Balsillie makes offer to buy Coyotes

August 25, 2009, 2:11 PM

THE CANADIAN PRESS

TORONTO — Showing savvy timing, BlackBerry boss Jim Balsillie made a bold move Tuesday to get his foot in the NHL door.

The co-CEO of BlackBerry maker Research In Motion made a US$212.5-million offer to buy the financially ailing Phoenix Coyotes, a deal conditional on moving the Coyotes to Southern Ontario.

"This is a very clear and serious offer," Balsillie told reporters at a hastily arranged availability Tuesday evening. "I’m excited and delighted to make this offer and try to bring a seventh team to Canada for hockey fans in an unserved part of Southern Ontario."

The billionaire would not say which city in the region he was targeting — Hamilton and the Kitchener-Waterloo area have been his hockey grounds of choice in the past. League rules on compensation to nearby teams are not clear — a request for clarification from the league was not immediately forthcoming in the wake of Balsillie’s actions.

But by making his offer public, he put pressure on the NHL. And with the Coyotes filing for bankruptcy protection Tuesday, Balsillie wasted little time depicting himself as a white knight with an open wallet.

Still the NHL board of governors has to approve any sale — or relocation. And the league responded quickly, trying to regain control by saying it would speak for the club in bankruptcy court,

Balsillie has turned up the heat by going public in his bid. He’s asking fans who want to see a seventh NHL franchise in Canada to make their voices heard, asking them to log on to www.makeitseven.ca to add their voices to his bid.

Balsillie said that the website has already had "thousands and thousands" of comments.

"I think it affirms there’s an unserved market, there’s a real opportunity here," Balsillie said. "I’m prepared to put this kind of funding . . . I believe this is a serious commitment."

Balsillie said he didn’t know when to expect a decision on his offer, but did expect the Coyote’s bankruptcy proceedings to be processed quickly.

The news conference occurred after Balsillie attended a dinner and ceremony for his induction into the Order of the Business Hall of Fame. The tuxedo-clad Balsillie reiterated the merits of his offer several times but dodged questions concerning the NHL’s response to his offer. The conference lasted just five minutes.

It was a day of rapid developments surrounding the hockey team in the desert, with the league appearing to step in for the current management.

The Coyotes filed for Chapter 11 bankruptcy protection. The filing included the proposed sale of the franchise to PSE Sports & Entertainment, LP, a Delaware limited partnership, which would move the franchise to Southern Ontario.

"Extensive efforts have been undertaken to sell the team, or attract additional investors, who would keep the team in Glendale," Jerry Moyes, the Coyotes chief executive officer, said in a statement announcing the Chapter 11 filing. "Creating a process under the supervision of a judge assures that anyone wishing to purchase the team will have the opportunity to bid.

"Likewise, the City of Glendale, which has been very co-operative with efforts to keep the team in Glendale, will be able to provide potential buyers assurances of the city’s willingness to offer incentives to keep the team as a tenant in the Jobing.com arena, the lease for which is subject to rejection in bankruptcy. The process assures that the identities of the new owner and the team’s location will be known by June 30, 2009, thus enabling the NHL to include the team in its 2009-10 schedule."

At the request of the Coyotes owner, Balsillie said he has also agreed to provide US$17 million in bridge financing to allow the franchise to keep going in advance of the sale.

Balsillie’s offer does not guarantee that the Coyotes will move.

"If others want to come in and there’s an offer that is deemed better by the courts, then ultimately that would be a court decision," said Steve Roman, a spokesman for Moyes. "As I understand it, the hope and the plan is that all of this would be dealt with by June 30, 2009. You have a person who has a purchase agreement, but at the same time there could be other players who want to get involved."

The NHL said it was reviewing the events surrounding the Coyotes,

"We have just become aware of today’s Bankruptcy Court filing purportedly made on behalf of the Phoenix Coyotes," deputy commissioner Bill Daly said in a statement. "We are investigating the circumstances surrounding the petition, including the propriety of its filing. We have removed Jerry Moyes from all positions of authority to act for or on behalf of the club.

"The league will appear and proceed before the Bankruptcy Court in the best interests of all of the club’s constituencies, including its fans in Arizona and the league’s 29 other member clubs."

The city of Glendale said in a statement that it is disappointed the team has filed for bankruptcy and hopes a way can be found to keep the team in Arizona.

"The decision by the ownership of the Phoenix Coyotes to initiate bankruptcy proceedings without consultation or approval of the National Hockey League is an unfortunate turn of events for the NHL, the State of Arizona and the Coyotes’ loyal fans," the statement read. "Even as the propriety of this unprecedented action is being thoroughly investigated by the NHL, city officials are working diligently to ensure that the public’s interest is fully protected throughout this process.

"The City appreciates the decision by the NHL to assume control of the Coyotes and we are confident that every effort will be made to honour all contractual commitments. It is our hope that the NHL action will provide immediate stability to the franchise and allow the Coyotes to remain an important part of the Arizona community."

In March, NHL commissioner Gary Bettman said the financially struggling Coyotes were actively seeking investors or possibly new ownership, but reiterated that the team won’t be moved.

"Our goal is to bring in new capital and make this franchise solvent," Bettman said on March 26 while attending a Coyotes home game. "That’s our direction, and at this point moving the franchise elsewhere is not on the table."

Balsillie made a well-publicized attempt to purchase and move the Nashville Predators to Hamilton in the spring of 2007. The deal fell through, with speculation that some in the NHL did not like Balsillie’s insistence that the team be moved to Canada.

But he reportedly has kept angling for a team of his own. The 48-year-old Balsillie is a huge hockey buff who still plays weekly — he’s a right-winger.

"I think this is an enormously exciting opportunity. I’m clearly just a passionate hockey fan," Balsillie said. "I don’t have to tell anybody here it’s the greatest game in the whole wide world."

There was confusion last week about the Coyotes with a spokesman for the city of Glendale, where their arena is located, saying the league was in charge of the team.

Coyotes president Doug Moss rejected that report. The league declined comment.

Citing Glendale records, the Arizona Republic reported that the Coyotes stopped paying the city of Glendale rent, parking fees and most of its security costs at Jobing.com Arena in August. The paper also said the city was paid nearly US$351,000 for past rent on Feb. 25, the day after the NHL agreed to loan the team an unspecified amount.

As part of the loan agreement, the league had the right to take over the franchise if the loan was not paid, the paper said.

The NHL has had little to say about selling or moving teams although the issue resurfaced recently with news that deputy commissioner Bill Daly met with a group interested in putting a second team in the Toronto area.

"There is no consideration of bringing a second franchise to Toronto. We have no intention to expand in the foreseeable future, and there is no desire to relocate any of our existing franchises," the league said in a statement when asked about that meeting.

Should the Coyotes end up in Canada, it will be a homecoming of sorts. The franchise was the Winnipeg Jets from 1979 to 1996.

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