Katrina if Bettman was running things.

P.S.: For a little fun, here's some real disorder in the court.

And The Coyotes Stay in Phoenix...For Now

The bankruptcy judge in Phoenix ruled late on Monday night that the June 29, 2009 deadline set by Jim Balsillie for the transfer of ownership of the Phoenix Coyotes to him did not allow enough time for the court to handle all of the complex issues that needed to be settled in the case, so the judge rejected the proposed sale of the franchise from current owner Jerry Moyes to Balsillie.

It is late, I've been sick, and I don't see much else out there on this yet, so it's hard for me to provide much analysis on the basis of an Associated Press article. But the one thing that I found interesting was this: the judge didn't care about the argument from the NHL (supported by all of the other major professional leagues) that its own internal rules were paramount above all else, and that allowing this sale to Balsillie would set the stage for mass franchise relocations across the country. The AP quotes the judge as saying that "Financially challenged sports teams have the same rights and obligations as any business" when it comes to bankruptcy.

From reading that statement (and the entire article), I get the feeling that the only thing that kept the Coyotes from relocating to Hamilton was timing in that the judge did not feel he had enough time to get all of the matters settled -- primarily the problems with the 30-year arena lease -- in the time desired by Balsillie.

It should get fun as the onus is now on Gary Bettman and the league to put up or shut up. I'm going to have to see some more in-depth stuff tomorrow, but the team is still in bankruptcy, and that means the judge is still in control of everything, and there is a plan from the NHL that if an auction that would keep the team in Phoenix does not come in at a price that would set the creditors whole, then the NHL will hold a second auction that would allow relocation. So I don't see that judge letting Gary Bettman get by with a sweetheart deal to one of his buddies.

And The Phoenix Coyotes...Oh, To Hell With It, There's Still No Ruling

And the soap opera that is the Phoenix Coyotes will continue just a little while longer. The bankruptcy court judge -- who had earlier said he would hold a hearing regarding the possible relocation fee that Jim Balsillie would pay to move the club to Hamilton -- issued a statement yesterday that he will not hold a hearing regarding the relocation fee and will instead issue one ruling on all matters that were heard by the court earlier this week.

There are two possible explanations for this: one, the judge has decided that the team can't move without NHL approval, so the relocation fee issue is moot; or, two, the judge did a little research and discovered that relocation (or indemnification) fees are not allowed under U.S. law -- for which Balsillie would owe a big debt of gratitude to one Al Davis. And indeed, looking at past NHL relocations, it has been determined that all indemnification fees paid were voluntary. And also of importance, the last time a NHL team invaded the territory of another NHL team, an indemnification fee was not paid.

The NHL expanded in 1993, and one site of the expansion was a place called Anaheim which was part of the territory of the Los Angeles Kings. The Walt Disney Company paid $50 million for the rights to the expansion franchise, and Michael Eisner, the man who was running Disney, refused to pay an indemnification to Bruce McNall, the owner of the Kings. To make up for this, the NHL gave McNall half of the $50 million expansion fee. And McNall has confirmed that this is what happened.

All of this would play into Balsillie's contention that he is not legally obligated to pay a territorial rights or indemnification fee. And all thanks to the NHL's own ineptitude.

The NHL is now claiming that, if Balsillie's court bid fails, that it will hold an auction to be supervised by the bankruptcy court for the franchise. Only qualified bidders will be allowed, and to be a qualified bidder, the bidder must agree to keeping the team in Phoenix. A $10 million deposit deposit and bids must be submitted to the court by August 10, with the auction on September 10, and the bids must be in $2 million increments.

The NHL has declared that $120 million will cover most of the team's creditors. But if the NHL does not get a bid that good to keep the team in Phoenix, it will hold a second auction for the purpose of relocating the team, and they will allow Balsillie to enter that auction.

The judge has not indicated when he will deliver his ruling, but it is expected to come before June 22, which is the date that Balsillie has indicated is his drop dead date.

And The Phoenix Coyotes Go To...Who Knows Yet?

There is not expected to be a final ruling on the Phoenix Coyotes situation today, but based on the line of questioning by the judge, and some of the statements he provided, it's looking like the NHL is currently positioned to end up as the loser.

The Judge didn't buy the NHL's contention that it has received "four expressions of interest" for the club: "This old judge is not that excited about expressions of interest," the judge told lawyers for the league according to the Toronto Globe and Mail. "You either make an offer or you don't."

