Ice Edge, Glendale Talks Break Down; Moyes Wins Round One With NHL

((HT: Arizona Republic/Sanders))

Talks between the City of Glendale, Arizona and Ice Edge Holdings, one of the groups interested in purchasing the Phoenix Coyotes, broke down late Monday afternoon- according to Grant Woods, Ice Edge's legal counsel. Ice Edge chief operating officer Daryl Jones told the Winnipeg Free Press Monday night that talks have broken off because Ice Edge didn't get an exclusivity agreement with Glendale, which the group required to continue negotiations.

Gary Lawless caught up with Jones: "We were adamant about needing exclusivity in these negotiations and they haven't provided it. I'm not totally surprised. We've been dealing with this for a while. We thought we had agreed to certain things and expected them in writing. That didn't materialize."

Ice Edge had previously said it expected Monday to finalize an exclusivity agreement for its negotiations with the city over a lease at Jobing.com Arena

The Glendale City Council is supposed to address at their next meeting Tuesday evening the idea of entering into an agreement that would guarantee to the NHL that the city would cover the team's operating deficits for the 2010-11 season if a permanent buyer is not found.

Good luck with that idea... especially if the whole Reinsdorf idea didn't work in the beginning- which led to the return of Ice Edge to the negotiating table.

The agenda for the evening can be found here...

Bruce Haffner was outside the arena for a live shot to explain the mess...
((HT: Azfamily.com/KTVK-TV))


Watch Glendale Channel 11 here for the meeting, scheduled for 11PM EST

INTERESTING SIDEBAR: Jerry Moyes has won round one in the battle over his lawsuit with the NHL. David Shoalts, in his Globe and Mail piece,says that US District Judge P. Kevin Castel ordered that the case be heard by the US District Court in Arizona because “the convenience of witnesses, the likely location of relevant documents … the convenience of parties … and the availability of witnesses associated with the bankruptcy proceedings all favor transfer.”

The case could even go in front of Judge Redfield Baum- the judge who oversaw the Jim Balsillie case last summer. The league is chasing, roughly, US$70-million from Moyes over funds the NHL used to cover the team's operating expenses, losses, and legal fees from the court case...

PM UPDATE: From Bob Baum with AP and GlobeSports...

Talks between Ice Edge Holdings and the city of Glendale on a new lease agreement for the Phoenix Coyotes are not dead but “probably more like taking a nap.”

Judge Approves Sale Of Coyotes

((HT: TSN/

Judge Redfield T. Baum agreed to sign the sale order to the NHL on Monday after lawyers made minor modifications to the deal.

None of the changes significantly altered the NHL's agreement to pay about US$140 million to buy the team from owner Jerry Moyes.

The only party who didn't join in the agreement is former coach Wayne Gretzky, who owned a small portion of the team. However, Gretzky did not file a formal objection with the court.

As part of the deal, the league will reduce the amount of money it says Moyes owes it from $30 million to $15 million.

The sale leaves about $11.6 million that could be divided among Moyes, Gretzky and Glendale, but that figure is expected to drop by a few million when attorneys' fees and other administrative costs are subtracted. It is expected to take several months to determine the exact payouts.

Under the purchase agreement, all the unsecured creditors would be paid except Moyes, Gretzky and Glendale ((jobing.com Arena is pictured, thanks Getty Images)). The largest secured creditor, SOF Investments, will get all of its $80 million, either in cash or over time in an agreement with the NHL.

Those of us at OSG HQ would like to remind everyone that both Ice Edge and the Argos group of Cynamon and Sokolowski are interested in playing by The Bettman's rules for now- and could, probably, pick up the Dogs for a song.

Whoever that group is: Look for them to move the franchise after a few years straight of empty seats in the middle of the desert.

Bettman "Fighting For Phoenix"

((HT: Arizona Republic/Podell))

NHL commissioner Gary Bettman ((pictured, thanks Arizona Republic)) insists he is merely trying to keep the Coyotes in Phoenix, not block Jim Balsillie from buying the team and setting up shop in Ontario.

