Balsillie won PR war

STEVE SIMMONS, SUN MEDIA

, Last Updated: 7:43 AM ET

PHOENIX -- Jim Balsillie has won the public relations war. That much is obvious.

But whether that carries him to any kind of legal victory in U.S. bankruptcy court will be determined when Judge Redfield T. Baum rules on Balsillie's bid to purchase the Phoenix Coyotes and move them to Hamilton.

That ruling will not be rendered Tuesday, with Wednesday or Thursday the more likely date of decision.

A win by Balsillie, enabling him to buy the Coyotes out of bankruptcy for $212.5 million (US), will almost certainly set off another barrage of legal challenges -— with the Maple Leaf Sports and Entertainment Ltd, owners of the Toronto Maple Leafs, likely in the forefront.

A defeat in court will be three strikes, although that probably won't put Balsillie out in his attempt to buy a National Hockey League team and transfer it to Ontario. He is that persistent. He is that wealthy. But a defeat will also mean that this well orchestrated and very public bid has been as much about noise and drum beating as anything substantive.

This week's ruling could mark a historic turn for sport in this province -— or a crushing disappointment.

If you listen close enough to the lawyers on either side of this murky and very personal dispute -— and read the hundreds of pages of documents filed -— a strong case can be argued for either side.

The real question: How will Judge Baum reach his conclusions and whose arguments will he accept?

The myriad of issues have only grown more complicated by the day and the court filings have gotten more and more nasty as the decision gets closer. But from the beginning, Balsillie’s lawyers have indicated that holes in the NHL constitution could be blown wide open by the rules of bankruptcy court.

"I think the laws are on our side," said an optimistic Richard Rodier, Balsillie's chief legal strategist. "I think the facts are on our side. I think there are some things that are very easy calls.'

For the record, and typically, the NHL does not agree.

At issue, and still not settled, is whether former Coyotes owner, Jerry Moyes, was legally allowed to file for Chapter 11 bankruptcy. The NHL claims he wasn't. Court documents filed by Balsillie's lawyers indicate otherwise. The matter was supposed to be determined by mediation prior to this date, but nothing substantial came of that.

The key issue -— and the main complication -— in Balsillie's bid for the bankrupt franchise is the contingency upon relocation of the franchise. Balsillie has no interest in owning the Coyotes unless they can be moved to Hamilton. The league argues vehemently that a bankruptcy court would be overstepping its authority by ruling on the relocation of a sporting franchise in a professional league.

Two precedents of note, however, were raised in Balsillie's filings. One centred on the 1970 purchase in bankruptcy court of the Seattle Pilots of Major League Baseball, who ironically, were bought by now commissioner, Bud Selig, and transferred to Milwaukee by agreement of the court. MLB, for the record, has filed a document to this court siding with the NHL and not surprisingly ignoring the commissioner's purchase of the Milwaukee Brewers.

Another case Baum is certain to consider involves ice cream company Baskin and Robbins. The NHL has argued that franchise location is determined by the league, not by its individual owners.

"You can't buy a bankrupt Starbucks in Hoboken, N.J., and move it to Manhattan without approval of the company," the NHL has argued. But in the case of a bankrupt Baskin and Robbins franchise, a bankruptcy court has ruled that financial distress and changing economic circumstances were reason enough to move and that the ice cream company would be breaching its duty if it disallowed that.

Under more than one owner, the Coyotes have never turned in Phoenix and are faced with a bad arena location, an economic downturn, a barely competitive team, and basically no hope for the future.

The Balsillie lawyers have also argued, in addition to anti-trust violations, that the National Football League's vote to prevent the Raiders from moving from Oakland to Los Angeles, which was overturned in court, favours the move of the Coyotes. The NHL, though, has maintained for years that the Raiders case is now irrelevant.

For every question, there are at least two answers. Maybe more. Judge Baum needs to make only one ruling. The time for a decision is now.


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