Judge Rejects Both Bids for Coyotes

Equating it to “passing the puck to the NHL,” Judge Redfield T. Baum has rejected both the NHL’s and Jim Ballsilie’s bids for the Phoenix Coyotes. The Globe and Mail reports that the onus is now on the NHL to find a new suitable bidder.

NHL.com has the story, which means Dave Tippett is no longer “reportedly” the coach of the Coyotes. He merely is. (It’s sort of zen-like, when you think about it.)

Anyway, this also means former coach and hockey uber-star Wayne Gretzky is gone, and Gretzky took the NHL’s story as an opportunity to deliver his parting words:

“This was a difficult decision that I’ve thought long and hard about,” Gretzky wrote in a post on his official Web site. "We all hoped there would be a resolution earlier this month to the Coyotes ownership situation, but the decision is taking longer than expected. Since both remaining bidders have made it clear that I don’t fit into their future plans, I approached General Manger Don Maloney and suggested he begin looking for someone to replace me as coach.

“I’ve loved the four years I spent coaching the Coyotes. Not a day went by when I took it for granted, and I will miss the competition of the NHL dearly. It was an honor to hold the position, and I will always consider myself especially fortunate to have had this opportunity.”

The Phoenix Coyotes released a statement that somehow manages to put Gretzky’s time with the organization in a positive light:

The Phoenix Coyotes would like to sincerely thank Wayne Gretzky for his dedicated service to the Coyotes organization since joining the club in 2000. During that time, he gave the team a true identity and credibility. His passion for the sport of hockey, and specifically, hockey in Phoenix, was an inspiration to those he worked with on a daily basis. Wayne’s unmatched professionalism will also be missed.
…
[T]he examples he set and the legacy he leaves will undoubtedly have a lasting impact on everyone associated with the franchise.

Those were indeed some great examples he set. I can’t imagine anybody who wouldn’t want to follow in the footsteps of a guy who makes $8 million a year yet wasn’t required to be at all successful.

At 3PM MST, the Coyotes will announce Dave Tippett as Wayne Gretzky’s replacement behind the Phoenix bench, reports TSN’s Bob McKenzie via Twitter.

OdinMercer at SB Nation’s Coyotes blog Five for Howling sends along his thoughs on Gretzky stepping down:

This is a good thing for the team. It removes a lot of question marks on the coaching front. In a time where everything is up in the air hopefully this at least solidifies one aspect of the Coyotes future. Ulf Samuelson has done a good job in camp of coaching the team hands-on and bringing in Dave King as an assistant is a great move to put some experience in that has been severely lacking so far.

Gretzky’s tenure as head coach hadn’t been met with a lot of success here in Phoenix and there was never a consequence for that. His salary was a weight around the team and the continued scrutiny wasn’t helping. The multitude of articles about his being away from the team haven’t been a help and I think this is really best for all parties that everyone now has one less negative story to focus on regarding the Coyotes.

Puck Daddy’s Greg Wyshynski sees Gretzky’s departure more as a new beginning, not so much as the end of an era:

It’s often said that great players make lousy head coaches in sports, and Gretzky’s Exhibit A. This was a frustrating coda for a stellar career, like Jordan in a Wizards’ jersey. Today marks the day in which the Coyotes have a new chance to compete under new leadership, and the day The Great One starts bringing the focus back to his unparalleled successes in a hockey sweater on the ice rather than his failures in a suit behind the bench.

But can anyone honestly blame Gretzky for staying on as coach for so long? When you’re still getting paid $8 million a year to coach one of the worst teams in hockey after three years of nothing but failure, it’s only natural that you’re tempted to test your luck by staying. Or even to just start not showing up at all.

From Wayne Gretzky’s official website:

Wayne Gretzky announced today that he is stepping down as Head Coach and Director of Hockey Operations of the Phoenix Coyotes Hockey Club, effective immediately. “This was a difficult decision that I’ve thought long and hard about,” said Gretzky. “We all hoped there would be a resolution earlier this month to the Coyotes ownership situation, but the decision is taking longer than expected. Since both remaining bidders have made it clear that I don’t fit into their future plans, I approached General Manger Don Maloney and suggested he begin looking for someone to replace me as coach. Don has worked hard and explored many options. I think he has made an excellent choice, and so now it’s time for me to step aside.

