"This obviously comes as a surprise but we look forward with interest to seeing what the NHL’s bid is. What we’ve said since Day 1 when we launched our bid is all we ask for is the opportunity to get into an auction where all the bids can come forward on a level playing field and may the best bid win."

— Jim Balsillie spokesperson Bill Walker

Jerry Reinsdorf is out, at least for now, as he's unable to meet the bid deadlines due to lack of agreed upon concessions from the City of Glendale. The NHL's stepped in and is now set to bid in his place.

Big news sure, but not of the earth-shattering variety for anyone who's followed the proceedings closely.

There was always the danger that Balsillie's would become the only bid, and always the possibility the league would have to step in and sort things out. The auction is just 15 days away, and while this battle has always been viewed as one between the NHL and Balsillie with a cast of characters lining up on either side, it's now quite literally so.

The league is going to continue to fight the Canadian billionaire's ability to bid in the intervening weeks, but it's looking more and more like the NHL will have to put their number up against his and hope the judge rules in their favour on Sept. 10. The league obviously isn't compelled to bid quite as high as Balsillie given the potential impact relocation will have on the size of creditors' claims, but in theory, the sky's the limit when it comes to the number he can put on the table.

After all, $212.5-million is quite likely only the starting point.

There are a ton of theories out there about how this will all play out, and I'll list a few of them:

• The NHL buys the team, brings Reinsdorf back into the picture and tells Glendale it will sell to a bidder in another city unless there are major concessions on the lease. This assumes that as a result of winning the auction, the league isn't beholden to the lease, however. (One presumes the NHL will continue to attempt to renegotiate its terms as the auction approaches, something that may be more clear when the terms of the league's bid become available on Wednesday.)
  
• The NHL buys the team, begins paying down the debt as the season goes along and attempts to find an outside bidder (even potentially from Southern Ontario) to flip the franchise to for enough money to cover the league's expenses in all this. Again, the lease in Glendale could be a major issue here unless it's dealt with at the auction.
  
• Balsillie manages to win the auction, perhaps by throwing a lot more cash on the table, setting up further litigation. Who knows what happens to the Coyotes for the coming season should that happen.
  

Your scenarios welcome in the comments.

The losses for the Coyotes this season are likely to be incredible (the $40-million range seems plausible), and the longer the league holds onto the franchise, the more of a cash call it will have to make to the other 29 owners. For that reason, any winning bid by the NHL here isn't likely to mean long-term ownership of the franchise, wherever it's about to be located.

(Major League Baseball managed to pull of a major coup in a similar situation when it bought the Montreal Expos for $120-million, as the league pulled in a hefty $450-million from the sale of the team to a group in Washington, D.C. That's not a good precedent for Coyotes fans, but it's worth keeping in mind that this situation doesn't necessarily end with the NHL taking a bath on the costs involved.)

In my mind, this latest twist is a small blow in terms of keeping the franchise in Glendale, as Reinsdorf is really the only legitimate answer on that front. Of course it's certainly possible he's still in the picture and will emerge the owner down the line, but under any other scenario, the Coyotes are likely headed elsewhere.

The day's developments overshadowed all of the other court filings on Tuesday, including one lengthy response from the Jerry Moyes camp to the NHL's suggestions they had "schemed" to sell the team and that the league should now have control of the franchise. In one example, when it comes to the decision of which airline the team should use, the filing vehemently defends Moyes's position as legitimate and not part of a "self-dealing breach of fiduciary duty":

The Debtors take no position on the carrier selected by team hockey management and the NHL. The important points here are that the use of Swift Air was not the self-dealing breach of fiduciary duty the NHL claimed, the NHL’s characterization of Mr. Scudder’s position was patently incorrect, the NHL’s "emergency" motion was baseless, and the NHL once again launched its inflammatory barrage notwithstanding contrary facts of which it was aware.

Further down, Moyes's side gets even more to the point:

At every juncture in these cases, the NHL and its competent attorneys have attempted to delay (or even prevent) the Court from conducting an open auction that includes relocation bids. Why? Because the NHL wants to maintain absolute control over the business of professional hockey, unchecked by this Court and the law.

There's no love lost between these two sides, that's for sure.

What's yet to be determined is if Moyes is deemed a legitimate creditor in the eyes of the bankruptcy court, just one of several major land mines the judge will be navigating in the very near future. What's guaranteed, however, is (a) more drama to come and (b) that the three bids in play are the only ones we'll see on Sept. 10 (with the Ice Edge group still curiously in play).

Stay tuned.

I'll end with a quote from commissioner Gary Bettman, one I've used before, on why the Jets and Nordiques left Winnipeg and Quebec City all those years ago. It seems to apply here, although we'll have to wait and see:

"They couldn’t find anybody else to invest in the team or buy it — which may be the critical mass point — and therefore there was no future for the team there because nobody wanted to own the team there. The fact is, the biggest litmus test ultimately was nobody wanted to own a team there. And when the marketplace decides that it doesn’t want to own a team there, it has no future."

Phoenix's future, right now, is as up in the air as it's ever been, and it should serve as cold comfort that the only somebody who wants to own the team there is running the show.

Photo: azvibe.com