Bettman sat in a hotel ballroom in the heart of Hockeytown on Saturday and spent much of his time answering questions about the struggling desert-based Coyotes franchise that landed in bankruptcy court against his will.

Just hours before the Detroit Red Wings began defense of their Stanley Cup title in the finals opener against the Pittsburgh Penguins, Bettman spoke of his desire to find a new owner for the Coyotes.

Team owner Jerry Moyes recently filed for Chapter 11 bankruptcy protection, a plan that included the proposed sale of the club to Balsillie, who would move it to Hamilton, Ontario.

The NHL - with support from the NFL, Major League Baseball and the NBA - has asked Judge Redfield Baum to uphold that the league has a right to determine who owns a team and where it plays.

"The issue here is league rules and league processes and procedures," Bettman said. "This is not just an NHL issue. This is not a Canada versus U.S. issue. This is not a Phoenix versus Hamilton issue. And this is certainly not a personal issue."

Mere minutes before Moyes filed for bankruptcy, the NHL was close to selling the team to Chicago Bulls and Chicago White Sox owner Jerry Reinsdorf, who would keep the team playing in its relatively new arena in Glendale, Ariz. The issue of who controls the Coyotes is also in dispute.

"The team was never in jeopardy," Bettman said. "It was literally 20 minutes away from being fixed in a way that we thought was going to work quite well. It's my view that the Coyotes should not be in bankruptcy."

Keeping with the theme of the finals, Bettman noted that the Penguins were in worse shape than the Coyotes when they filed for bankruptcy in 1999. That situation looked particularly bleak because there was no assurance Pittsburgh would get the new arena the team desperately needed.

With core players Sidney Crosby, Evgeni Malkin, and Marc-Andre Fleury, the Penguins are in the finals for the second straight year and look forward to a new arena for the 2010-11 season.

"We didn't walk out on Pittsburgh, we fought to fix their problems," Bettman said. "We're fighting for Phoenix because of our covenant with the team and the fans there."

The Coyotes never have made a profit since moving from Winnipeg in 1996. Court documents say the franchise lost $74 million over the past two years. Moyes says he has a $300 million investment in the team and would recoup only about $100 million in the sale to Balsillie.

The NHL has funded the team since last fall.

"It's about league rules and it's about doing the right thing in terms of the stability of this game and this league," Bettman said.

While saying several times this is not a personal issue against Balsillie, Bettman declined to offer his opinion whether he sees any way the owner of the company that makes the Blackberry would ever be able to acquire an NHL franchise.

"If and when the board is going to consider Mr. Balsillie as an owner, if I am asked my opinion, I will express it. And I'll express it to the Board first before I express it to the world," Bettman said. "If, in the final analysis, the owners conclude that he is somebody that they'd like to have as a partner, then they'll vote him in. And if in the final analysis, they don't think he's suitable to be a partner for whatever reason, they'll conclude to keep him out."

Judge Moves Up Coyotes Timetable

((HT: Arizona Republic/Craig Harris))

A judge handling the Coyotes bankruptcy case could decide in two weeks whether the financially beleaguered team stays in the desert or moves.

U.S. Bankruptcy Judge Redfield Baum on Wednesday put on a fast track a decision whether the highest bidder could relocate the team. A hearing will occur June 9, and the judge said he would rule shortly thereafter. A hearing on the issue previously wasn't scheduled until June 22.

Saying he wanted to deal with the "10,000-pound elephant in the room," the judge said it was beneficial to all sides to quickly determine whether the team could relocate.

The Coyotes sought Chapter 11 bankruptcy protection May 5, and as part of a reorganization plan owner Jerry Moyes agreed to sell the team to Canadian billionaire Jim Balsillie for $212.5 million. The deal, however, is contingent on Balsillie moving the team to Hamilton, Ontario. No other bidder has officially made an offer for the team.