“The Coyotes scouting staff has put together a great group of young and talented players who are going to improve tremendously over the next few years,” continued Gretzky. “I’m proud of the team we’ve assembled, the organization with which I’ve been associated and the thousands of dedicated fans who have never wavered in their support of this young team. I’m confident that the best is yet to come for hockey in Phoenix.

“I want to thank every staff member of the Phoenix Coyotes, past and present. It was a real pleasure to work with each and every one of you. I’ve always said that Phoenix is a great sports city and deserves nothing but the best. I still believe that. As a young boy, I learned to play hockey in Southern Ontario, and I know what great fans they have there. It’s my hope they too will have an NHL franchise in the not too distant future.

“I often said it was the greatest honor and privilege I could imagine to be able to play in the National Hockey League. I feel the same way about being an NHL coach. I’ve loved the four years I spent coaching the Coyotes. Not a day went by when I took it for granted, and I will miss the competition of the NHL dearly. It was an honor to hold the position, and I will always consider myself especially fortunate to have had this opportunity.”

Breaking news via a series of tweets from Brahm Resnik, a news anchor and reporter in Arizona:

BREAKING Coyotes: GRETZKY RESIGNS AS HEAD COACH, SOURCES SAY. […] Team is expected to take time before formally announcing replacement. […] Sources say Gretzky cites uncertainty about future. Neither bid before court includes him in its plans.

Apparently, a press release from the team is coming soon.

Jim Ballsilie has indicated that his proposed move of the Coyotes to Hamilton, Ontario would not take place until after the 2009-2010 season, reports CBS Sports.

Ballsilie had never clearly said he would move the Coyotes to Canada this season, but clarifying that he’s not crazy enough to move a team less than two weeks before the season begins is reassuring.

Judge Redfield T. Baum has scheduled a hearing for 9:30 MST tomorrow, the AP reports:

The mediation hearing is a good thing for Jim Ballsilie’s bid, which had been pushing for external mediation for some time.

PSE, the company formed by Balsillie to pursue the Coyotes, “has offered several times to mediate with the NHL,” the document said, “but the NHL has never been willing to mediate or even negotiate with the NHL.”

The red tape continues to get thicker and thicker.

Jim Ballsilie’s hopes of absconding to Ontario with the Phoenix Coyotes were dealt a slight blow Wednesday, as the Glendale City Council expressed its support for the NHL’s bid for the team.

Coyotes owner Jerry Moyes was not nearly as supportive of keeping the team in Glendale:

“The city of Glendale would be better off without hockey. This team is going to be gone in a year,” [Moyes] said.

Moyes was only allowed to say a few words at the council’s meeting before he was asked to leave.

Dan Bickley of the Arizona Republic has an interesting take on the Wayne Gretzky situation in Phoenix. Bickley feels “The Great One” should be in camp with his team and he makes a strong case as to why.

“I think all of the distractions and things we are going through can be a rallying point for this team,” Maloney said. “This time a year ago, there were a lot of people who were optimistic, projecting us to be a playoff team
. I didn’t feel it. This year, I feel it. I think were legit. I have really good vibes from this group.”

And that’s exactly why Gretzky should be here.

Forget that his absence makes him look selfish, too big for the fray. Forget that it magnifies an unstable situation, further embarrassing an organization that has paid him a ridiculous sum of money over the years. Had Gretzky shown up, he would’ve told his team by example that they were all in this nightmare together. That would’ve gone a long way inside the dressing room.

Instead, he is protecting his interests, his name and his dignity. At least that’s how it appears. And in Arizona, it doesn’t help his tarnished image one bit.

When the auction for the Phoenix Coyotes ended Friday without resolution, the hope was that Judge Baum would come to a decision sooner than later. Jim Balsillie's lawyers had originally put a September 21 deadline on any decision, but that request was lifted at the behest of the court.

