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Daly says NHL controls Coyotes

by Staff
NHL Deputy Commissioner Bill Daly appeared on XM Radio's "NHL Home Ice" show Friday with host Scott Laughlin to discuss the situation with the Phoenix Coyotes franchise. Here is an edited transcript of the conversation between Daly and Laughlin:

Scott Laughlin: Is this the first round of a 15-round heavyweight fight?

Bill Daly: Hopefully, it doesn't go 15 rounds. Hopefully it'll be a quick one and be a one-rounder.

The timetable of this is an expedited timetable. Bankruptcy court proceedings typically move on an expedited basis. And we'll see where we go.

SL: The next key date is May 19. What will happen then?

BD: 'The threshold issue that is going to be briefed by the parties before May 19 and then heard by the court on May 19, with argument, is the issue of who is in control of the Coyotes.

It's our position -- the League's position -- that due to several proxies executed by Jerry Moyes on behalf of the Coyotes in favor of the National Hockey League, that, in fact, we control the Coyotes, have controlled the Coyotes and that he had no authority to put the team in bankruptcy. In fact, there was no need to put the team in bankruptcy.

This whole purpose of putting the team in bankruptcy was to try to avoid their lease, which isn't at all certain, and an effort to relocate the franchise. So it's really an abuse of process -- a sham bankruptcy, in our view. And that's something that the court ultimately will have to decide.

SL: Did the League have any indication that this offer was being tabled?

BD: No. It came out of left field. The discussions between Mr. (Jim) Balsillie and Mr. Moyes were conducted surreptitiously. We had been working with Mr. Moyes for many months on potential ownership options in Phoenix. We were actually encouraged by Mr. Moyes to pursue a local owner, which we did. And we thought we had the issue resolved and we were bringing that solution to Mr. Moyes on Tuesday in Phoenix when we heard that he had filed for bankruptcy.

"So this clearly was a surprise to all of us and we'll have to deal with it."

SL: Given the difficulty his other businesses have been experiencing, did Jerry Moyes panic or become too impatient with the process?

BD: I think, ultimately, what he's trying to do is to preserve as much value in the franchise as he possibly can. Having said that, I think the manner in which he's gone about doing that leads to breaches of many contracts -- including contracts to us but also contracts to the City of Glendale -- obviously a breach of trust both with the people of Glendale and the fans of the Coyotes and a breach of fiduciary duty to his fellow members of the National Hockey League. So we're not at all pleased with the way he's conducted himself.

Actually, as I see it, there have been at least three expressions of interest -- and serious expressions of interest with serious money behind them -- to operate this team in Glendale.

SL: Because this is a bankruptcy case, how real is the fear that a judge could mandate the sale of the team to Jim Balsillie?

BD: Well, a bankruptcy court does have very broad powers. And we obviously are deferential to the bankruptcy court in this case, in terms of what it may or may not decide to do.

Having said that, we think that the bankruptcy court can and should respect the rules that we have, that exist and that affect 29 other franchises. And, in fact, (we think) that the bid that's been put in is really a bid to sell an asset that the debtor doesn't own – that the Coyotes don't own.

What's being offered up here is a franchise opportunity in Southern Ontario. And I'll tell you that that's not what Jerry Moyes bought and that's not what he owns. And it certainly shouldn't be something that he can sell. That franchise opportunity is owned by the League.

SL: If it goes to a judge, will it get to a point where you might have to say, 'Our offer should be respected more because we have the mandate to make sure that our teams don't relocate?'

BD: It could get to that point. Having said that, I don't think we're really talking about apples to apples or oranges to oranges. As I indicated, a sale of a franchise that is expressly conditioned upon the relocation of the franchise isn't really something that Jerry Moyes owns. So, in our view, it's not something the bankruptcy court could even consider."

SL: Bottom line, do you think that next season there will be a franchise in Phoenix?

BD: Yes, I do.

SL: What about three years from now?

Yes, I do.

Actually, that's a good question, Scott. We have been working on the Coyotes situation for almost a year now with a number of different people and constituencies. And I think the constituencies in Glendale and in and around Phoenix are committed to making adjustments to the relationships in such a way that will help the Coyotes and help them survive and be viable in Glendale. And that's a testament to how much that city and those people want to embrace that franchise and we support their efforts in that regard.

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