The National Hockey League and city of Glendale, where the team plays, have vigorously opposed the sale. The NHL says it alone can approve who owns a team and where a franchise plays. Glendale, which spent $180 million on Jobing.com Arena, contends it has a valid lease that obligates the Coyotes to play there for 26 more years.

The Coyotes, who have lost more than $20 million a season and never have made a profit in Arizona, say because the team is bankrupt it's up to a judge to decide what's in the best interest of creditors and that should supersede the league's authority and the lease with Glendale.

If the judge rules in the favor of the Coyotes, it would set a precedent in professional sports, where leagues for the most part have long controlled who can own teams and where they play.
Major League Baseball, the NBA and NFL all have filed briefs in support of the NHL's position.
The NHL said if the Coyotes win, it would appeal the ruling to the 9th U.S. Circuit Court of Appeals.

The judge also set June 22 as the sale auction should the Coyotes win. If the NHL wins, an auction for the team is set for September 10.

Waldie and Shoalts have the details from the Globe and Mail as well...

The biggest issue they address is the idea of Jerry Moyes running the Coyotes in the interim...

Judge Baum announced that three executives of the current ownership group, led by Jerry Moyes, will run the team on a day-to-day basis. Moyes's group and the National Hockey League will also appoint one person as a “point person” who will review the finances on a weekly basis. If the two point persons can't agree on something, either one can bring the issue to court.

The ruling is on an interim basis only and the judge will continue to hear arguments about who controls the club.

The NHL has argued Moyes turned over control last fall in return for financing. Moyes has argued the league was only giving voting control over some issues and that his group retained day to day authority.

Balsillie Sets Coyotes Deadline

((HT: Arizona Republic))

Jim Balsillie's bid to purchase the Coyotes and move the franchise to southern Ontario, Canada, will be withdrawn if it isn't approved by the U.S. Bankruptcy Court by the end of June.
Balsillie's deadline appears in documents filed Tuesday by the attorneys for Coyotes owner Jerry Moyes.

The Canadian businessman says the sale must be completed before the end of next month to allow for setting the team's schedule for the coming season, readying its new home arena in Hamilton and resolving other matters.

Balsillie has offered $212.5 million to purchase the team, contingent on moving it to Hamilton. The NHL wants to find a buyer to keep the franchise in Glendale and says Balsillie needs league approval to purchase and move the team.

David Shoalts from the Globe and Mail continues...

Thomas Salerno said in the document that Balsillie notified the Coyotes that he made this ultimatum in his offer because he “nor any other known entity will fund another year of significant losses.”

Balsillie had said at one point he would be willing to keep the Coyotes in Phoenix for one more year as long as the NHL was willing to pay for the losses. But the NHL declined to respond. This season, the Coyotes are expected to lose more than $45-million (all currency U.S.).

The statement was made as part of a request for amended bidding procedures that was filed in preparation for Wednesday's hearing before U.S. Bankruptcy Court Judge Redfield T. Baum.

The judge is to get a progress report on mediation between the NHL and the Coyotes on how the team will be operated before the sale and to set a timeline for a bankruptcy hearing and sale.

The sale can only proceed if the judge rules at another hearing, scheduled for June 22, that the Coyotes can be moved.

At this point, both sides have agreed on how the Coyotes will operate but have significant differences on the timing of a sale and relocation.

Balsillie, the co-founder of Research In Motion, has offered to buy the Coyotes on the condition he can move them to Hamilton for the coming hockey season. He and the Coyotes originally wanted this completed by the end of June but in the amended request filed on Tuesday they want the deadline moved up to June 12.

Salerno argues that this will allow the new owner “adequate time to, among other things, get the new arena ready for the 2009-10 season, obtain and line up sponsors and television contracts, and sell tickets to games.” It will also give the new owners control of the team before the NHL draft begins on June 26.

The request notes the NHL has agreed to a similar deadline (June 15) but with the exception that the league wishes more time to review ownership and relocation applications. But that is a major sticking point, since the league argues it is not possible to move the Coyotes until the 2010-11 season. The NHL says there are relocation procedures to be followed and the 2009-10 schedule has already been determined.