The Judge also called bull on the NHL's contention that the move could wreak havoc with sports leagues and their various rules, and he used as support the midnight move of the Baltimore Colts to Indianapolis.

The primary issue appears to be relocation fees, with the judge seeming to agree that, if he approves the move, Jim Balsillie will have to pay the NHL a relocation fee on top of the $200-plus million he has already bid for the team. The NHL has claimed in papers that the relocation fee should be $100 million. Attorneys for Balsillie argued that that fee is too excessive, and that if that is what the NHL should charge, he will drop his bid.

The Judge stated that the relocation fee must be resolved, and it must be resolved in a manner that protects the interests of the creditors. A fee that is too excessive could cause Balsillie to drop out, and if there are no other legitimate bids -- which there do not appear to be -- the creditors would be harmed by having the NHL continue to run the team out of Phoenix. The Judge has asked the parties involved to settle this issue.

And so the matter continues.

And The Phoenix Coyotes Go To...

Quick note: for those who are tired of this topic, hang on, the mothership should have an Aeros post later today that I will link to over here. Now on with, to me, the fun stuff...

The parties to the mess that is the Phoenix Coyotes will be convening inside a Phoenix courtroom today, and it's just possible that the bankruptcy judge will make some kind of decision that might determine the fate of the team. The Toronto Star says that the judge is faced with making a decision that has Jim Balsillie easing creditor debt versus his reluctance to buck the tradition of sports that has the leagues being the rulers regarding where franchises are located: "(If) Judge Baum is focused on helping creditors, (it) means Balsillie should win," says Penn State law professor Stephen Ross. "But many judges are reluctant to challenge the tradition of sports, which helps the NHL."

One of the mistakes I've been making is that I thought the focus of this case, and the one true precedent, was the one involving Al Davis and the NFL where Davis won the right to move the Raiders to Los Angeles without NFL approval. But it just so happens that there this is a case that is even more on point -- and one which I should know since I'm such a baseball fan. But in 1970, on the literal eve of the regular season, the Seattle Pilots of the American League were relocated to Milwaukee, WI where they became the Milwaukee Brewers. The Pilots were put into bankruptcy by their ownership group, and Bud Selig moved in and purchased the team while it was in bankruptcy.

The Pilots owners were losing money, and they struck up a deal to sell to Selig and his partners for $10.8 million. Local officials in Seattle objected to the deal, and they tried to stop it. The owners then put the team into bankruptcy protection and argued that the deal should be approved because it would pay off the creditors -- does that sound kind of familiar? The NHL argues that the one difference is that the American League supported the move, to which Balsillie has responded that the American League only approved of the deal after the bankruptcy court judge approved of the plan and had instead insisted the team had to remain in Seattle.

I'm not the judge, and what I say has absolutely no power. But I've thought from the get-go this is a loser for the NHL. I understand that they're trying to protect the integrity of the league constitution and by-laws, and that they're trying to prevent the chaos that could result in teams constantly relocating, but I've thought ever since this thing ended up in bankruptcy court that the league was going to lose because the judge's primary concern is the setting whole the creditors, not protecting league constitutions. And frankly, if bankruptcy court judges can go about voiding union contracts, then they can go about approving this deal. (I also feel good about this as it seems there are a lot of bankruptcy experts who agree with what I think.)

(A side note, for anyone interested in reading more about the Seattle Pilots, then allow me to recommend Jim Bouton's groundbreaking Ball Four, which was about the season he spent between the expansion Pilots and the Houston Astros.)

And Gary Bettman really needs to be careful regarding the arguments that he is pushing before the Court. For instance, over the weekend, the NHL filed papers in which they questioned Balsillie's integrity, noting that Balsillie recently settled with Canadian and American securities regulators regarding allegations that he and others backdated stock options at Research In Motion with Balsillie and his fellow company officials paying more than $70-million (Canadian) to settle the allegations.

Now the reason that Bettman might want to be careful with this argument can best be summed up by one name: William "Boots" Del Biaggo. Boots recently pled guilty to falsifying documents to obtain $100 million in fraudulent loans, and that he did so by way of a Ponzi scheme. Boots used these loans to purchase a $25 million stake in the Nashville Predators. Now the Predators were actually supposed to be purchased from Craig Leipold, current owner of the Minnesota Wild, by one Jim Balsillie. But when Balsillie started making plans to move the Predators to Hamilton, Bettman and the league stepped in to stop the deal and to broker the deal which allowed Boots to become one of the owners.

