Monday, September 7, 2009
NHL: Relocation fee up to $195M
PHOENIX -- Two studies conducted for the NHL set a potential relocation fee of $101 million to $195 million to move the Phoenix Coyotes to Hamilton, Ontario.
The figures are listed in a lengthy brief filed over the weekend in the bitter fight in U.S. Bankruptcy Court over ownership of the franchise.
The potential fees are in stark contrast to the $11.2 million to $12.9 million cited by economics professor Andrew Zimbalist in a study conducted for Canadian billionaire James Balsillie. Balsillie, co-CEO of the company that makes the Blackberry, wants to buy the franchise for $212.5 million, contingent on moving it to Hamilton.
The NHL made a last-minute bid of $140 million to purchase the team and keep it in Arizona.
The team is to be sold at auction on Thursday, but many legal issues have yet to be resolved.
The league, in determining a potential relocation fee, cited studies conducted for the NHL by the Barrett Sports Group and Sports Value Consulting.
The Barrett study concludes that the franchise in Hamilton would be worth $261.8 million to $279.8 million. Sports Value's figure was a whopping $315 million.
Meanwhile, Barrett said the Coyotes in Glendale would be worth $163 million to $176 million and Sports Value places the figure at $120 million.
The NHL refuses to consider the possible relocation of the franchise, however, because its board of governors voted 26-0 with three abstentions against Balsillie as an owner.
The Canadian wants Judge Redfield T. Baum to overrule that NHL rejection and allow the team to move to Hamilton over the league's objection. Balsillie also is asking the judge to set a reasonable relocation fee if the NHL refuses to do so.
The NHL, in its filing, said that even $195 million would not begin to address the true damages done to the league by such a move.
"No relocation fee or indemnity payment [regardless of the amount] could compensate the NHL" if the court takes away the board of governors' ability to determine who owns a team and where it plays, the NHL said.
The league contends there is no precedent for such a court ruling.
The NHL said Balsillie and the debtors group headed by Coyotes owner Jerry Moyes "want this court to create revolutionary new legal and equitable principles in order to get more money into the hands of Mr. Moyes and an NHL franchise in the hands of Mr. Balsillie in Hamilton, Ontario."
Meanwhile, attorneys for Moyes said in a court document that the NHL's solution is simple -- just add $80 million to the league's bid. That would make the NHL's bid the largest.
However, the league and the city of Glendale don't want to give Moyes very little, if anything. Moyes would get $104 million under Balsillie's bid. The league and city contend the money Moyes lost is not a debt but equity. They also want Moyes' claim subordinated to that of other creditors.
The city also is arguing against a $22.5 million claim by Wayne Gretzky, the Coyotes coach who owns a small share of the franchise.
Moyes' attorneys were critical of the tone of the court filings by Glendale and the NHL.
"The city's -- and, for that matter, the NHL's -- continued vilification of all the parties involved contributes nothing to this issue," the Moyes document said.
Not only has Baum yet to rule on the ownership and relocation issues, he also hasn't decided whether Balsillie can get out of the Coyotes' lease to play at Jobing.com Arena, which was built by Glendale for $183 million specifically for the hockey team.
A third potential buyer, Ice Edge, has said it would spend up to $150 million to buy the team, contingent on reaching agreement with the city of Glendale on a new lease. The NHL has yet to vote on Ice Edge as a potential owner.
The Coyotes are being funded by the NHL during the ownership fight. Balsillie wants to move the team immediately if the purchase is successful but offered in court last week to start the season in Glendale, then move as quickly as possible. NHL officials have ridiculed that idea.
Balsillie also offered to play a season in Glendale if the league splits the losses.
Commissioner Gary Bettman said the NHL isn't interested in that idea.
The Coyotes' training camp is to start on Saturday with the preseason game on Sept. 15.