GLENDALE, Ariz. - Unable to turn the Coyotes around on the ice or in the boardroom, Wayne Gretzky stepped down Thursday as coach and director of hockey operations of the beleaguered Phoenix franchise.

Gretzky has been in limbo while U.S. Bankruptcy Court Judge Redfield T. Baum mulls over bids by Canadian billionaire Jim Balsillie and the NHL to buy the franchise.

"We all hoped there would be a resolution earlier this month to the Coyotes ownership situation, but the decision is taking longer than expected," Gretzky said in a statement. "Since both remaining bidders have made it clear that I don't fit into their future plans, I approached general manager Don Maloney and suggested he begin looking for someone to replace me as coach."

However, NHL commissioner Gary Bettman is keeping the door open to Gretzky remaining with the Coyotes in some capacity if the league's bid for the franchise is successful.

"As always, Wayne placed the welfare of the team ahead of his own in making this extremely difficult decision," Bettman said in a statement. "While the Coyotes have not had the degree of on-ice success that always has been Wayne's objective, there can be no question he has played a vital role in the youth movement that has positioned the Coyotes for success in the future.

"We have nothing but admiration for all that Wayne has done for the game, and are extremely hopeful there will be a prominent role for Wayne with the Coyotes if the league's bid for the club is successful. We look forward to his continued involvement."

A spokesman for Balsillie said his group was focusing on buying the team and would not consider personnel decisions until the judge's ruling.

It wasn't immediately clear who will replace Gretzky as head coach. Dave King was hired as an assistant earlier this week and associate coach Ulf Samuelsson has been running the team's training camp.

But Gretzky's comments suggested a decision had been made on his successor.

"Don has worked hard and explored many options. I think he has made an excellent choice, and so now it's time for me to step aside," Gretzky said.

Gretzky's future with the team had been unclear, further complicated by a hefty contract and the fact that he is a minority owner.

Neither bid assumed that his contract would move forward and it was expected both sides would try to negotiate a new deal with him. A lawyer for the NHL said in court that Gretzky's status was subject to "delicate negotiations." But Gretzky suggests that time has come and gone.

Gretzky, 48, was as diplomatic as ever in announcing his exit, speaking positively about the future of hockey in both Phoenix and southern Ontario - the two ends of the bankruptcy court tug-of-war that has snared the beleaguered franchise.

Gretzky, who is due to make US$8.5 million this season, took over as coach in 2005, compiling a 143-161-24 record. The team missed the playoffs in all four seasons.

Gretzky has been absent from the team during training camp as court proceedings dragged on from the time Jerry Moyes placed the Coyotes in bankruptcy protection on May 5.

The first hint that his status with the team might be changing came at the NHL draft in June, when he wasn't on stage with the Coyotes scouts and executives as they selected Oliver Ekman-Larsson sixth overall. In years past, he was always there to greet the team's newest prospects.

Gretzky also failed to show up for the first day of training camp on Sept. 12, electing to stay away because of his uncertain contractual situation.

The NHL's all-time leading scorer first joined the Coyotes as a managing partner in February 2001 and later became coach on Aug. 8, 2005 - just after the end of the league's lockout. In four seasons under Gretzky, a young Coyotes team failed to make the playoffs.

They appeared to be in position to end that run last season. The Coyotes were sitting fifth in the Western Conference at the all-star break before losing six games in a row to fall out of the playoff picture.

The Coyotes eventually finished 12 points out of the playoffs with a 36-39-7 record.

It has been a trying couple of years for Gretzky off the ice as well. His mother, Phyllis, and grandmother, Betty Hockin, both died during the season.

In 2006, assistant coach and friend Rick Tocchet was arrested for allegedly running an illegal sports gambling ring. The scandal touched Gretzky when it was revealed that his wife Janet had placed bets.

Many were surprised when Gretzky moved behind the bench, but coaching seemed to provide him with a connection with the game he loves. Still, it was strange for some to see the once graceful player jawing and chewing out officials from the bench.

The bankruptcy case has been particularly difficult for Gretzky, who had his personal finances aired as part of the bankruptcy case.

His US$8-million annual deal - for coaching and personal services - was made public in court documents and became a much-discussed topic because it is four times more lucrative than any other NHL coach's contract. It was also revealed in the courtroom that Gretzky was part of the Ice Edge Holdings group which had hoped to purchase the team, agreeing to have his salary reduced to $2 million per year.

"It's devastating for him," Maloney said earlier this month. "He's the nicest man in the world, he'll do anything for anybody. He's almost been painted as a bad guy in this scenario. A portion of his compensation is coaching, it's not the entire compensation - he's the managing partner."

As an unsecured creditor, Gretzky has a claim to $22.5 million. Under current proposals, if Balsillie wins, Gretzky will receive that money. If the NHL wins, Moyes and Gretzky would split $14 million and Moyes would likely get the majority of the money.

Gretzky thanked every staff member of the Coyotes "past and present."

"It was a real pleasure to work with each and every one of you," he said. "I've always said that Phoenix is a great sports city and deserves nothing but the best. I still believe that.

"As a young boy, I learned to play hockey in southern Ontario, and I know what great fans they have there. It's my hope they too will have an NHL franchise in the not too distant future."

In Phoenix, Gretzky surrounded himself with friends, including his former player agent, Michael Barnett, who was fired as general manager following the 2006-07 season.

Another close friend, Hall of Famer Grant Fuhr, became the Coyotes' goaltending coach. Fuhr was replaced this week by Sean Burke.

Gretzky's brother, Keith, serves as the Coyotes' director of amateur scouting.

When he signed a five-year extension in May 2006, Gretzky talked about bringing a Stanley Cup to the desert. When he was asked if it would take that long to build a championship team, Gretzky laughed and replied, "It better not, or I won't be here in five years."

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