If Bettman wants to keep pressing the integrity issue at Balsillie, then any attorney who knows what he's doing will certainly push back with Boots Del Baggio, and I can guarantee that that attorney, and the judge, are going to know what exactly Bettman and the league knew about Boots, and when they learned it.

It was also reported that the owners of the CFL's Toronto Argonauts are interested in purchasing the team, and that they would keep the Coyotes in Phoenix. But from what I've read, only an idiot would believe that -- so I guess that means Bettman has either fallen for it or else he's lying. In fact, according to the Toronto Globe and Mail, these guys want to move the team to Toronto.

So later today, maybe, hockey fans might have some idea of what is to become of the Phoenix Coyotes. I've been wrong, often, but I think the law is in favor of Balsillie.

Meanwhile...An Update on the Phoenix Coyotes

Actually, there's not much to update as we're still waiting on the court date, but...some of the Canadian papers have been digging through all of the documents and papers filed by the NHL in support of their effort to take control of the Phoenix Coyotes.

Among those documents is the NHL Constitution. And the constitution has what has been dubbed the Doomsday Clause which says that upon the unanimous consent of all of the league members, the NHL can be dissolved. So while I haven't read the briefs that have been filed, I'm taking the filing of this document to mean that Gary Bettman is threatening to destroy the NHL if he doesn't get to keep a badly failing team in Phoenix.

And in other papers filed by the NHL, Gary Bettman argues that he has four ownership groups that are prepared to purchase the Coyotes, including the owners of the CFL's Toronto Argonauts, Jerry Reinsdorf, the minority owner of the Coyotes, and a Phoenix businessman who prefers to remain anonymous. And all of these groups want to keep the team in Phoenix.

Bettman argues that the bankruptcy shouldn't be approved because Coyotes owner Jerry Moyes didn't try hard enough to find a legit buyer for the franchise. This of course, contradicts what Bettman said in an e-mail to Moyes back in April in which he said it was proving difficult to find a new owner for the team.

But how about that Doomsday Clause? Seriously, it just seems like the NHL just keeps attempting to commit suicide. There's Gary Bettman, who has got to be the worst commissioner in the history of sports yet has a firm grip on his job. There's bad TV contract after bad TV contract. There's the glowing puck. There's the fact that Los Angeles and New York City have two teams, but Toronto has only one, and don't forget that lockout that shut down the entire sport for a year, but which seems to have failed in its goal of providing economic certainty for all teams.

My first love is baseball. And baseball will always be my number one sport. But I've always liked hockey, since I was a mere kid at the time of the original Houston Aeros, and since I've been covering this version of the Houston Aeros I've become a huge fan as I've gotten to know what great guys the players are and just been around. And it almost kills me to watch the NHL go on constant self-destruct mode.

I might not feel this way if it weren't for what Houston went through with losing the Houston Oilers despite supporting what was often an awful product, but it just seems to me that the Canadians, the people who love this sport more than anyway, have to suffer with a lack of big league franchises in their national game while teams fail year after year in Atlanta and Phoenix and Tampa and Miami, but Winnipeg and Quebec City and Hamilton deserve the teams more than the States do.

So perhaps it would be best for the NHL to exercise that Doomsday Clause. Then maybe some competent people could come and run things. Though I somehow suspect that, like the cockroach surviving the nuclear war, Gary Bettman will survive everything.

More On The Strange Case of the Phoenix Coyotes, Part The Continued

And in my quest to bore you out of your mind with the Phoenix Coyotes situation -- which I find fascinating because, well I'm a lawyer and I don't like Gary Bettman -- I bring you some more info on what actually happened yesterday.

According to the Canadian media, who were actually present at the hearing, the judge appeared to side with Jerry Moyes on the whole control of the team issue and doesn't quite think the NHL is being quite truthful regarding Moyes signing a proxy to surrender control of the team -- I know, the NHL lying is a rather shocking development. That said, the judge still refused to rule on the matter and punted it over to a mediator to try and get the parties to settle the matter.

The mediator has until May 27 to get this matter settled, at which point the parties will return to the bankruptcy court. At that point, it's expected that, if the mediator hasn't gotten a settlement in this matter, then the judge will actually make a ruling as to who has operating control of the franchise. And even scarier for the NHL is that the judge made it clear yesterday that he doesn't care about their internal franchise relocation rules and that he considers the franchise to be a movable asset if it turns out that relocation is the best method of increasing franchise value and raising money for the creditors.