Judge Baum will have to sort out the disagreement at Wednesday's hearing.

Kevin McGran gets in to the details of the document in the Toronto Star...

Temporary Truce Between Coyotes and NHL

((HT: Shoalts/GlobeSports))

The war in Phoenix has reached a temporary truce as the NHL and Coyotes majority owner Jerry Moyes will tell a bankruptcy court judge tomorrow they have essentially agreed on how to operate the team.

Judge Redfield T. Baum has scheduled a hearing for a progress report on the mediation he ordered on the issue of who controls the team and how it will operate. The judge said last week the matter was largely irrelevant since both sides want to sell the team, but he was prepared to make a ruling if they could not agree.

The NHL will continue to lend the Coyotes money to keep them operating. The league said in court documents filed this month that it lent the team $13.4-million (all currency U.S.) after advancing it $31.4-million from its portion of revenue sharing.

A source of conflict remains: the timeline for the bankruptcy petition, sale of the team and its possible relocation.

The Moyes camp wants it done quickly so that the winning bidder, be it Jim Balsillie and his $212.5-million offer or anyone else, can move the team by the start of the season this fall and avoid another year of $40-million losses in Phoenix.

The NHL is adamant that is too soon for a move. The league cited its procedures for allowing a franchise to move and logistical problems with the schedule.

NHL deputy commissioner Bill Daly confirmed in an e-mail that an agreement is basically in place on operating the team. As for the timeline, Daly wrote: “I guess it will be up to the court to decide.”

It could not be confirmed, but it appears the Coyotes will operate as they have since the NHL began giving the team financial assistance last November. The team’s executives will handle the day-to-day decisions subject to NHL approval.

Meanwhile, Balsillie is working on the housekeeping aspects of his bid to buy the Coyotes out of bankruptcy and win a court decision allowing him to move them to Hamilton. One week from today, the co-founder of Research In Motion expects to officially apply to the NHL to move the Coyotes, as directed by the court.

In the unlikely event the governors approve the bid, then Judge Baum will not need a hearing on June 22 to decide the relocation issue and the court fight will probably end.

Most likely, though, the governors will reject the bid or reserve a decision, which means Judge Baum will decide if the team can be moved, possibly at the hearing on June 22. There is also an anti-trust lawsuit pending, filed by the Coyotes’ owners, which accuses the NHL of acting as a cartel to prevent the Coyotes from doing business by moving to a better market.

The website established to support Balsillie’s efforts to move the team to Hamilton has become so popular, its merchandise is being exploited by knockoff artists.

Balsillie’s spokesman, Bill Walker, issued a warning yesterday about counterfeit merchandise being sold.

Balsillie Submits Formal Bid To NHL

((HT: TSN/CP))

Jim Balsillie ((pictured, thanks Getty)) has formally asked other NHL owners to let him into the club.

The Canadian billionaire filed an application with the league's board of governors seeking a transfer of the Phoenix Coyotes ownership interest, one of his representatives confirmed Monday.

During a bankruptcy hearing last week, Judge Redfield T. Baum questioned why Balsillie was pursuing an antitrust suit against the NHL if his bid to buy the team hadn't officially been turned down. He's expected to file an application to move the team early next week.

If the board of governors vote down his $212.5-million bid or withhold a decision on it, court proceedings will continue with a scheduled June 22 hearing in Phoenix, where Baum is to hear arguments about whether the franchise can be relocated as part of a sale.

In the meantime, the parties will be back in court Wednesday to provide an update on mediation between Coyotes majority owner Jerry Moyes and the NHL over who currently controls the team.

There is still some work to be done on that front.

"There has been no mediation," deputy commissioner Bill Daly said in an email. "The parties have exchanged ideas. Nothing has been finalized to this point."

During last week's hearing, lawyers for the NHL said the league would be comfortable paying the Coyotes bills until a new buyer for the team is found.

Unless the board of governors takes the unlikely step of approving Balsillie's bid, the court will likely end up overseeing an auction for the team over the summer.

