Balsillie loses this round

If you haven’t heard yet, Judge Redfield T. Baum has ruled against the Balsillie bid to purchase the Phoenix Coyotes and move them to Hamilton. This means that the Coyotes will remain in Phoenix for at least one more season.

In the 21-page document he said the court didn’t believe there was enough time to resolve all the various issues before the sale of the insolvent team to Balsillie for US$212.5 million that was due to close June 29.

I haven’t yet read the document but when I do I’ll have further comment but I think it would be premature to just assume that Balsillie’s bid to move the Coyotes to Hamilton is now dead in the water. From what I have read the judge has just ruled that Balsillie hasn’t proven his case that the NHL has violated anti-trust laws so he wasn’t going to order the relocation of the team and that the other issues related to the sale of the team cannot be resolved in the time frame required (by the June 29th deadline in the Balsillie bid). The largest outstanding issue was the relocation fee which the Balsillie bid did not address.

The judge did rule that that the NHL will have to address Balsillie’s bid to relocate the team to Hamilton which was submitted to the league a couple weeks ago. Presumable the NHL will reject that bid but the NHL may have to be careful in how that bid is rejected to not clearly violate anti-trust laws. Also, the situation surrounding the Coyotes is still not anywhere close to being finalized. Presumably the next step will be according to the NHLs proposed schedule which will be to hold an auction to sell the team in September with bids only from prospective owners intent on keeping the team in Phoenix. If there are no bids at that time then there will be a second auction where prospective owners looking to relocate the team will bid on the team. At this point Balsillie could once again put in a bid on the team.

We now await comment from the Balsillie camp as to what their plan is from here on. Will they pull their application to the NHL for relocation? Will they stick with it and see what the NHL decides? Will he wait it out and hope to put in a bid when it goes up for auction? Will he attempt to purchase another team that might be for sale?

Update: After reading the full decision this is certainly not a clear win for the NHL or a clear loss for Jim Balsillie. In fact it may be more of a win for Balsillie than the NHL. If I understand the decision correctly (and feel free to correct me if I am wrong) on the issue of relocation, the Judge decided that he was not in position to impose relocation on the league because he could not determine that there was a real dispute in that matter. The judge ruled that the NHL does have the right to approve or deny relocation and does have a right to charge a relocation fee but since the NHL has yet to respond to Balsillie’s request to relocate the Phoenix Coyotes nor have they set a relocation fee to move the team to Hamilton, Balsillie is not in position to claim anti-trust violation or any other reason for dispute and thus the Judge was in no position to rule on the dispute.

The judge also ruled that since this is a busy time of the year, with the NHL Stanley Cup playoffs just ending, the NHL did not have time to act on Balsillie’s request to transfer the Coyotes to Phoenix and ruled that the NHL would not have the time to do so before the June 29th deadline. Although the judge did order the NHL to address the Balsillie request to relocation the Coyotes he did not set a time frame to do so. That said, if the NHL does not act on the request in a timely fashion (i.e. deliberately delaying the issue) or if they unfairly dismiss or vote against the Balsillie transfer request or set an unfairly high transfer fee then Balsillie could go back to the court with a valid dispute and the judge would be forced to make a ruling.

Although Bill Walker, spokesman for Jim Balsillie said there is still time to resolve the issue and have the Coyotes begin next season in Hamilton, that seems unlikely at this point. That is unlikely to end the Balsillie bid but how it affects his offer is unknown. He previously has volunteered to keep the team in Phoenix for another season if the NHL picked up the losses but that is a non-starter for the NHL and may give the NHL a valid reason to reject the Balsillie bid which is a risk I would not want to take if I were Balsillie. Would Balsillie be willing to absorb the losses of another year in Phoenix? That is not yet known, but he may need to if he wants the team because time is not on his side.

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  1. Seems to me this is sort of a non-decision decision that favors the NHL..if only because it puts it back in their court. If the NHL follows their own rules, lists a relocation fee, and allows Balsillie to make his bid, then they can vote on it by the owners, and reject the move via their own by-laws. In the meantime, they can then open up the auction to sell the franchise without moving it. While I wouldn’t say Balsillie is dead in the water, I think this hurt him. Regardless, I seriously doubt the Coyotes are going anywhere this season, though unless they resolve ownership / location before the start of the season…ticket sales will be hampered badly. Who wants to go see a poor performing team that is leaving anyways?

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