It appears as though the Phoenix Coyotes are going to play in Glendale for the 2009-10 NHL season. They might be a pathetic shell of a franchise, with one eye on the guillotine blade over its head, the other on the U-Haul trucks rolling towards the arena and about 12 season-ticket holders. But they also won't be in Hamilton. At least not yet.
That's the impression from yesterday's four-hour U.S. bankruptcy court hearing in Phoenix, that saw Judge Redfield Baum send the NHL and Coyotes "owner" Jerry Moyes to mediation in an attempt to figure out who actually owns the team.
With that question unsettled, the timetable for relocating the Coyotes appears to work against billionaire Jim Balsillie's plan to purchase them and ship them to southern Ontario. From the Arizona Republic:
The control issue, however, might be irrelevant if the judge agrees with the NHL that the team can't be moved without consent of other owners. Baum ordered both sides to present written arguments by June 12 regarding whether the team can be relocated to Canada or stay in Glendale. A hearing is set for 10 a.m. June 22.
Until that is determined, an auction for the team cannot occur. That is a setback for Balsillie, who wanted the sale to close by June 26, the first day of the NHL draft. Balsillie could pull out if the judge rules the team has to remain in Glendale indefinitely.
With no date set for an auction and the judge being unavailable from June 25 to July 3, a final resolution might not occur until later this summer. Bankruptcy cases can last months or even years.
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First off, the NHL could go 1-for-2 in this hearing and still manage to keep Balsillie from destroying its system for franchise relocation and ownership.
The judge clearly states that the proxy arrangement between the League and Moyes was insufficient in determining who actually "owned" the team; hence the mediation, a process that CBC Sports breaks down nicely in a Q&A today.
So there is a chance that Moyes still "owns" the Coyotes. But the NHL can lose that battle and win the war if the court finds that only the NHL can grant permission to relocate teams, which is at the heart of Balsillie's rebellious bid to move the franchise. From the Globe & Mail's excellent coverage:
Bill Daly, the deputy commissioner of the NHL, said he was confident "decades of court rulings" will mean Judge Baum - who started yesterday's hearing saying he did not want to rule on the relocation issue - will uphold the NHL's contention that only it can decide where teams are located and that all Mr. Moyes has the right to sell is a team that plays hockey in Arizona.
"The biggest issue is, is this a mobile asset and we have to decide that before we have an auction," Mr. Daly said. "I'm confident in the court's ability to decide the issue. Many courts have decided the issue over many years and sports leagues have always maintained the ability to control the locations of their franchises. I don't expect anything different here."
As we previously mentioned, the NHL has the backing of the other major sports leagues in keeping those rules in place. But as Darren Dreger points out for TSN, the court's "sole responsibility is to the creditors." Which could even mean an auction for the franchise rather than a direct sale to Balsillie.
Balsillie's group didn't help itself in the way it tried to circumvent the process, because it's hard to prove you're being stonewalled when you've never actually tested the wall. Again, from the Globe & Mail:
[The judge] chided the Phoenix lawyer who represented Mr. Balsillie in court, Susan Freeman, for not making a formal application to the NHL to move the team.
The judge argued it was hard for Mr. Balsillie and Mr. Moyes to make the case that the NHL was unreasonably blocking their attempts to take over the team and move it if there had been no application to the league to do so.
When Ms. Freeman suggested NHL commissioner Gary Bettman was steadfastly opposed to approving a Balsillie bid, Judge Baum reminded her that decision is made by the board of governors.
The bottom line is that the NHL hastily took over the Coyotes without explicitly spelling out what would happen if Moyes attempted to do what he's done. And Balsillie's group hastily tried to uproot the franchise by claiming the NHL wouldn't let them do it without, you know, asking the NHL if it could. And now a judge is rightfully telling them both that their sloppy approach to this matter has muddied the issues.
Some other news and views from the Coyotes mess:
• We might have a non-Reinsdorf, perhaps Gretzky-involved group headed by Coyotes minority owner John Breslow trying to buy and keep the team in Phoenix? David Shoalts believes so.
• Blogger Greg Esposito of the Save The Coyotes Coalition speaks with the Arizona Republic about "feuding" with Canadian fans and media -- including a decision not to destroy a slew of BlackBerry phones to protest Balsillie.
• So, did you figure Winnipeg would be overjoyed with the news that the Coyotes could be offered to the city? Not when the chorus is "don't get your hopes up," "games are too expensive" and "Winnipeg can't support a team anyway."
• Columnist Stephen Knight: "I don't recall Bettman being quite so determined or chivalrous when Winnipeg was dumped in favour of Phoenix or when Quebec City was dumped in favour of Colorado. This is not to make any hysterical claims that Bettman is anti-Canadian." OK then.
• Finally, tough talk from Gary Bettman critic Ken Campbell of The Hockey News: "We know now, because of this process, what everyone suspected for a long time - that the NHL was whistling in the dark about its situation in Phoenix and that the losses were staggering. Not that we ever believed it before, but how are we supposed to now swallow Gary Bettman's happy talk when he tries to convince us things are going just swimmingly in markets such as Nashville, Florida and Atlanta?"