Balsillie ups Coyotes offer to $242.5M
PHOENIX -- Canadian billionaire James Balsillie has offered the city of Glendale $50 million to quiet its objections to his bid to buy the Phoenix Coyotes and move the franchise to Hamilton, Ontario.
Lawyers for Balsillie, co-CEO of the company that makes the Blackberry, filed an amended bid in U.S. Bankruptcy Court on Monday adding the offer to Glendale. Balsillie offered to buy the franchise for $212.5 million, contingent on moving it to Ontario.
The new bid would subtract $20 million from the original and combine it with another $30 million to pay the city. If Glendale accepts the offer, Balsillie's bid would stand at $242.5 million.
The NHL bid $140 million to buy the team and keep it in Arizona after its board of governors voted 26-0 with three abstentions against Balsillie as an owner.
The team is to be sold at auction on Thursday, but many legal issues have yet to be resolved.
Glendale has estimated losing the Coyotes would cost the city more than $500 million in losses, saying it planned on the team playing at Jobing.com arena for 30 years.
Balsillie's lawyers argue the city's estimate is too high, citing the 30-year projection and saying that revenue from the Coyotes has been about half of the projected estimates. They argue that $50 million is much more than what the city would get under the NHL's bid, saying that Coyotes owner Jerry Moyes sought to cap the city's claim at between $5 million and $7 million.
Balsillie's $50 million offer to the city is contingent upon Glendale accepting it by Sept. 30 and the Coyotes moving to Ontario.
Glendale's City Council met behind closed doors about the Coyotes on Tuesday, but city spokeswoman Jennifer Liewer said she could not say whether they discussed Balsillie's offer.
She said the council took no action and would have to decide on the offer in a public meeting.
She declined to say how Balsillie's offer has affected the council's objection to his bid.
"We're not going to negotiate this in the media," she said. "We're working through the process in bankruptcy court and trying to honor the wishes of the judge and go through the negotiations as the bankruptcy court dictates."
Balsillie wants Judge Redfield T. Baum to overrule the NHL's rejection of his bid and allow the Coyotes to move to Hamilton. He also is asking Baum to set a reasonable relocation fee if the NHL refuses to do so.
Two studies conducted for the NHL set a potential relocation fee of $101 million to $195 million to move the Coyotes to Hamilton. The NHL said even $195 million would not begin to address the true damage done to the league by moving the team.
The potential fees are in stark contrast to the $11.2 million to $12.9 million cited by economics professor Andrew Zimbalist in a study conducted for Balsillie.
Moyes took the team into Chapter 11 bankruptcy on May 5 with the plan to sell it to Balsillie. Under the Balsillie bid, Moyes would get $104 million of the $300 million he says he loaned to the team.
The league and city contend the money Moyes lost is not a debt but equity. They also want Moyes' claim subordinated to that of other creditors. The NHL's offer would give Moyes next to nothing.
The city also is arguing against a $22.5 million claim by Wayne Gretzky, the Coyotes coach who owns a small share of the franchise.
Baum has yet to rule on the ownership and relocation issues. He also has to decide whether Balsillie can get out of the Coyotes' lease to play at Jobing.com Arena, which was built by Glendale for $183 million specifically for the hockey team.
A third potential buyer, Ice Edge, had said it would spend up to $150 million to buy the team, but NHL Commissioner Gary Bettman said in a court filing Tuesday that he was advised Ice Edge no longer intends to participate in Thursday's auction.
If Ice Edge does not submit a bid, the field of buyers would narrow to Balsillie and the NHL.
The Coyotes are being funded by the NHL during the ownership fight. Balsillie wants to move the team immediately if the purchase is successful but offered in court to start the season in Glendale, then move as quickly as possible. NHL officials have ridiculed that idea and want the judge to rule that the team will play the coming season in Glendale.
Balsillie said he would agree to keep the team in Glendale for a season if the league splits the losses. Bettman said the league isn't interested in that idea.
The Coyotes play a preseason game on Sept. 15.
Copyright 2009 by The Associated Press
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