PHOENIX – The National Hockey League said it has been in control of the Phoenix Coyotes since November and is asking a federal judge to throw out the team’s bankruptcy filing.
NHL deputy commissioner Bill Daly said Coyotes owner Jerry Moyes signed documents giving control of the team to the league. Daly said the documents specifically prohibit Moyes from taking the franchise into bankruptcy.
“We are filing a motion basically asking the judge to confirm that the league is in control of the club,” Daly said, “and at that point we’ll be able to dismiss all the claims in bankruptcy.”
Daly spoke Thursday after a hearing in U.S. Bankruptcy Court on the franchise’s filing for Chapter 11 reorganization on Tuesday. The filing, which came as a surprise to the NHL, includes a plan to sell the team to Canadian businessman Jim Balsillie for US$212.5 million and move it to southern Ontario.
Judge Redfield Baum set a hearing for May 19 for arguments on who is in charge of the franchise and whether Moyes had the authority to file for bankruptcy.
The NHL wants to keep the team in Arizona and says it is in discussions with a prospective ownership group that includes Jerry Reinsdorf, owner of the Chicago White Sox and Chicago Bulls.
The league has funded operation of the franchise since last August or September, and Moyes has signed documents turning over control of the team to the NHL “more than once,” Daly said. He said the latest document was signed in November.
Court documents filed by Moyes said the team has lost $73 million over the past three years.
“I got into this thing kind of by accident,” Moyes said in brief remarks outside the downtown Phoenix courthouse. “I loaned (previous owner) Steve Ellman $5 million one night to keep the team in Phoenix. Now I’m into it over $300 million. I’m going to be lucky to get $100 million out of it.”
Moyes indicated he was open to another bid to buy the team.
“We have been in negotiations for six months to try to get various partnerships together, set the city involved, get concessions from the city,” he said. “And we were just never able to get closure to this. If somebody wants to put a group together, I’ll be glad to be part of it. … But we’ve got to get commitments from everybody and the city and that’s where it stands now.”
Moyes said he had never been contacted by the Reinsdorf group.
Daly said Balsillie’s attempt to purchase the struggling franchise is breaking many of the league’s rules and he may regret his plan of attack.
“He makes his own decisions and he’s making a decision that this is the way he wants to get into the National Hockey League. We don’t usually like to pick fights, but we end them,” Daly told The Canadian Press.
Daly also suggested that Balsillie will meet a united front at the league’s highest level.
“Well certainly to the extent he’s attacked virtually every rule that’s in existence in the National Hockey League, I don’t think the governors will look kindly to the posture he’s taken in this proceeding, that’s for sure.”
Daly said that if Baum rules in favour of Moyes, the NHL still believes it will ultimately prevail and keep the franchise in Arizona.
“It won’t be devastating to our position in this case, which is ultimately none of the relocation can happen and none of the sales procedure can happen without them coming through the league and league rules,” Daly said.
Moyes’ lawyers have filed a complaint contending that the NHL’s control over relocation of teams violates federal antitrust law.
League members “have conspired with and through the NHL to maintain monopoly power in their ‘home markets’ or ‘home territories’ by refusing to allow the relocation of NHL clubs to markets where existing clubs currently have franchises,” the document contends.
The move to Hamilton would invade areas already claimed by the Toronto Maple Leafs and Buffalo Sabres as their fan base.
Daly said NHL rules have been upheld by courts in the United States and Canada and he expects them to survive any challenges made in the Coyotes case.
The city of Glendale, where the Coyotes play in Jobing.com Arena, also believes it can prevent the team from leaving. The franchise signed a 30-year lease but Moyes and Balsillie believe that can be negated by a successful bankruptcy case. Glendale officials, though, argue the lease can’t be broken without the $750 million payment it requires.
Earlier Thursday in Hamilton, representatives of Balsillie and the city met to discuss an agreement over Copps Coliseum should the tycoon succeed in buying the Coyotes and moving them to the Steel City.
In an interview, Mayor Fred Eisenberger said the city is only interested in a long-term deal in exchange for giving Balsillie exclusive hockey access to the arena.
He also said the facility would need at least $100 million for private boxes and other upgrades.
“We would expect that if we provide the facility that he would provide the resources to make any changes that would be necessary to bring it up to full and complete NHL standards,” Eisenberger said.
The mayor said he hoped to have something to present for council within a week or two.
He also repeated his contention that the city is ready and able to host a sustainable NHL franchise.
“Hockey is very viable here.”
Speaking at event in Toronto, federal Finance Minister Jim Flaherty said he supports the idea of a third NHL team in Ontario.
“Can we support another team? I’m sure the market studies are there,” he said. “Jim Balsillie says we can, he’s a good businessman.
“I think it will be exciting for Canada to have another NHL team. But that’s up to them, it’s up to the NHL it’s up to the owners, it’s not up to governments.”
Balsillie issued a statement saying he respected the court process. He also thanked the nearly 100,000 people he said responded on a website seeking their support for the Coyotes move.
“At the end of the day, this is about the passion Canadians feel for the game of hockey and a chance to provide those Canadian fans with the opportunity to support a seventh NHL team,” Balsillie said. “Right now, the fans are signalling their enthusiasm in big numbers. That’s what this is all about, great hockey fans in a great hockey market.”
With files from The Canadian Press