COMMENTARY
Coyotes situation turns ugly
During times like these it’s good to have friends in high places in the National Hockey League office, friends such as the commissioner, who realizes the folly in siphoning fans from one hockey market to another. Forget No-Goal. Nothing could be more important to Buffalo Sabres fans than the health of the franchise, a concern Gary Bettman has repeatedly addressed by helping the team through its bankruptcy and protecting its territory from outside invasion.
Bettman’s affinity for Buffalo, one of the league’s more dynamic and rabid markets, comes in handy whenever there’s talk of relocating an existing team to southern Ontario. And there will always be talk so long as Canadian Black- Berry magnate Jim Balsillie hangs vulture- like over disabled franchises, waiting to execute the swoop-and-relocate maneuver.
First it was Pittsburgh that caught Balsillie’s eye, followed by Nashville, and now Phoenix. Only this time the twice-rebuffed billionaire ownership wannabe has struck in, depending on your point of view, clever or diabolical fashion.
Balsillie posted $17 million of debtor-in- possession financing—allowing the team to keep operating through bankruptcy proceedings—as part of his hefty $212.5 million offer for the Coyotes. It was a bang-bang deal, the arrangement having been made before the league was made aware the franchise was filing for bankruptcy. As a result, Balsillie outranks the NHL on the matter, which is sure to lead to extensive and riveting bankruptcy court proceedings. The kicker is that Balsillie’s offer is contingent on the team relocating to southern Ontario.
Hamilton is the city most often associated with Balsillie’s relocation attempts, even though it’s conceded that Copps Coliseum requires full-scale renovations in order to become NHL-ready. Such a placement would severely impact the Sabres, who could expect a sharp decline in their Canadian fan base the minute the first puck is dropped. And that could jeopardize the well-being of a franchise that has stabilized by building a solid season ticket-base that includes Canadian subscribers.
The NHL has made it abundantly clear, time and again, that Hamilton is a no-go because of the damage it would inflict upon the Sabres, although Balsillie remains undeterred.
“I think this is an enormously exciting opportunity,” Balsillie told reporters Tuesday night. “I’m clearly just a passionate hockey fan. I just really look forward to this opportunity to bring a seventh team to Canada in the underserved market of southern Ontario.
“This is a deal that I’ve focused on. This is an opportunity that’s come out of the bankruptcy financing. I’m prepared to financially back it.”
The NHL Board of Governors must vote to approve a franchise relocation. In the past, the league has maintained its desired status quo by stepping in to assist ailing franchises, such as the Sabres, the Penguins and the Ottawa Senators. But this time Balsillie’s tactics place the league in an unprecedented predicament. The NHL announced following the deal that it had seized control of the Phoenix franchise from majority owner Jerry Moyes, but with Balsillie having become the bridge between the team and insolvency he may have the league backed up to a wall.
Then again, is it legal to file a bankruptcy agreement that attempts to circumvent the league’s bylaws? If the owners must approve all franchise moves, how is it that Balsillie could construct terms of sale that render the league powerless?
The ensuing legal battle should be a doozy. It’s comforting to know that the commissioner will be covering Buffalo’s back.
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