Ottawa Senators Owner Eugene Melnyk Fires Back At Jim Balsillie

Jim Balsillie continues to draw the ire of NHL stakeholders.

The latest to speak out against the co-CEO of Research in Motion is Ottawa Senators owner Eugene Melnyk.

In a lengthy statement released Thursday, Melnyk addressed recent court filings from Balsillie which called his integrity into question and openly opposed the BlackBerry billionaire’s desire to buy the Phoenix Coyotes.

“I clearly believe the sport of hockey is better off without him,” Melnyk said in the statement.

The NHL’s board of governors recently rejected Balsillie as a prospective owner because he lacks “good character and integrity.” In response, he filed documents in an Arizona bankruptcy court that mentioned Melnyk and other NHL owners while arguing that the league hadn’t considered the character of previous buyers.

That touched a nerve with Melnyk, who claims to have unsuccessfully tried to reach Balsillie after being “dragged … into his hurricane of legal filings.” The two men don’t know one another well and have not spoken about the issue.

“I will say in response publicly that his willingness to drag down anyone he can get his hands on along with him is discouraging and saddens me,” said Melnyk.

Melnyk acknowledges in his statement that he’s paid fines to the Ontario Securities Commission for “administrative oversights” but notes that it was a far cry from the sanctions that have been levied against Balsillie and his company RIM.

Melnyk was brought before an OSC panel in June and accused of misleading investors about the financial impact of a delayed shipment of pills caused by a truck crash.

Balsillie had his own brush with the OSC. In February, the commission fined RIM co-CEOs Balsillie and Mike Lazaridis, along with other RIM executives, approximately $77 million to settle allegations they participated in a practice known as stock option backdating.

Backdating creates an stock option on a certain day, but values the stock option at a price sometime in the past when shares were even cheaper – making the potential profits higher.

The practice theoretically rips off the company’s existing shareholders because it’s offering an undisclosed, artificially created price to an exclusive group of shareholders, often executives at the company.

When contacted by The Canadian Press, a spokesman for Balsillie refused to comment on the Melnyk statement.

Balsillie has offered US$212.5 million to buy the Coyotes but the deal is contingent on moving the team to Hamilton.

The NHL wants to keep the team in Arizona and favours a US$148-million bid from Jerry Reinsdorf, who owns baseball’s Chicago White Sox and the NBA’s Bulls.

The case is playing out in a Phoenix bankruptcy court.

NHL deputy commissioner Bill Daly also issued a statement Thursday in support of Melnyk.

“Balsillie’s attempt in any way to disparage (Melnyk’s) reputation and his good standing as an NHL owner is nothing more than a malicious act of desperation,” said Daly. “During his time in the league, Mr. Melnyk has been a model owner and good and loyal business partner to the rest of the league’s clubs.”

Melnyk indicated that he once felt bad for Balsillie but now understands why he shouldn’t be allowed to own an NHL team.

“I have watched with some dismay Jim Balsillie’s fall from being a deserving business icon to what now appears to be a desperate man willing to say anything or do anything to buy an NHL franchise,” he said.

Bankruptcy judge Redfield T. Baum has scheduled a hearing for Sept. 2 in Phoenix to determine whether to uphold the NHL’s rejection of Balsillie. If Baum decides to ignore the vote, Balsillie could participate in a Sept. 10 auction for the Coyotes.

But Melnyk won’t be putting out the welcome mat.

The Senators owner notes that his own entrance to the league involved overcoming obstacles and that he “played by the rules and respected the NHL as an institution.”

Melnyk’s statement ended with a direct message to Balsillie: “I’m comfortable in my own skin, Jim. You should look around at the friends you are losing and the damage you are causing to yourself, the NHL and all Canadians.”