Right now it appears that the earliest we might have a court ruling on the case would be sometime in the middle of next week. Even then, there is no guarantee that either bid would be accepted; Judge Baum has hinted several times that the bids from the NHL and Balsillie might be thrown out if he's not satisfied with either side.

Amid the uncertainty surrounding the Phoenix Coyotes' ownership and financial situation, head coach Wayne Gretzky opted to stay away from Jobing.com Arena today as players reported for the first day of training. Gretzky, who's current annual salary is $8 million and twice that of any other NHL coach, is unsure of his status as head coach after learning that if the NHL purchases the team his contract won't be included in the sale.

"He is the head coach of this team right now," said Coyotes GM Don Maloney. "Given the timing of the court date, the lack of decisions on an ownership position and his contractual rights, Wayne just thought it was better to sit back for a few days and just evaluate the situation and talk to people. ...

"You can understand his position. (If) he comes back in and three days later there's a change in ownership and his contract isn't valid, do they lead him out in handcuffs? How does that work?"

I can't even imagine what the players must be going through during all this. No coach, no owner and nothing but questions surrounding your organization. But it's the fans (yes, there are Coyotes fans) that are paying for this the most.

Associate coach Ulf Samuelsson will be running things while The Great One is absent.

Despite both camps altering their offers, there's no end in sight for the beleaguered Coyotes Franchise.

On the second day of the Coyotes auction, the Balsillie camp amended its offer to guarantee that the city of Glendale, the Phoenix suburb where the Coyotes play, would receive $50 million free of any conditions. In his earlier bid, that amount could have been as low as $40 million. Balsillie also removed his Sept. 21 deadline for completion of the sale.

The NHL, meanwhile, kept its bid at $140 million but agreed that Coyotes owner Jerry Moyes and Wayne Gretzky, the team’s managing partner and head coach, should come away with some $14 million between them. Moyes would get the lion’s share of that

Under the NHL’s initial bid, Moyes wouldn’t receive anything.

Judge Baum noted that the potential purchaser must satisfy all legal requirements and that neither party was "there yet". The NHL also argued that, under the condition of a "no sale", it should be granted control of the Franchise in the interim.

NHL lawyers just laid out a bombshell in the courtroom: When asked by Judge Baum if coach Wayne Gretzky's large salary was covered by the NHL's bid, the reponse was "no." This means that if the NHL is granted ownership, then the NHL plans on replacing "The Great One" as head coach of the Coyotes.

Balsillie's lawyers have asked for a recess in order to amend their bid. Glendale officials say they will decide on the $50 million payment by Wednesday, September 21, a bid that has already been denied unofficially by the city.

PSE amended their bid, officially making the $50 million offer to the city of Glendale as payment for immediate relocation. Balsillie's total bid is $242 million.

The NHL's offer stayed at $140 million, but has been amended a bit to include an $18 million offer to the estate of Jerry Moyes and waives secured debt worth $30 million.

Stay tuned.

Court proceedings continued today as both sides stated their arguments in favor of a sale to either bidder for control of the Phoenix Coyotes. It was a testy affair, as lawyers threw jabs at the other side in a constant effort to discredit their counterpart.

One of the more talked about statements from the day came when one of the NHL's lawyers said, "There are more hockey fans in the U.S. than the entire population of Canada." Unsure of the validity of that claim, but it's a bold one.

NHL Commissioner Gary Bettman took the stand to face questions regarding the NHL's bid. Balsillie's lawyers argue that the NHL knew it was going to place a bid on the team long before making the announcement, in effect blocking other bids from happening. They also stated that the NHL has fought the sale to Balsillie because of a personal dislike, and not anything business or hockey related. The fact that the NHL admits a relocation to Hamilton would in fact be profitable doesn't serve to help their side much.

Balsillie's lawyers claim that the NHL wants to do the same thing he does: purchase the Coyotes and relocate them to somewhere more feasible for hockey. The NHL doesn't want Balsillie to own the team and instead wants to sell the team to the ownership group of their choice, which violates the contractual agreement franchises have with the team.

