Q&A: Coyotes' future in hands of Baum
After two days and about 16 hours of court testimony, it seems as if we're not any closer to a decision from Judge Redfield T. Baum as to who will own the Coyotes after the team's bankruptcy hearing in Phoenix concludes: Canadian billionaire Jim Balsillie or the NHL.
On Friday, both bids were sweetened, the creditors picked sides and NHL commissioner Gary Bettman took the stand in what was a relatively painless 50 minutes of testimony.
In fact, the most important bit of news to come out of the courtroom may have been Wayne Gretzky's status as coach of the beleaguered franchise.
For all legal, non Gretzky-related issues, CBCSports.ca contacted experts Richard Powers, associate dean at the Rotman School of Management in Toronto, and Richard McLaren, a University of Western Ontario professor specializing in bankruptcy and sports law, to make sense of what all this means moving forward.
CBCSports.ca: Two days and almost 16 hours of hearings later, we still don't know who will get this team. What was accomplished during Thursday and Friday's proceedings?
McLaren: "Well, I think it's like the snail and the tortoise. We're inching towards some kind of conclusion that neither are really racing for, and nobody is really certain what the conclusion is when they get there."
Powers: "I think both parties have declared their positions a bit better.
"What doesn't surprise me is that the judge is retreating back to his mandate. He has to maximize value for creditors. And in the submissions we've seen today and the changes that have been made, they have both recognized that and have upped the ante for the creditors."
How do you think Bettman's cross-examination went?
Powers: "If I was one of the governors, I thought he did very well. He stayed to his game plan. He was very good. He gave Balsillie's team very little to work with.
"Both sides stuck to their points, stuck to their game plan, and both did an excellent job. What that does though is just makes it more difficult for the judge to decide between the two bids."
McLaren: "Not surprisingly, Balsillie's team went to attack the veracity of what was said by Mr. Bettman, and attacked his integrity — that was completely unsuccessful. They're trying to paint him as being manipulative or worse, and they weren't successful at that.
"I think that comes out at the end of the day to be a complete standstill. It didn't change things one way or the other."
Both sides polished their bids on Friday. How will that affect proceedings moving forward?
Powers: "I don't think this is the end. I think the bids will still change, but I also think that Baum is going to put conditions on whichever bid he ultimately accepts.
"When you take a look at it, it will be very difficult for [Baum] to not choose Balsillie's bid. It's higher, it gives more to all the creditors, and let's be blunt, Balsillie's thrown down the gauntlet to the City of Glendale to decide to get [$50 million US], or risk getting absolutely nothing."
McLaren: "The NHL changes, in allowing some repayment to the owner, is as much about all the other owners who are on the verge of the financial abyss as it is about [Moyes].
"That change was made more on the basis of trying to accommodate some of the views of some of the other owners and people involved in the league than it was changing the process that's going on in front of Baum."
Why is Baum taking so much time to render a decision?
Powers: "Because it's so important. This has major repercussions on all professional sports teams. It's the 'who' and 'where,' as we've talked about before. All the other teams are determined [by the leagues], and they've never been challenged on that."
McLaren: "I think he's still in pursuit of the original strategy that he has had from the outset, which is "Let's get the parties to settle this and negotiate the resolution and I'm not going to exercise my legal authority." But I am also beginning to wonder if he finds it difficult to make a decision, and therefore tries to avoid doing so.
"I empathize with the man, because I think right now what's going on for him is he's just being deluged from all sides and it's very hard to sort out the information, let alone evaluate it and then make a decision about it."
With all this in mind, what ruling do you think Baum will make?
Powers: "It's anybody's guess. However, he is a bankruptcy court judge. Balsillie's bid satisfies the creditors to a greater extent than the NHL's bid. So it's going to be very difficult for him to come up with enough reasons to say no to Balsillie.
"I think Balsillie, initially, will be successful. The issue after that is what conditions Baum puts on that bid. He may say from a creditors' point of view, Balsillie's bid wins. Part B is if he agrees to leave the team in Phoenix for a year or two years."
McLaren: "No ruling. I think we'll see this protracted and protracted and I don't think they'll be any ruling. The issues don't get decided and nothing actually comes to a definitive close. That process doesn't seem to me to be ending now, so it's going to go on for quite some time.
"And whenever it comes to whatever its conclusion may be there's going to be other litigation that goes on. So we're not talking about a very successful or final conclusion here."
When do you think he'll come to a decision?
McLaren: "It may not ever be decided. If it is, it could be many months from now, in the hopes that in the meantime they'll work something out that so that nothing has to be decided by the judge. That seems to be where it's headed."
Powers: "We'll have it in the next two weeks."