Buyers apply to keep Coyotes in Arizona
PHOENIX -- NHL commissioner Gary Bettman says four prospective buyers have filed preliminary background applications to purchase the insolvent Phoenix Coyotes and keep the team in Arizona.
The interested parties include Jerry Reinsdorf, owner of baseball's Chicago White Sox and the NBA's Chicago Bulls; Howard Sokolowski and David Cynamon, co-owners of the Toronto Argonauts of the Canadian Football League; and Las Vegas-based businessman John Breslow, who owns 3 percent of the Coyotes.
The fourth prospective buyer requested anonymity while further investigating the possible purchase, Bettman said in a declaration filed in U.S. Bankruptcy Court.
Bettman's declaration was among a flood of documents filed deep into the night Friday in the attempt by Canadian billionaire Jim Balsillie to purchase the Coyotes through a Chapter 11 bankruptcy proceeding and move them to Hamilton, Ontario, over the objection of the NHL.
Judge Redfield Baum set a midnight Friday deadline for filings on whether he should order the sale and transfer of the franchise over the league's opposition. A hearing on the issue is set for Tuesday.
No purchase offer to keep the team in Arizona is expected to come close to the $212.5 million Balsillie is offering, but the Canadian's proposal is contingent on moving the team to Hamilton. Balsillie says he will withdraw his bid if the sale is not completed by the end of June.
The NHL, which wants to keep the team in Arizona, says it controls who owns clubs and where they are located, and without membership in the league, a franchise in Hamilton wouldn't be worth much.
"At most, the proposed transaction would transfer a collection of used hockey equipment -- none of which could bear the NHL logo," the league said.
But keeping the team in Arizona would be "throwing good money after bad," Balsillie's attorney Susan Freeman said in a conference call Saturday.
In his declaration, Balsillie -- whose company that makes the Blackberry -- said he aspires to be "a good NHL owner, who will work with the league and other clubs within the rules."
But the NHL contends that the Canadian -- whose previous attempts to buy the Pittsburgh Penguins and Nashville Predators fell through -- is using the bankruptcy court to sidestep the league's rules for ownership and relocation.
Major League Baseball, the NFL and the NBA filed a joint brief in support of the NHL, warning that an adverse ruling could undermine the ability of all sports leagues to control their membership.
In a court document, attorneys for Coyotes owner Jerry Moyes scoffed at such a notion.
"This will not destroy the NHL [or MLB, or the NFL, or the NBA, or indeed the Professional Badminton Association]," the Moyes document said.
Balsillie said he would be willing to put off the move for a year, but only if the NHL funded the team and covered the inevitable losses of another season in Arizona.
The NHL believes that with a reworked lease agreement, a new owner, better management and a winning team, a franchise can be successful in Arizona, where according to Moyes the Coyotes have lost more than $300 million since moving from Winnipeg in 1996.
However, Balsillie's attorney Freeman wrote that "failure to relocate the club merely delays the inevitable, to the substantial detriment of the Coyotes' creditors."
A move to hockey-crazy Hamilton, on the other hand, "will make the franchise one of the strongest in the league from a business and hockey perspective," Balsillie said in his declaration.
Balsillie and Moyes contend that blocking the transfer of the team would be an unreasonable restraint of trade under antitrust law. They cite the court rulings in the early 1980s that held the NFL improperly denied the move of the Oakland Raiders to Los Angeles.
The NHL, however, says that its rules comply with the law as interpreted in subsequent court rulings. They also say that Al Davis was owner of the Raiders at the time of that fight, while Balsillie does not own the Coyotes.
One of the central issues is whether their is a "bona fide dispute" between Balsillie and the NHL. The NHL says that since Balsillie only recently applied to the league for ownership and relocation of the franchise, there isn't time for the league's owners to act on those proposals.
However, NHL attorney Tony Clark has said in court that there is no way the league would approve the relocation, that it wants to find a buyer to keep the team in Arizona.
Freeman points out an NHL rule that gives a team to veto the move of another franchise into its territorial rights as evidence of unfair trade practices. The NHL, however, says that since the early 1990s the league has required only a majority vote of owners to approve a move.
The city of Glendale is also fighting the proposed sale and move. Glendale built Jobing.com Arena for the Coyotes and the team has 23 years left on its lease to play there.
Moyes contends that the bankruptcy action voids the lease.
Copyright 2009 by The Associated Press