Jim Balsillie, the Blackberry billionaire who came close to purchasing the Nashville Predators and moving them to Southern Ontario, is now going after the Phoenix Coyotes, according to a number of reports that are breaking this evening.
For Phoenix Coyotes fans, this is unquestionably bad news, as Balsillie's actions have proven that owning a team in or near Hamilton is his ultimate goal. In the early stages of the Nashville situation, he (through his legal representative, Richard Rodier) offered encouraging words, and a glimmer of hope that an insanely rich, hockey-loving owner would build upon the existing lineup to try and make a run for the Stanley Cup. Instead, what we got was a Major League scenario in which Balsillie tried to prepare the ground in Hamilton while poisoning the well in Nashville, before he even owned the team. With the Coyotes, however, his intention is markedly clear right from the start; this transaction is entirely about relocating the team to Southern Ontario.
The situation in Phoenix is an interesting case; while the market is undeniably attractive to the NHL (it's the #12 TV market in the US), and is home to over 4 million people, there are issues with the arena location and commercial environment (i.e. the lease) which make the team, as a business, untenable. In fact, the Coyotes filed for Chapter 11 bankruptcy today, which smooths the path towards franchise relocation. The single biggest obstacle to moving North American sports franchises is usually the arena lease, but in this case the bankruptcy provides an opportunity to void that agreement, and give the team a fresh start in another city.
According to the various reports, the bid from Balsillie was solicited by the Coyotes, and includes debtor-in-possession financing, which basically means that Balsillie would provide the funds that allow the team to keep the doors open while the bankruptcy process completes.
The offer is for $212.5 million, and includes enough to pay off all of the team's existing debt:
- $35 million owed to the NHL,
$80 million to SOF Investments, and
- $97.5 million to unsecured creditors.
That means the Coyotes ownership would basically walk away with nothing. One of the strengths of Balsillie's offer is that it doesn't rely on financing, and requires that "Overbids must exceed the PSE proposal [Balsillie's] by $5 million and must be fully funded at closing without a financing contingency." In other words, if you want to top Balsillie's bid, bring at least $217.5 million, and have it in cold, hard cash (there goes my Del Biaggio-like fraud scheme). Is anybody out there (like the KHL's Alexander Medvedev) ready to lay out that kind of dough to take the Coyotes to another city like Kansas City or Las Vegas? After all, the bankruptcy puts this team in play for any location in North America, not just Hamilton. I guess we'll see if a bidding war erupts over the coming weeks.
I wholeheartedly believe that another NHL team in Southern Ontario can be a resounding success, but I feel for the fans in Phoenix who are threatened by these developments. Balsillie's brash, headstrong tactics (which now include a flag-waving campaign called Make It Seven) will surely cater to the hockey-loving folks in Hamilton, but they also stomp on the hearts of the Phoenix fans, who have yet to see the Coyotes fulfill the promise that so many experts have proclaimed over the years for this young, talented lineup.