A bankruptcy judge has rejected Jim Balsillie's bid to relocate the Phoenix Coyotes to Hamilton, but the Canadian billionaire is not giving up.
Arizona bankruptcy judge Redfield Baum said the possibility of the team's relocation presented significant issues for the court.
"There are no reported bankruptcy court decisions ordering a relocation of the magnitude proposed here," he said.
Baum also said the issue of a relocation fee -- in which Balsillie would have to pay millions of dollars to the NHL for the right to move the Coyotes to Ontario -- had not been resolved.
Finally, he said the court "is unconvinced that it should order that the NHL must decide the relocation application to meet the June 29th deadline." Balsillie had set that deadline for his $212.5-million offer to expire.
A spokesperson for Balsillie, Bill Walker, said his client was still seeking to bring a seventh NHL team to Canada.
"The court did not approve either our approach or the NHL's," Walker said in statement late Monday. "Judge Baum did state he does not have time to decide all the relocation issues. But the court still controls the sale process. As a result, we look forward to hearing from the NHL soon on its view of our relocation application and an appropriate relocation fee, so as to allow the court to determine if that fee is reasonable."
We still think there is enough time for the NHL to approve Mr. Balsillie's application and move the team to Hamilton by September," he added. "The court invited mediation on these issues and Mr. Balsillie is willing to participate in such mediation if the NHL is also willing to do so."
Baum had earlier said he wanted to ensure the team's creditors would not be left in the lurch if the team was moved. The NHL argued the franchise is still viable in Phoenix, but the team has reportedly lost more than $300 million since it moved there from Winnipeg in 1996.
NHL deputy commissioner Bill Daly said the league was "pleased" with Baum's decision.
"We will turn our attention now toward helping to facilitate an orderly sales process that will produce a local buyer who is committed to making the Coyotes' franchise viable and successful in the Phoenix/Glendale area," he said in a statement. "We are confident that we will be able to find such a buyer for the Coyotes and that the claims of legitimate creditors will be addressed."
One of the key issues in the dispute was whether majority owner Jerry Moyes had the authority to file for bankruptcy and negotiate the team's sale, or if the NHL had control of the Coyotes.
On May 5, Moyes announced he had put the team into Chapter 11 protection. That same day, Balsillie made an offer to purchase the team -- but only if he could relocate it to Ontario.
NHL commissioner Gary Bettman alleged in court filings that he had control of the team -- not Moyes -- and any talk of selling or moving the franchise should have been directed to him.
Balsillie, the 48-year-old co-CEO of Waterloo, Ont.-based Research In Motion -- which makes the BlackBerry wireless device -- has made two previous attempts to move a franchise to Canada.
He tried to purchase and move the Nashville Predators to Hamilton in 2007, but the league rebuffed him. He has also previously expressed interest in the Pittsburgh Penguins.
Despite Monday's ruling, Balsillie's dream of bringing an NHL franchise to Southern Ontario may not be dead yet, said sports writer Howard Bloom, publisher of SportsBusinessNews.com.
While Bloom said there is "little if any appeal process when it comes to bankruptcy," he predicted that the Coyotes will play one more season in Phoenix before they are put on the auction block by the NHL.
"Hockey is never going to work in Phoenix," Bloom told CTV News Channel on Monday night, noting that the team has lost some US$300 million over the past nine seasons in Arizona.
Bloom said that once the team is put up for auction, Balsillie could then bid on the franchise and move it north -- but with the NHL controlling the process.
"I think if Jim Balsillie's smart, he'll play by the rules," Bloom said, noting that the auction price could swell to $400 million.
"He's a hard guy to keep down."
