Balsillie Rejected By NHL

((HT: GlobeSports/Waldie))

The NHL executive committee has rejected Jim Balsillie's application to become owner of the Phoenix Coyotes.

Balsillie can still bid for the club, which he plans to move to Hamilton, and he is expected to forge ahead with his offer.

The committee met with Balsillie today in Chicago to go over his application to buy the club. Balsillie had submitted an application as part of his bid to buy the Coyotes out of Chapter 11 protection.

The committee gave a welcome reception to a proposal by Ice Edge Holdings, which wants to buy the Coyotes, keep the club in Phoenix but play five regular-season games in Saskatoon. However, the committee did not formally approve the idea. Ice Edge is made up of about six investors, mainly from Canada. The group said it plans to press ahead with its offer.

A $148-million (U.S.) bid by Chicago businessman Jerry Reinsdorf, who also wants to buy the club and keep it in Phoenix, was given the thumbs up by the committee.

"Mr. Reinsdorf's application was unanimously approved by all those Board members present and voting, subject to the League's completion of its due diligence and review of the final transaction," the league said in a statement.

"In Mr. Balsillie's case, it was the unanimous vote of all members present and voting that his application not be approved. With respect to [Ice Edge], it was determined that, at this stage, since they've only recently begun the process, the application was incomplete and could not yet be acted on by the Board. However, the Executive Committee reported favorably on the [Ice Edge] group's interview and endorsed the group's continued efforts to complete a bid to purchase the franchise."

Full NHL statement below:

National Hockey League Commissioner Gary Bettman issued the following statement following today's Board of Governors meeting:

"The National Hockey League's Board of Governors met this afternoon to review the ownership applications of three prospective ownership groups for the Phoenix Coyotes. The Board's process today represents the League's best efforts to comply with the League's review procedures pursuant to NHL Constitution Article 3.5 and NHL By-Law 35 within the timetable imposed by the ongoing court process.

"There were three applicant groups that were interviewed by the Executive Committee and considered by the Board. One was Jim Balsillie's. The second was a group headed by Anthony LeBlanc, involving Mr. LeBlanc, Keith McCullough, Todd Jordan and Daryl Jones. And the third group, headed by Jerry Reinsdorf, included as well Tony Tavares and John Kaites.

"After interviewing all of the applications, the Executive Committee brought forward recommendations to the full Board of Governors.

"Mr. Reinsdorf's application was unanimously approved by all those Board members present and voting, subject to the League's completion of its due diligence and review of the final transaction. In Mr. Balsillie's case, it was the unanimous vote of all members present and voting that his application not be approved. With respect to the LeBlanc group, it was determined that, at this stage, since they've only recently begun the process, the application was incomplete and could not yet be acted on by the Board. However, the Executive Committee reported favorably on the LeBlanc group's interview and endorsed the group's continued efforts to complete a bid to purchase the franchise.

"We will so advise the Bankruptcy Court and we will move this process forward."


The Balsillie camp statement below:

PSE Sports and Entertainment, the company which represents Jim Balsillie’s $212.5-million bid to purchase the Phoenix Coyotes and relocate the team to Hamilton, Ontario, issued a statement today regarding the NHL’s position on Mr. Balsillie’s ownership application.

“We do not think that Jim Balsillie’s qualification to be an NHL owner is an issue in this case given his 2006 approval as an NHL owner,” said PSE spokesman Bill Walker.

“We note that the bankruptcy court Judge Hon. Redfield T. Baum ruled in his June 15 decision that:

‘Absent some showing by the NHL that there have been material changes in PSE’s circumstances since 2006, it appears to the court that the NHL can not object or withhold its consent to PSE becoming the controlling owner of the Phoenix Coyotes.’

Walker noted that Judge Baum cited the legal precedent of Memorial Coliseum v. National Football League (known as the “Raiders” case) as showing that ‘a right of approval or disapproval or a discretionary power… must be exercised within the parameters of the duty of good faith.’

“Presumably the onus will be on the NHL to demonstrate a material change in PSE’s circumstances, although no such change was raised with us today,” Walker said. “Beyond that we have confidence in, and respect for, Judge Baum and the legal process as this case unfolds.”