Kevin McGran adds from the Toronto Star

A second application – from Phoenix Coyotes owner Jerry Moyes – to move the team to Hamilton is expected to be filed next week.

If the Blackberry baron wins approval from the league's board of governors, he'd be that much closer to having a team in Hamilton. If he fails to gain approval, his camp believes it would have the basis for an antitrust suit, a legal manoeuvre with the goal of having the team play in Copps Coliseum next season.

Balsillie has been approved before, when he came close to buying the Pittsburgh Penguins in 2006. He and his camp – as outlined in their various court filings – believe a failure to approve him this time would show bias on behalf of the NHL in large part because of his oft-spoken goal to bring a seventh team to Canada.

NHL commissioner Gary Bettman has repeatedly said there is no ill-will between him and Balsillie, but the league wants Balsillie to follow the rules. The league believes Balsillie is trying to sidestep the rules by acquiring the money-losing team in bankruptcy court.

Moyes, NHL Headed To Mediation

((HT: TSN/CP))

Hockey fans in Southern Ontario will have to wait more than a month to find out if plans to move the NHL's Phoenix Coyotes to the region can be made a reality after a ruling by a U.S bankruptcy court judge on Tuesday.

Judge Redfield T. Baum, presiding over the Coyotes' bankruptcy case, set a new hearing for June 22, when the league and Coyotes majority owner Jerry Moyes will give arguments about whether or not the franchise can be relocated as part of an agreement to purchase the team.

That will help determine exactly what potential purchasers, including Canadian billionaire Jim Balsillie, will be bidding on. Balsillie has made a US$212.5-million offer for the team, with the condition that he be allowed to move it to Hamilton.

"It seems like in large part that (the relocation) issue is driving the case right now," said Baum.

Referring to relocation as a "hot-button issue," the judge wasn't prepared to make an immediate decision on it -- even though lawyers from the NHL suggested that he should.

He took note of the support the NHL received from the NBA, NFL and Major League Baseball in statements filed to the court.

"It appears that this issue has attracted a lot of attention from folks who are concerned about it," said Baum.

Ultimately, both sides seemed happy with Baum's decision to settle the relocation issue before putting the team up for auction in the court.

NHL deputy commissioner Bill Daly says it will bring more "clarity" to the process while Richard Rodier -- a representative for Balsillie -- claims it gives his client a better chance to finally buy a team and move it to Hamilton.

"It makes the process more transparent than it otherwise might be," said Rodier. "There's a number of a stakeholders who should be able to see the process. Our point of view is that the people of southern Ontario and Canadian hockey fans generally need to be able to have a good look at how the NHL treats the relocation application and indeed how it treats its best customer by far."

Balsillie said in a statement that he was satisfied with Baum's stance settling the relocation issue.

"But let's be clear, I am moving forward," the statement continued. "I have tabled a comprehensive and attractive offer. I will also be filing formal applications to the NHL both for transfer of ownership and for relocation to Southern Ontario to my chosen Hamilton Copps Coliseum venue. I am being open and transparent about this as I've been from the beginning."

One thing the judge didn't establish was who is currently in control of the team.

Instead, he ordered the NHL and Moyes to enter into mediation and asked them to return to court on May 27 to provide a status update. Both sides claimed in court documents that they were in charge of the Coyotes.

"You guys are either going to mediate this or I'm going to rule on it," Baum said.

The judge said he ordered mediation because he wasn't interested in having the two sides continue putting so much effort into arguing over what is essentially a moot point.

"Why are we arguing about who has their hands on the steering wheel of a car that's going to be sold in 60 days?" Baum said.

The judge made it clear that a ruling needs to be made on whether the Coyotes can be relocated before an auction is held to sell the team.

The idea is to assure that the highest bidder comes forward -- and that everyone knows exactly what they're bidding on. It also means that someone else could come forward and offer more than what Balsillie has on the table.

"It's very important to try and keep the playing field as level as possible," said Baum.

