((HT: Toronto Star/McGran))Sports Properties Investment Corp. – a New York investment firm that's flush with cash – was working with Chicago sports magnate Jerry Reinsdorf to buy the Phoenix Coyotes one day before the team filed for bankruptcy protection.
According to documents obtained by the Arizona Republic, Tony Tavares, a former baseball executive who runs Sports Properties Acquisition Corp., signed an agreement May 4 with the city of Glendale, where the Coyotes play their home games at Jobing.com Arena. The document did not reveal a purchase price, but the Republic says Sports Properties has $215 million (all figures U.S.) in a trust account to buy "sports and leisure properties."
The publicly traded firm refers to itself as a "blank check" business that last month was trying to acquire the NHL's Florida Panthers, according to published reports. The revelation comes on the day the NHL, Coyotes owner Jerry Moyes, and the legal team representing Canadian billionaire Jim Balsillie head back to court with hopes for a seventh team in Hamilton teetering on the brink.
The court will deal with today, among other things, Balsillie's ultimatum that he will yank his offer of $212.5 million to purchase the franchise if he's not in control of it by the end of June. Just when it looked as if both sides were getting along, a conflict over the timing of the sale threatens to erupt with the Moyes camp arguing for a June 24 auction date, the NHL eyeing August 27-29.
Judge Redfield Baum is not likely to be amused with the myriad of motions filed on the eve of today's hearing.It was Moyes' legal team 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 Tuesday 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 team's 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 documents say.
"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 judge had instructed both parties into mediation to resolve the issue of who controls the team.The NHL says it's too late already to move the Coyotes for next season. The team's schedule is already finalized, and switching dates now would be too complicated for the 29 other teams.
Baum is not even sure he has the power to authorize the relocation of the hockey 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' documents suggest 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.
Vaughan Mayor Linda Jackson said she would not discuss whether the group led by former Toronto Maple Leaf Kevin Maguire – who wants to bring a team to Vaughan – had any interest in the Coyotes.
The issue of who has "controlled" the team since November remains 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 any disagreements, they would be brought to the court for resolution.
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