No additional hearing for relocation fee
PHOENIX -- The issue of how much Canadian billionaire Jim Balsillie should pay the NHL to move the Phoenix Coyotes to Hamilton, Ontario, will not be the subject of another hearing in U.S. Bankruptcy Court.
Judge Redfield T. Baum said Thursday that he will deal with the fee issue as part of his ruling resulting from a 6½-hour relocation hearing held Tuesday.
Baum made the comment during a brief hearing Thursday requested by the Salt River Project utility for assurances that it would be paid for future electric service to the franchise.
Baum had indicated he might hold a separate hearing on the fee issue. The judge said Tuesday that he believes the NHL is entitled to a fee, leading to widespread speculation of how big it might be.
The league has indicated it would seek a relocation fee as well as an indemnity fee to pay the franchises in Toronto and Buffalo for lost territory, a number that could reach hundreds of millions of dollars.
However, the court would have to determine any fee as fair.
Hamilton is just down the road from Toronto, where the Maples Leafs are considered the most valuable franchise in the NHL. Forbes magazine estimated the Maple Leafs' worth at $448 million. The magazine said the Coyotes are the league's least-valuable franchise at about $142 million.
Baum has made it clear that a franchise in Hamilton is more valuable than a franchise in Arizona.
Balsillie is offering $212.5 million for the Coyotes, contingent on moving the team. Any fee to the league would be separate from that offer.
Just when Baum will rule on the crucial relocation issue was uncertain. Attorneys for Coyotes owner Jerry Moyes filed an emergency motion Thursday seeking a hearing on the assumption of the contracts of 50 Phoenix players.
"It is absolutely imperative that the proposed sale, or a transaction with another party, close as soon as possible," the motion said.
Moyes wants the contract assumption hearing to be held June 22, the same day Balsillie wants to get an order from the judge allowing him to purchase the team. Baum said Tuesday he might go along with the June 22 purchase date to force the NHL to come up with a figure for the relocation fee.
Under Moyes' proposal, Balsillie's company, PSE Sports, would assume the player contracts when it takes over ownership. The team currently is being funded by the NHL.
If the fee is too big, Balsillie might balk and the NHL will get its way in court. The league says it has four prospective buyers who would keep the bankrupt team in Arizona, where it has lost more than $300 million since moving from Winnipeg in 1996.
The league says it will fund the Coyotes in Arizona for the coming season while the ownership issue is worked out.
The NHL has said that any new owner in Arizona would need to rework the lease agreement with the city of Glendale. That could be a politically difficult goal, since the city council would have to approve any changes.
The conservative Goldwater Institute, which strongly opposes government subsidies for private enterprise, has indicated it is closely watching the Glendale situation.
Balsillie says the sale must be completed by the end of June or he will withdraw his offer.
Copyright 2009 by The Associated Press