Balsillie still in the game
Next round centres on moving team to Hamilton
September 03, 2009
Ken Peters
The Hamilton Spectator
http://www.thespec.com/News/Local/article/627980
Jim Balsillie -- and Hamilton -- remain in the hunt for the Phoenix Coyotes.
On a day when an Arizona bankruptcy court was expected to rule on Balsillie's qualifications to become an NHL owner, Judge Redfield T. Baum reserved his decision on the character question yesterday after listening to lengthy arguments.
It was the relocation matter that emerged as the key issue and one that isn't expected to be determined until next week.
Baum wants to hear expert testimony and argument a week from today about whether the bankrupt Coyotes can be relocated to Hamilton. If Baum rules that can occur, then the prospective Hamilton franchise owner would participate in a sales auction with the NHL and Connecticut-based Ice Edge, likely the following day, Sept. 11.
It's unclear whether Baum would rule on the relocation issue the first day, which could kill Balsillie's bid, or reserve his ruling until the sales auction.
Balsillie has submitted a $212.5-million conditional offer to buy and relocate the Coyotes to Hamilton.
Baum listened to several hours of debate from lawyers representing the NHL and Balsillie's company PSE about whether the Waterloo billionaire's past league dealings make him unsuitable to become an NHL owner. Baum also heard arguments about whether the Coyotes can be relocated to Hamilton this season. He opted to reserve judgment on both issues.
But a number of interesting points were raised yesterday:
* Baum was able to get a confirmation out of NHL lawyer Shepard Goldfein that the league would submit by tomorrow midnight a court file outlining its views on a Coyotes' relocation and what it would expect Balsillie to pay in exchange for the right to relocate the Phoenix club.
* Baum was also able to get a confirmation from Goldfein that the league would challenge a Balsillie court victory and seek to have the decision set aside pending the outcome of the subsequent appeal.
"I haven't asked you," Baum asked Goldfein. "If I rule against you, is the NHL going to appeal?"
"You can count on it," Goldfein replied, adding the NHL would ask for the judgment to be put aside pending appeal.
"If we cannot choose our partners, if we cannot choose where we produce our product ... " Goldfein continued.
"My assumption is you're going to fight that battle for a while," Baum said.
"We're going to fight that battle to the highest level that we have to to get that answered," Goldfein finished.
* That confirmation and the subsequent battle over a possible relocation of the Coyotes this season sparked an interesting offer from the Waterloo billionaire.
Balsillie, who was in court, offered through his lawyer Jeffrey Kessler, to pay half the Coyotes losses from staying in Phoenix for the 2009-2010 season if the league would drop future appeals and allow him to move the team to Hamilton for the following season.
There was no response from the NHL.
* Baum wondered aloud whether there had ever been another case in which a judge had to order a sports league to accept a partner against its wishes.
Goldfein urged Baum to read the full depositions of Balsillie and others to help on his ruling of the character issue.
The NHL counsel argued it's "preposterous" to suggest, as Balsillie's team has, that the Leafs have a veto.
"This stuff is just made up," he told the court.
But Kessler argued that the NHL had only raised the character issue to disguise the real issue, that the Toronto Maple Leafs own an unlawful veto to prevent a Hamilton franchise.
Balsillie lawyer Susan Freeman at one point urged Baum to call on Balsillie to come to the front of the courtroom and speak about the character issue. Baum declined.
But Baum said that he believed the league's argument opposing a 2009 relocation to Hamilton had some "merit."
Kessler acknowledged that a 2009 move to Hamilton would be a burden for the league.
"But it would not be a gigantic burden," he argued.
"I guess I should ask for a definition of 'gigantic,'" Baum quipped.
Kessler even suggested the team could move mid-season, a proposal that the league found outrageous. But Kessler argued that a ruling to reject a 2009 relocation could kill the Balsillie bid.
"Don't let them kill this bid because of this issue," Kessler said, adding Balsillie would not be willing to spend another $40 million to cover Coyote losses that might result from the team remaining in Phoenix this season.
Hamilton Mayor Fred Eisenberger said the fact Balsillie's bid remains alive is good news for the city.
"My understanding is his bid is viable so it will be considered," Eisenberger said. "I think he is well-positioned. He has always said he wants to be on a level playing field to be a bidder in the auction so his wish has come true. That's good news for him and good news for Hamilton."
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