Coyotes Still Marooned in Desert
RIM co-founder will continue pursuit to move NHL's Phoenix franchise north of the border.
June 17, 2009
Arguing that maximizing creditors’ value was the primary concern, a bankruptcy court judge decided against allowing the Phoenix Coyotes to make the move to Ontario as part of the beleaguered ice hockey team’s next step toward economic viability.
The move is still one that supports corporate professional leagues over individual teams’ wishes; the Coyotes, now bankrupt, had struck a deal to sell to Jim Balsillie, co-founder of BlackBerry maker Research in Motion, a Toronto Stock Exchange-listed company, for a little more than $200 million.
The deal potentially presents not just a distressed asset but a powerful moneymaking tool for Balsillie, who wants to move the Coyotes to Ontario to capitalize on a fan base consisting of die-hard hockey fans and lacking any other winter sport, unlike most North American metropolitan areas.
The rejection of the Coyotes’ sale, made by Judge Redfield T. Baum of the Bankruptcy Court for the District of Arizona, still leaves the door open to a potential sale of the Coyotes to Balsillie; Baum’ denial was done without prejudice. Further, the Coyotes’ saga can continue well into summer, though even if the hockey team opens its next season in Phoenix, it may still be its last there. The team is progressing with ticket sales and the Baum called for the abandonment of a late June auction date, putting the process’ timeframe in flux.
Coyotes’ owner Jerry Moyes said the “most important thing for us to do” is “obtaining the most money for the team’s creditors.” Moyes added that a “reasonable” relocation fee could factor into the Coyotes’ future. While the Phoenix/Glendale area will balk at the team’s move, still possible, having spent $180 million on their venue, should a local buyer not emerge Balsillie will maintain the upper hand, even after his rejection.
The team did not respond to requests for comment. At the time the decision was made, NHL deputy commissioner Bill Daly said the league will pursue a local buyer. A representative from Squire Sanders Dempsey, the Coyotes’ law firm, did not respond to a request for comment. The league is being represented by Skadden, Arps, Slate, Meagher & Flom.
This is not the first time Balsillie, noted for his regular recounting of naysayers dismissing his now essential tool, has aggressively sought to break into the NHL owners’ club; previously, he tried to buy the Stanley Cup Champion Pittsburgh Penguins and also set his sights on the Nashville Predators.
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