Court will reconvene at 5 p.m. EST, at which time good faith will be argued followed by the auction for the Coyotes. Judge Baum still says that there is a good chance neither bid will be accepted, and that he will not be making a decision on the case today and not to expect one before September 21.

Judge Redfield T. Baum said that it is "possible" that the Phoenix Coyotes will not be sold by the end of this current bankruptcy auction, The Toronto Star reports.

The suggestion threw a wrench into proceedings, which had previously been solely focused on the sale of the Coyotes to the NHL or Jim Balsillie, with no third alternative ever discussed:

"You're all forgetting there's a third option here," said Baum.

"No sale."

It was the first time anyone had suggested that possibility in a morning filled with revelations.

The judge also asked if there were any other interested bidders besides Balsillie and the NHL present, which there were not.

Stunning that more people aren't lining up to take on Gretzky's coaching salary, isn't it?

Toronto Maple Leafs blog Pension Plan Puppets examines an open letter written by Hamilton businessman Gabe Macaluso, in which he claims the Maple Leafs were trying to muscle Hamilton out of bidding on the team.

In the conclusion of their piece (which is definitely worth taking the time to read), they casts some doubt on Macaluso's credibility:

Based on his track record I am not sure that I'd put my money on his predictions. ...There's still a long way to go but the characters in the process are becoming more interesting than ever.

Credible or not, wild open letters are what disputes like this should be all about. Keep them coming, Gabe.

From The Rink writer James Mirtle compares the case of the Denver Rockies relocating to New Jersey in 1982 to the current situation of the Phoenix Coyotes, finding some pretty telling parallels between the two scenarios:

Given what franchises were selling for at the time — the Red Wings sold for $8-million that year — the nearly $30-million McMullen had to put up in 1982 dollars was seen as incredibly burdensome. The relocation and indemnification fees alone translate to about $45-million in today's currency, which apparently came as the result of a court ruling the Rangers had a territorial veto. (The details on this are unclear.)

So, in any event, if we do get down to the point where the judge has to determine a relocation fee, expect the Devils case to come up yet again.

Of course, the Devils also faced talk of relocation about 10 years after they got to New Jersey, which Glendale advocates might want to bring up when looking for reasons to bring Hamilton's viability as a long term NHL locale.

The Phoenix Coyotes find themselves today in bankruptcy court, being auctioned off to the highest bidder.

As expected, only two bids have been made. One was placed by the NHL, which would keep the team in Glendale until they can find an owner. The second bid comes from Jim Balsillie, who would move the team to Hamilton, Ontario.

The breath of all of Canada is bated. The breath of most of Phoenix seems largely indifferent.

If Jim Balsillie is successful in acquiring the Phoenix Coyotes through bankruptcy proceedings, it appears that he will hire former Columbus Blue Jacket president and Florida Panther coach Doug MacLean as an advisor to his company according to Sportsnet.

I'll leave it to you to be the judge of how smart Balsillie is given MacLean's career record as a coach was a .487 winning percentage and his career as a front office executive hasn't been much better as he posted a 172–258–62 record while running the Columbus Blue Jackets. Of course MacLean is best known for steering a young Florida Panthers team to the Stanley Cup Finals in 1996, only to be swept by the Colorado Avalanche.

Don McGowan of the National Post says the Coyotes auction scheduled for tomorrow morning could well be the start of new legal battles rather than an end to the saga.

One thing is for certain: Unless the NHL and Balsillie suddenly reach a detente, the legal wrangling won't stop.

"It's unlikely this is the last step," said Gabriel Feldman, an associate professor of law and director of the sports law program at Tulane University in New Orleans. "We might be just at the introduction to this case."

If Baum sides with Balsillie, the league has vowed to appeal.

Jim Balsille's attempt to sway the City of Glendale was a failed attempt. Balsille tried to buy the City of Glendale by offering them $50 million to break the lease. City officials were not impressed with the offer from Balsille.

