Court is back in session in Phoenix, where Judge Redfield T. Baum has started presiding over an auction to determine whether Canadian billionaire Jim Balsillie or the NHL will own the bankrupt Phoenix Coyotes.
NHL commissioner Gary Bettman and deputy commissioner Bill Daly arrived to the courtroom early on Thursday and took seats two rows from the front. Balsillie showed up 10 minutes before the hearing began and sat across the aisle from his NHL counterparts.
The league and Balsillie's company PSE each confirmed their bids at the beginning of session. As expected, no other parties stepped forward with an offer.
Balsillie has spent the past four months trying to buy the Coyotes in Chapter 11 bankruptcy proceedings and relocate them to Hamilton.
Only the NHL stands in his way after a third bidder, Ice Edge Holdings LLC, pulled out Wednesday.
The auction will likely be held over two days, with experts from both sides subject to cross-examination and redirect questioning on Thursday.
Former Canadian Football League commissioner Tom Wright, who prepared Balsillie's application for relocation, argued during questioning Thursday that the suburban City of Glendale, where the Coyotes play, can not support an NHL club regardless of how good the team is.
A great deal of time is expected to be spent on the contentious issue of relocation, notably a fee to be paid to the league for moving the franchise.
Two studies commissioned by the NHL proposed a fee ranging between $101 million and $195 million, whereas Balsillie's expert put it between $11.2 million and $12.9 million.
"The NHL's position has been [and remains] that it is premature to consider relocation issues, including a potential relocation fee," the league reiterated in a document filed Wednesday.
Balsillie, Bettman to take stand
Balsillie and Bettman will take the stand Friday to be questioned under oath.
Judge Baum presumably will rule after that, but speculation persists he will put off a final decision until next week.
Balsillie, the co-CEO of Research in Motion Ltd., the Waterloo, Ont.-based maker of the BlackBerry smartphone, has offered $242.5 million US for the bankrupt franchise, contingent on relocating it to Hamilton.
The NHL has countered with a bid of $140 million amid claims that Balsillie is ineligible to participate in the bidding process because the league's board of governors rejected his application for ownership by a vote of 26-0 with three abstentions (Buffalo Sabres, Pittsburgh Penguins and Toronto Maple Leafs).
Balsillie previously tried — and failed — to purchase the Penguins in 2006 and Nashville Predators in 2007 so he could move them to Hamilton.
Both deals turned sour and fostered bad blood between him and the NHL.
The NHL argues Balsillie is untrustworthy and the court shouldn't have the right to choose who owns a team and where it plays, something the league considers an alarming legal precedent for pro sports.
Baum, who has overseen the case from the start and sifted through more than 1,000 documents, will rule whether or not Balsillie can take part in the auction.
If Balsillie can — and wins — the NHL has vowed appeal and request a stay of sale.
If Balsillie cannot, he reportedly will file an antitrust lawsuit against the league.
Balsillie sweetened pot
Balsillie increased his original bid of $212.5 million to $242.5 million on Monday, earmarking $50 million to the City of Glendale — the Phoenix suburb where the Coyotes play — to release the team from its 30-year lease at Jobing.com Arena.
Balsillie's offer is contingent on municipal officials accepting the offer by Sept. 30, and the team moving to Hamilton as soon as possible.
"The city has been very adamant about keeping the Coyotes in Glendale," said city spokeswoman Julie Frisoni. "That position has not changed."
At the urging of Baum, Balsillie also agreed to extend his personal deadline to finalize the sale from Sept. 14 to Sept. 21.
The league entered into the bidding about two weeks ago when Jerry Reinsdorf, owner of the Chicago Bulls and White Sox, withdrew his $148-million bid, citing an inability to reach an agreement with the City of Glendale.
Reinsdorf was demanding $23 million in annual subsidies from the city, but local politicians refused to pay a penny more than promised in the existing lease.
If the NHL succeeds in buying the Coyotes, it still could sell them to an owner willing to keep the team in Phoenix, an owner intending to move it elsewhere, or perhaps Reinsdorf or Ice Edge.
Ice Edge, a group of North American businessman fronted by Daryl Jones and Anthony LeBlanc, had submitted a bid of $150 million US for the Coyotes, pending a lease agreement with the City of Glendale — the Phoenix suburb where the team plays — and on the proviso they play five games in Saskatoon.
"We will be examining our options after the conclusion of the bankruptcy auction process," LeBlanc said.
The Coyotes open training camp on Saturday, with the first pre-season game scheduled next Tuesday.With files from The Canadian Press