What happened to the Phoenix Coyote’s yesterday is what many people suspected may happen to them for a while. They went bankrupt. They went bankrupt despite the fact that over the past year Gary Bettman has continued to tell anyone who would listen that the NHL as a whole and its member teams are generally doing just fine, despite the economic down turn. Most people were smart enough to not listen to Gary Bettman.
What is interesting this time is that Jim Balsillie sat on the sidelines waiting for the moment for the Phoenix Coyote’s to declare bankruptcy. He has learned from past mistakes when he tried to purchase the Penguins and the Predators only to be foiled by Gary Bettman insisting that he cannot move those franchises. With the Coyote’s in bankruptcy court, the decision may not be completely in the NHL’s hands anymore as a judge will pretty much decide what happens to the Coyote’s and if the judge decides that the best way for the Coyote’s to repay its creditors is to sell the team to Balsillie and move it to Southern Ontario, the NHL may not have much say in the matter.
It should also be noted that the Coyote’s apparently filed for bankruptcy without notifying the league as noted in a statement released from the City of Glendale.
“The decision by the ownership of the Phoenix Coyotes to initiate bankruptcy proceedings without consultation or approval of the National Hockey League is an unfortunate turn of events for the NHL, the State of Arizona and the Coyotes’ loyal fans. Even as the propriety of this unprecedented action is being thoroughly investigated by the NHL, city officials are working diligently to ensure that the public’s interest is fully protected throughout this process.
Upon hearing of the news, the NHL immediately stepped in and took over control of the Coyotes removing owner Jerry Moyes ability to operate the club. The NHL is now operating the Phoenix Coyotes and the NHL’s Bill Daly issued a statement of on behalf of the NHL:
“We have just become aware of today’s Bankruptcy Court filing purportedly made on behalf of the Phoenix Coyotes. We are investigating the circumstances surrounding the petition, including the propriety of its filing. We have removed Jerry Moyes from all positions of authority to act for or on behalf of the Club. The League will appear and proceed before the Bankruptcy Court in the best interests of all of the Club’s constituencies, including its fans in Arizona and the League’s 29 other Member Clubs.”
It’ll be interesting to watch the league make its arguments in bankruptcy court because in theory bankruptcy court is about getting the best deal for the creditors of the Phoenix Coyotes, and not what is in the best interest of the club, the fans, or the leagues 29 other member clubs. The bankruptcy court judge is unlikely to listen to any arguments related to the best interest of the 29 other teams (other than in reference to any money the Coyotes may owe the league from money they were advanced) and certainly not in respect to the fans, except in consideration to any money they may have put down for 20010-11 season tickets (all dozen of them?).
This really was a devious plan that Balsillie and Moyes worked up. Moyes, unable to find anyone to pony up money to take the Coyotes off his hands and keep the Coyotes in Phoenix, knew that the best and easiest chance to sell the team for maximum return was to sell the team to Jim Balsillie. But Balsillie also knew from his Penguin and Predators experience that Bettman could force the sale of the team to another entity, even if the sale price was lower, as he did with both the Penguins and Predators. By taking the league to bankruptcy and then having Balsillie put in the offer they really are taking Gary Bettman out of the equation. I just can’t imagine the angst and anger that Bettman, Daly and the rest of the crew at NHL headquarters is feeling right now. The fate of the Phoenix Coyotes is no longer in the hands of Betman et al but rather in the hands of a bankruptcy court judge. It is quite likely that the only way they can block the sale of the team to Balsillie and have it moved to Southern Ontario is to find a better offer but one has to wonder how likely that is. Plus we know that the NHL Players Association is all for another team in Southern Ontario so they will likely side on behalf of Balsillie as well as might some of the richer clubs that have to pay into revenue sharing. This might be the first stage of Bettman losing complete control over the league.
If I were Bettman I would really do my hardest to embrace Balsillie because he isn’t going away. If somehow Bettman can resolve this Coyote situation, possibly with an owner interested in moving the team to Kansas City or Las Vegas or somewhere else, there are a number of other teams that Balsillie will target. The Florida Panthers, Tampa Bay Lightning, and Atlanta Thrashers are anything but strong organizations and the Nashville Predators have still not proven to be financially stable over the long haul.