"We have not altered our position, the city has been very adamant about keeping the Coyotes in Glendale," said Julie Frisoni, a spokeswoman for the city. "That position has not changed."

Looks like the potential owner list for the Phoenix Coyotes is down to Jim Balsillie and the NHL.

In a court filing late Tuesday afternoon, NHL commissioner Gary Bettman said the third potential bidder, a group of Canadian and American businessmen known as Ice Edge LLC, told him they "do not currently intend to participate in the auction."

The auction will be held Friday, September 11th.

In his ongoing effort to land the Coyotes, Jim Balsille is now offering up to $50 million dollars to the city of Glendale.

If Glendale accepts, PSE will reduce the rest of its original $212.5 million bid by $20 million. The end result is an offer worth up to $242.4 million, but is still contingent on the ability to move the club to Hamilton.

Ice Edge Holdings became a big story a couple of weeks ago when they announced their plan to buy the Phoenix Coyotes. They were quickly pushed aside and the talk focused on Jerry Reinsdorf, the NHL and Jim Balsille. Five for Howling points out why everything might change on Tuesday.

Yet while no one was paying attention and focusing on NHL v. Balsillie a funny thing happened. Ice Edge actually became a serious contender in this thing. In fact they've apparently managed to get close to the one thing Jerry Moyes, and Jerry Reinsdorf failed to. A renegotiated lease with the City of Glendale.

If Ice Edge can secure a lease with the city, it would be difficult for a judge to rule against them. Afterall, it is the easiest solution for the judge. It could please the NHL because the team will remain in Phoenix and Jim Balsille will not be able to complain of the NHL bias towards him.

Adding to what is already an extremely confusing and complex situation, Jerry Moyes has fired shots at the city of Glendale in court documents released on Friday.

"Glendale does not care about other creditors; instead, Glendale desperately wants the team to stay in Glendale, regardless of its financial condition, regardless of its repeated losses, regardless of the increasing debt, and regardless of who picks up th tab (so long as it is not the City)."

James Mirtle has some good analysis of what Moyes might be after with all of this shady maneuvering.

One other issue Moyes's lawyers address is Glendale's claim that the debtors were the reason Jerry Reinsdorf dropped out of the mix. In a bit of a twist, the filing argues that it is the city, in fact, that is the reason Reinsdorf left the table.
Consider that it was one of Moyes's lawyers who (allegedly) accidentally revealed information regarding what "occurred in Glendale's negotiations with the Reinsdorf group," revelations that the city argues caused him to withdraw his bid. Now Moyes's camp wants the city to unveil more information as a way of proving they were the ones who caused Reinsdorf to walk?

I hope that someone can make sense out of all of this, because I get a headache as soon I even start to try. Good thing Mirtle is all over the situation at his blog.

Ken Peters of the Hamilton Spector is reporting that the NHL is raising their reocation fee to $195 million.  They are claiming that a team in Hamilton would be worth $315 million while a team in Phoenix would be worth only $120 million.

Prospective Hamilton franchise owner Jim Balsillie should pay as much as a $195 million relocation fee for the right to move the bankrupt Phoenix Coyotes to Steeltown.

In its latest court file the NHL said two sports consultants set a “reasonable’ relocation fee at between $101 million to $195 million.

As the auction for the Phoenix Coyotes nears, Ice Edge CEO Anthony LeBlanc contends his company's bid is still alive and well.

"We remain confident we will finalize everything that needs to be done by Thursday," Ice Edge CEO Anthony LeBlanc said in an email to The Associated Press.

Ice Edge's bid is significant because the company wants to keep the team in Glendale, yet will need to secure a new lease agreement with the city in order to purchase the team.

The big fight right now is between Jim Balsillie, who desires to purchase the team and move it to Hamilton, Ontario, and the NHL. The league plans on purchasing the team and then reselling it outside of bankruptcy. To further complicate matters, the NHLPA says that it will accept the NHL and Balsillie's bid, but not the one from Ice Edge.

Judge Redfield T. Baum will continue to study over 900 court documents this weekend as they prepare for the auction next week.