Moyes has plunged more than $300 million into the Coyotes and stands to lose the majority of that investment even if Balsillie is allowed to purchase the team.

The trucking magnate has lived in the Phoenix area for the past 42 years and describes himself as an "accidental owner" of the Coyotes. He started as a small investor before increasing his stake to try and protect the investment, eventually purchasing the team from Steve Ellman.

He believes that Balsillie's bid will do the most to satisfy the team's creditors -- a group he claims the league has little interest in.

Balsillie has aggressively sought support in Canada since making his bid on May 5. In addition to bringing in corporate sponsors and reaching out to fans through his website http://www.makeitseven.ca/, he's also tried to outline his vision for another NHL team north of the border during a number of interviews.

David Shoalts from the Globe and Mail is in black...

Paul Waldie breaks down how it all began...

Joe O'Connor and Sean Fitz-Gerald were in Phoenix for the National Post...

"I don't see what mediation will solve if both sides are convinced that they are right - and they are convinced, since to give in now ruins everything," said Rick Powers, the associate dean at the University of Toronto's Rotman School of Management.

"What the judge did answer was the importance of this issue. Everything rests on this question. If Moyes had the right to petition the club into bankruptcy, then he probably has a right to strike a deal with Balsillie."

Your Daily Balsillie Update: Hearing Tuesday

Redfield
((HT: TSN/CP))

One day before the future of the Phoenix Coyotes was set to become clearer, the NHL received some major support in its attempt to block the sale of the team.

The three other major North American pro sports leagues all filed court statements Monday asking the bankruptcy court to respect the NHL's rules on ownership transfer and relocation.

The NBA, NFL and Major League Baseball all expressed concern that the NHL's case with Coyotes majority owner Jerry Moyes could set a dangerous "precedent".

Judge Redfield Baum will preside over an afternoon bankruptcy hearing Tuesday and determine who controls the Coyotes.

The latest batch of court filings on Monday included an email from NHL commissioner Gary Bettman that confirmed he would prefer to see a team located to Winnipeg rather than Hamilton because of aging Copps Coliseum. An affidavit from Coyotes lawyer Earl Scudder had previously made that claim.

One of the most challenging parts of Judge Baum's job will be sifting through the 100-plus documents filed so far and establishing which version of events is most accurate. There is a sizeable gap between statements filed by the NHL and those given on behalf of Moyes.

The discrepancies can been found in details both big and small, but generally centre around the question of which side has authority over the NHL team.

That trend continued with Bettman's affidavit in which the commissioner alleges that he has been "completely responsible for control of the ownership interest" in the Coyotes since Moyes signed a proxy agreement in November. That runs contrary to statements previously given by Moyes and others on his side.

Bettman insists that he ordered Jeff Shumway's removal as team chairman and CEO back in January: "I had the complete authority to make changes to the management structure of the club and exercised that authority."

Moyes has said that Shumway resigned.

The commissioner also challenges the sworn statement given by Scudder, labelling it "inaccurate and incomplete."

In his filing, Scudder recalls an April 3 conversation with Bettman in which he informed the commissioner that someone -- later identified as Canadian billionaire Jim Balsillie -- was interested in buying the Coyotes and moving them to southern Ontario. Bettman claims he then told Scudder that he had no authority to talk to anybody about moving the team -- a point that isn't mentioned in Scudder's statement.

Any hope Balsillie has of bringing the Coyotes to Hamilton hinges on Tuesday's hearing. If the judges rules that the NHL is in control of the team, then Balsillie's US$212.5 bid to purchase it out of Chapter 11 bankruptcy is going nowhere.

He'll still have some hope if Moyes is deemed to possess control of the Coyotes, although Balsillie's ability to purchase them and move them to Hamilton will remain contingent on the judge's ruling about whether a 30-year arena lease with the city of Glendale, Ariz., can be broken and the results of a separate antitrust case with the league over relocation.

SIDEBAR: FOSG "Clubber" Lang of Rogers Sportsnet had to address some of these issues in his weekly mailbag...