National Hockey League executives convened in Chicago on Wednesday, approving a bid led by Chicago sports magnate Jerry Reinsdorf to purchase the financially strapped Phoenix Coyotes who are currently in Chapter 11 bankruptcy.
During this special meeting, the Executive Committee also rejected Jim Balsillie’s bid to purchase the suburban Phoenix franchise. The NHL’s outright rejection of Balsillie’s offer is another blow to the Canadian billionaire’s attempt to purchase a National Hockey League franchise and relocate it to Canada.
Commissioner Gary Bettman released the following statement following the Board of Governors meeting:
"The National Hockey League’s Board of Governors met this afternoon to review the ownership applications of three prospective ownership groups for the Phoenix Coyotes. The Board's process today represents the League's best efforts to comply with the League's review procedures pursuant to NHL Constitution Article 3.5 and NHL By-Law 35 within the timetable imposed by the ongoing court process.
"There were three applicant groups that were interviewed by the Executive Committee and considered by the Board. One was Jim Balsillie’s. The second was a group headed by Anthony LeBlanc, involving Mr. LeBlanc, Keith McCullough, Todd Jordan and Daryl Jones. And the third group, headed by Jerry Reinsdorf, included as well Tony Tavares and John Kaites.
"After interviewing all of the applicants, the Executive Committee brought forward recommendations to the full Board of Governors.
"Mr. Reinsdorf’s application was unanimously approved by all those Board members present and voting, subject to the League’s completion of its due diligence and review of the final transaction. In Mr. Balsillie’s case, it was the unanimous vote of all members present and voting that his application not be approved. With respect to the LeBlanc group, it was determined that, at this stage, since they’ve only recently begun the process, the application was incomplete and could not yet be acted on by the Board. However, the Executive Committee reported favorably on the LeBlanc group’s interview and endorsed the group’s continued efforts to complete a bid to purchase the franchise.
"We will so advise the Bankruptcy Court and we will move this process forward."
Balsillie, through the Chapter 11 filing of the Coyotes, is making his third attempt at owning an NHL club. He has unsuccessfully made attempts at purchasing the Pittsburgh Penguins and Nashville Predators before the attempt in purchasing the Coyotes. In all three cases, Balsillie has made it clear that his intent was to relocate the club to Hamilton, Ontario, Canada after the purchase.
“The Board was obviously very uncomfortable with approving Jim Balsillie as an owner. As a result, they rejected his application [for the Coyotes] unanimously,” NHL deputy commissioner Bill Daly told ESPN.com in an email earlier in the day.
Thus, in order for him to gain control of the Coyotes, Balsillie would need to get some help from U.S. Bankruptcy Judge Redfield Baum, who is presiding over this contentious dispute.
Although the NHL approved Reinsdorf’s bid, at $148 million it is substantially less than Balsillie’s bid of $212.5 million. This offer was accepted by current Coyotes owner Jerry Moyes prior to the team’s May 5th bankruptcy filing. The agreement was made on the expressed condition that the franchise be relocated to Hamilton, once the sale was completed. The difference in purchase price is something that Judge Baum will most likely consider in rendering his ruling, as a higher bid means that more of the team’s creditors will be paid. At the same time, Baum will weigh what the financial implications are to the Toronto Maple Leafs and Buffalo Sabres, who will be impacted by the placement of a new club in the region. He will also consider which ownership group intends to relocate the Coyotes and which group intends to keep the team in Glendale.
Out of the three bids reviewed by the NHL Executive Committee, only Balsillie bid with the intent of moving the team. Although Reinsdorf’s offer was made with the intention of keeping the Coyotes in Arizona, the franchise has not once made money since moving to metropolitan Phoenix in 1996.
Maury Brown contributed to this article
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Jeff Levine is a staff member of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is a sports attorney, and the Executive Director of One Sports and Entertainment, International.
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