The NHL's board of governors unanimously rejected Jim Balsillie's application to become owner of the Phoenix Coyotes on Wednesday, while unanimously approving a bid by Jerry Reinsdorf.

A proposal by a third group was deemed "incomplete." But Ice Edge Holdings was encouraged to continue with the application process.

The board of governors's executive committee convened Wednesday's meeting in Chicago to evaluate each group's bid for the Coyotes, who were taken into Chapter 11 bankruptcy on May 5 by current owner Jerry Moyes.

NHL commissioner Gary Bettman said the process was necessary to comply with the league's constitution and bylaws and an order by U.S. Bankruptcy Court Judge Redfield T. Baum.

"We will so advise the bankruptcy court and we will move this process forward," Bettman said.

Reinsdorf, who owns the NBA's Chicago Bulls and baseball's Chicago White Sox, has offered $148 million US for the Coyotes and wants to keep the team in Phoenix.

Balsillie — the co-CEO of BlackBerry maker Research in Motion — has offered $212.5 million, but the bid is conditional on the Waterloo, Ont., billionaire's being allowed to move the team to Hamilton.

The NHL has submitted to the bankruptcy court that only a professional sports league can determine the location of its franchises and that owners must be approved by the league's board of governors. Bettman, though, said that issue wasn't the focus of Wednesday's hearing.

"This had nothing whatsoever to do with the relocation issue," Bettman said. "All that was considered was the suitability of the applicants of the owners."

"The criteria set forth in the [NHL] constitution and bylaws relates to financial wherewithal, character, integrity and the view whether or not the other owners would deem you a good partner."

Decision coming Aug. 5?

A spokesman for Balsillie said Wednesday's decision wouldn't stop his pursuit of the Coyotes, whose future could be determined next week in an Arizona courtroom.

"We do not think that Jim Balsillie's qualification to be an NHL owner is an issue in this case given his 2006 approval as an NHL owner," Balsillie's spokesman Bill Walker said in a statement.

Balsillie was approved as an owner of the Pittsburgh Penguins in 2006, but he backed out of the deal when the league tried to put restrictions on his ownership, including a provision that would have blocked him from moving the team.

Ice Edge Holdings wants to keep the Coyotes in Arizona while playing "a limited number of home games a year in a chosen Canadian sister city."

The group includes Coyotes minority owner John Breslow among its investors. One of the key figures is Anthony LeBlanc, a former Research in Motion executive.

An auction for bidders seeking to keep the team in Arizona is scheduled for Aug. 5, provided the judge finds the bids satisfactorily meet the demands of the team's creditors.

If not, it is conceivable that bids seeking to relocate the franchise would be allowed.