((HT: The Star/McGran))When Jim Balsillie officially applies today to the NHL to move the money-losing Phoenix Coyotes to Hamilton, Wayne Gretzky ((pictured, thanks CBC)) will be watching very closely.
The Great One stands to lose up to $9.3 million (U.S.) if Balsillie fails, according to court documents filed over the weekend.
The same documents reveal the team itself says it's worth only $67 million and has debts totalling $244 million. Part of that debt is $9.3 million owed to Gretzky, making him one of the largest creditors.
Oddly enough, Gretzky had given his blessing to a lesser offer from Chicago sports magnate Jerry Reinsdorf but stands to profit if Balsillie wins the team.
When he kick-started the bankruptcy controversy, Balsillie had promised to pay Gretzky up to $22.5 million as part of his $212.5 million bid for the franchise. That included $8 million to cover payments Gretzky deferred to help the troubled team, and another $14.5 million should Gretzky choose to quit as coach.
"We feel that – by far – we have the business proposal to address creditors," said Balsillie spokesman Bill Walker.
Gretzky is owed the money because he deferred salary to help the team. His claim is listed as "unsecured" and "nonpriority," which means he'd be among the last in line to be paid from the proceeds of a Coyotes sale.
Gretzky has been notably quiet on the sale, but those who know him say he gave his blessing to Reinsdorf, who was putting together an offer in the $130 million range when Coyotes owner Jerry Moyes filed for bankruptcy. Reinsdorf would keep the team in Phoenix.
Balsillie and Moyes will co-apply to the NHL today to move the team, a legal move designed to set up an anti-trust lawsuit should the NHL reject the application.
"NHL bylaws lay out a three-part criteria: owner, market and arena," said Walker.
"We think this bid exceeds all three criteria with a proven business leader as owner, the best unserved hockey market in North America and a state-of-the-art arena renovation."
While Gretzky might profit from a Balsillie victory, there's no guarantee that Balsillie's offer will survive beyond a June 9 hearing on relocation, and no guarantee another offer would pay off all creditors.
The co-chief executive officer of Waterloo-based Research In Motion has threatened to withdraw his purchase if he's not allowed to move the team to Hamilton.
Judge Redfield Baum will hold a hearing next week to determine whether the Canadian suitor has the power to ignore the NHL's constitution, void the Coyotes' lease with the city of Glendale and allow the team to leave Arizona.
Most believe a team that must remain in Phoenix is worth considerably less to potential buyers and might not generate enough proceeds to cover all creditors.
The NHL is owed about $34 million – although the league says the true number is closer to $13 million – as the first secured creditor.
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