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Ice Edge no longer intends to bid for bankrupt Coyotes

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The Canadian Press
9/9/2009 5:29:40 PM
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PHOENIX - Ice Edge Holdings has formally pulled out of the bidding for the bankrupt Phoenix Coyotes but hinted it may try to buy the team later.

The partnership issued a statement on Wednesday that it was withdrawing because of the inability to reach a new lease agreement with the city of Glendale.

That is the same reason given by a group headed by Chicago sports mogul Jerry Reinsdorf when it pulled out last week.

The Ice Edge departure leaves the NHL and Canadian billionaire Jim Balsillie as the only bidders for the franchise, which is to be sold at auction on Thursday and Friday. Balsillie's bid is contingent on moving the team to Hamilton.

Ice Edge, made up of a group of Canadian and American investors, had said it would spend up to US$150 million to buy the team and keep it in Glendale. The group, whose supporters included Wayne Gretzky, wanted to play five games in Saskatoon.

"We continue to strongly believe in the potential of the Phoenix Coyotes for the long term in Glendale," Ice Edge said, "and therefore we will be examining our options after the conclusion of the bankruptcy auction process."

The NHL says that, if it wins the bid, it plans to resell the team outside of the bankruptcy process, with the first preference to find a buyer to keep the franchise in Arizona. If that isn't possible, the league says it will look to relocate the franchise.

NHL commissioner Gary Bettman said in a declaration Tuesday that Ice Edge was pulling out of the competition. But Anthony LeBlanc, the Ice Edge CEO, told The Associated Press on Wednesday that his company and the city had additional talks Tuesday night and Wednesday morning to try to reach a deal.

"We just came to a collective decision that it just wasn't going to be possible to get this done in time for the bankruptcy auction," LeBlanc said.

He said the city, as a public entity, is in a difficult situation in its negotiations on a lease.

"I don't want to speak for Glendale," LeBlanc said, "but I think they have some challenges in regards to getting a new commercial relationship with the new owners because there are a number of people watching it very closely."

Balsillie has the highest bid, as much as $242.5 million. He upped his bid over the weekend when he offered Glendale $50 million. The NHL has offered $140 million to keep the team in Glendale, at least for now.

The number of documents filed in the complex, often bitter, four-month-old case is approaching 1,000 with Judge Redfield T. Baum yet to rule on the stickiest of the issues involved.

At the top of that list is whether the judge should overrule the 26-0 vote by the NHL's board of governors rejecting Balsillie as an owner. Balsillie also wants the judge to set a reasonable relocation fee since the league says it need not act on moving the team because the issue is moot now that the Canadian has been turned down as an owner.

Still, the NHL has offered two studies that put a proposed relocation fee at between $101 million and $195 million. A study for Balsillie by an economics professor puts the amount at $11.2 million to $12.9 million.

Whatever Baum decides, it almost certainly won't be the end of it. The NHL has promised to appeal and seek a stay if the judge rules for Balsillie. Balsillie, meanwhile, said in a declaration filed Tuesday that he would appeal any adverse ruling.

Balsillie says that if he wins the team may have to play a few games in Glendale before moving to Hamilton. The league vehemently opposes that idea.

Glendale's City Council met behind closed doors to discuss the Coyotes case on Tuesday. City spokeswoman Jennifer Liewer declined to say how Balsillie's offer will affect Glendale's objection to Balsillie's bid.

Coyotes owner Jerry Moyes would get nothing under the NHL's proposal but $104 million from Balsillie's bid. The NHL contends Moyes' $300 million in loans to the team is lost equity and not a debt.

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