But that doesn't necessarily mean that Jim Balsillie gets the franchise should that occur. If the judge so rules, he probably put the franchise up for auction and accept the highest bid. Balsillie's bid is the highest, but if there's a chance of moving the team out of Phoenix, then there's no telling what kind of bids might actually come flooding in. But -- and again but -- the judge probably won't even hold hearings on the whole relocation aspect until the end of June.

So there are two issues to be decided: control of the team, and whether the team can be moved without NHL approval. The judge indicated in arguments yesterday that he thought the NHL was a loser on both points, but until there are hearings and actual rulings, no one knows for sure what the judge will do, and who knows, maybe all of that will force the NHL to listen to some logic about the viability of Phoenix.

But another problem is that the Judge might not even get around to ruling on these issues for several months, which might end up meaning that, by default, the Coyotes are forced to play in Phoenix next season.

Gary Bettman Steps In It: More On The Strange Case of the Phoenix Coyotes

I've been a bit slack on updating everybody about the Phoenix Coyotes situation, so here's a quick update. First, the parties are all in court today, arguing before the Bankruptcy Court whether or not Jerry Moyes actually has the power to put his team into bankruptcy. I'll have more on that later tonight.

But this little bit from yesterday's Toronto Globe and Mail is really interesting, especially to our friends from Winnipeg who might be in town for the Moose/Aeros playoffs series. It seems that early last month, while the NHL was attempting (and failing) to help the Coyotes find new ownership, NHL commissioner Gary Bettman sent an e-mail to people at the Coyotes updating the situation. Bettman makes it clear in the e-mail that it's proving to be nearly impossible to find a new owner to take over the team and keep it in Phoenix, and that "if we don't have an alternative, I will have to start looking at the moving option."

And just where does that moving option start? Well, it starts with Winnipeg, the original home of the Coyotes. And as for Hamilton/Southern Ontario, Bettman essentially writes that he just wants to string them along.

Nice going, Bettman.

What you have here is Bettman and the NHL saying that the team probably has to move because it can't find a buyer to keep the team in Phoenix because it's not financially viable to keep the team in Phoenix, and you also have Bettman saying the best option is Winnipeg while the folks in Hamilton are just strung along as suckers. And Moyes did what Bettman said the league would probably do: he found a buyer in Canada, but because of lease problems, he had to go through bankruptcy court.

(Oh, and one thing I haven't made clear in the past: the NHL is not objecting to the Coyotes going into Chapter 11. They're objecting about who is sending the team into bankruptcy.)

But we should have a better idea of what's going to happen with Phoenix later today, when the court hearing is finished.

Et Tu, Wayne: More On Chapter 11 And The Strange Case of the Phoenix Coyotes

Things continue to get interesting in the bankruptcy controversy of the Phoenix Coyotes.

Before I get further into that, let's further address an issue that arose on Saturday when I noted there were reports that the Atlanta Thrashers were being sold to Canadian interests who would move the team to that same Southern Ontario region that the Phoenix Coyotes are hoping to relocate to. But representatives for the Thrashers announced over the weekend that the team was not for sale and that it would not be relocated.

So that aside, what about the Phoenix Coyotes?

The really interesting news came yesterday when the judge in the bankruptcy court ordered the NHL to produce all documents relating to the possible sale of the franchise to Chicago White Sox owner Jerry Reinsdorf (or any other parties who have been in discussions about buying the franchise). This was requested by current (?) Coyotes owner Jerry Moyes. And the judge rightfully granted the motion.

It's one thing for the NHL to state that Jim Balsillie's bid to purchase the team in bankruptcy should be denied because they've got another lined up. But at some point in the proceedings, the NHL has to demonstrate that a valid bid was actually made because the Court's concern is setting whole the parties, particularly the creditors. And if Balsillie's bid will do more to set the whole the creditors than Jerry Reinsdorf's bid, then the judge is going to go with Balsillie. NHL objections be damned.

But the NHL has petitioned the Court to stay that order until after the Court has made a ruling as to whether Jerry Moyes actually has enough control of the club to put it into bankruptcy. The NHL is stating that Jerry Moyes gave all control of the franchise to the NHL in return for financing that would keep the club operating (it's somewhat ironic that the NHL is now making this argument considering that they spent most of this season arguing that the Coyotes were in fine financial shape and that the NHL was exercising no control over the team). But there are also reports that part of an agreement between Moyes and some of the minority owners (including one Wayne Gretzky) overrides any agreement between Moyes and the NHL. (I reiterate what I stated last week: I think this argument is a loser for the NHL).

And the NHL is further arguing that exposing the details of the Reinsdorf bid would actually harm the sale and the value of the club. Once again, I think that's a losing argument. If there's a valid bid that sets things right, then I don't really think a judge will give a damn if a lesser bid is harmed -- especially if that bid was never going to come close to eclipsing the larger bid.

The Toronto Globe and Mail took a more in-depth look into the matter, and it's got a bunch of legal experts saying that the NHL will win because they don't think a judge will dare to go against internal NHL rulings regarding relocation. Most of the experts think the Oakland Raiders matter was just a hiccup, but I still disagree with that. The guys they talked to seem to know the workings of the leagues, but none of them discussed the antitrust aspects, and I firmly believe that that Raiders decision is firmly on point when it comes to the Coyotes -- and if that decision is followed, then the NHL loses and the Coyotes are in Hamilton come this time next season.

There was another expert who made a point, based in bankruptcy law, that the bankruptcy courts can void legal and legitimate contracts to protect creditors. And the franchise agreement between the NHL and the franchises are contracts that can be voided to protect the creditors. Could this harm the league (and all leagues) should the court void that contract? Yes, it could. But damn it, this is the fault of the NHL and Gary Bettman who have let this situation get to where it is now.

The interesting thing, to me, is some stuff I read earlier which is stating the trigger to this whole thing is one Wayne Gretzky. Gretzky's a minority owner of the Coyotes, and supposedly he's the one who forced Moyes to file for bankruptcy and accept the deal with Jim Balsille. It seems that, despite the NHL supposedly assuming control of the franchise, neither Gretzky (in his role as head coach), the team ticket sellers, nor nearly 400 other team employees have been paid recently, so it's alleged that Gretzky is forcing this deal and might be the man responsible for the demise of Gary Bettman.

And finally, last month I wrote about the situation with the Dallas Stars and Tom Hicks, who put the team into default to its debtors by refusing to make debt payments. Well there are people out there who think that Tom Hicks is carefully paying attention to the Coyotes situation because the Stars could be next to take the Chapter 11 route.

There's a long time to go before this matter is settled. But right now, I just think the NHL is a loser on this. Especially if this stays in bankruptcy court, and especially if the antitrust argument begins to come into play. I love hockey, and I really want the NHL in Houston some day, but the NHL deserves what it's getting. It's a poorly run league with a poor TV deal and almost no national coverage in the country where most of its teams are located while the country that longs for hockey is almost shut out.

Sticks And Stones Can Break My Bones, But Words Do The Most Damage of All

I'm going to hijack T3I for a moment because I want to go off on a rant. A rant about the rank stupidity that is NHL management.

My case in point is one Scott Walker, a player for the Carolina Hurricanes. And on Sunday, Mr. Walker and his mates were playing a team known as the Boston Bruins in Game Five of their little Stanley Cup playoff series. And there was a little action, and before you know, Walker sucker punched Boston's Aaron Ward, drawing an instigator penalty and an automatic one-game suspension.



But this is the NHL we're talking about. And in the NHL, the word "automatic" doesn't quite mean "automatic" because league officials decided to change the punishment from an automatic one game suspension to a $2500 fine.

Now I really shouldn't be surprised by this turn of events. After all, it's not like Scott Walker insulted Elisha Cuthbert. After all, if you call Elisha Cuthbert "sloppy seconds" you get a six game suspension. But as the NHL showed earlier this season, you can bite an opponent's thumb and get only a two game suspension. Or you can shove a linesman and get a three game suspension. Or blindside an opponent with an elbow and get only four games. But insult Elisha Cuthbert, you get six games.



So why should sucker punching a guy in the face be any different?

I'm not defending Sean Avery's actions in the Elisha Cuthbert incident. But the priorities of the NHL just continue to amaze me. There have been multiple incidents of players receiving possibly severe injuries yet the NHL feels those incidents warrant less punishment than insulting a mediocre (yet beautiful) actress who has this thing for dating hockey players.

Really, maybe it's just time the NHL junk all of the punishment rules in the book and just say that anything not involving the insulting of Elisha Cuthbert will result in a less than six game suspension. And since the league doesn't quite understand the meaning of "automatic," then maybe it should just remove that word from the rule book as well.

I now return you to our regularly scheduled bitching about the Houston Aeros.