Balsillie/Phoenix part V
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Clean Hits on Substack
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Clean Hits on Substack
I don't think there is any way in hell this judge is going to tell the NHL they can't choose who owns their franchises and where they are placed. Can anyone see such a ruling as anything but totally ridiculous? Why is Balsillie even trying this? The more I actualy read(admittedly, I've been trying not to read), the more pointless his actions look. The NHL will decide who gets to own a team and where they get to operate it. To think there will be any other end just seems kind of silly to me.
Can someone explain to me, as if I were an eight year old, please, why Balsillie thinks he has a snowball's chance of Baum giving him his way? Why he thinks a bankruptcy court is going to decide that they will now call the shots on how the NHL conducts it's business? I'm just totally lost on this.
Thanks.
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Clean Hits on Substack
It does appear to most people that Balsillie is fighting an uphill battle. I suppose his thinking is partially to gain political momentum for a franchise in hamilton. Hamilton itself is considering its revitalization, and this project is a great fit. And Balsillie does now have the idea on the national agenda, whether or not he in the end does end up being the one able to own a team there, a team many are hoping for.
The other reasons seem well laid out by the reporter in the article. The bankruptcy court provides another door, some leverage, because the judge will be concerned with addressing creditor claims, and may possibly find some of the NHL's reasons for not selling questionable.
from the article
I personally dont fid the competition arguments very compelling in this case, but, apparently a lot of the case law in this area is not completely settled, so perhaps Balsillies is hoping to get just enough leverage to get them to vote him in.
GC72
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- May 24, 2009
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it seems more likely that (and has been stated in this discussion - not my thought) that Ballsilie is pursuing a greenmail strategy - the deal he ends up cutting with the league is that he gets an expansion franchise in 2-3yrs (recession over, allows him time to build his new area in KW, not sure if this would be outside the TML territory - league bylaws state territorial limit is 50miles outside of that teams city's corporate boundary- which means he's likely clear)...this is the deal he does so the league can get him out of the Phoenix (and southern footprint) situtation
YogiCanucks
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Crazy_Ike
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- Mar 29, 2005
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Canadian media trying to spin their bias on the situation again by misrepresenting Kelly's statements?
No surprise there. Keep those nails coming, guys. Maybe toss another shot or two at Bettman's height, see if you can drop below the status of video game media!
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Jake16
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Looks like Rodier and Balsilie drummed up this idea well before the May 5 bankruptcy filing and approached Moyes and convinced him to go along with their scheme.
"Rodier compiled a 30-page dossier and shopped it to hockey fans of significant means. Balsillie might have been the first aspiring NHL owner to be wedded to Rodier's plan, but he wasn't the first to flirt with it.
His approach was disarmingly direct - calling, or in the case of Balsillie, e-mailing potential investors out of the blue.
It was Rodier's idea to chase the Pittsburgh Penguins, and when Balsillie was on the verge of closing the deal in December, 2006, Rodier advised against because of a seven-year non-location clause that had been tucked into the transfer-of-ownership documents. And it was Rodier who managed the controversial season-ticket deposit campaign related to Balsillie's bid for the Nashville Predators in 2007."
http://www.theglobeandmail.com/sports/rodier-a-dogged-strategist-behind-the-scenes/article1172125/
The Bettman Affidavit filed yesterday attaches a 2007 letter from the NHL's lawyers to Balsillie's lawyers addressing the Nashville sale fiasco specifically telling JB not to do precisely what they are now trying again in Phoenix because it violates all the NHL rules.
The various Coyotes corporate entities are subject to the bankruptcy stay, but these guys aren't. I'm wondering if Balsilie and Rodier are succeptable to a civil lawsuit alleging claims for Tortious Interference with Contractual Relations / Business Advantage by:
1. City of Glendale - inducing Moyes to breach the arena lease and other contracts;
2. vendors like Aramark who claim to have $5M claim and major investment in the Glendale Arena concessions - inducing Moyes to breach that contract;
3. others - perhaps even, Coyote season ticket holders and the league.
Wrongfully advising or enticing someone to breach a contract can end up making you liable to the other party.
One other thought: if Moyes and the Coyotes truly belived the league Constitution and Bylaws were unlawful with respect to ownership and relocation issues, why didn't he speak up before and voice his dissent. He's been an owner of the team since 2001 but does not seem to have any record or dissenting when the league invoked those rules against Balsilie and others during that period (Pittsburgh, Nashville, Buffalo).
Plus the Coyotes had no problem collecting their pro rata share of expansion fees and relocation fees imposed by the league in the past under these suddenly "unlawful" clauses (Atl., Minn. Nash. Clb.)
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Mayo Taco Monday
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sounds to me like this Rodier fellow is Balsillie's biggest stumbling block to actually owning a team
Rob
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Considering they've been right about so much in the Phoenix situation I would give them more credit. In particular the Globe and Mail.
Unlike you and me, Jim Balsillie cannot just buy or sell RIM stock on a whim. He would have to file ahead of time if he wanted to divest himself of a large amount of shares. And the market would watch his actions and take cues from them. If JB were to sell a billion dollars' worth of stock in a short period of time. it would certainly depress the stock price.
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LadyStanley
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1. No. I mentioned it because the conventional wisdom had been that none were paid at all.
2. A valid question. We shall see at some point, I suppose.
MoreOrr, at this point, JB has fired his gun. You cannot unfire it. JB has demonstrated that he would be ungovernable as an owner. He demonstrably wants to select which contractual obligations under the NHL constitution he will abide by.
Let's not forget that, unless for some reason Craig Leipold or the NHL decided to release potentially self-embarrassing email themselves, the evidence seems to indicate that JB or his representatives released private business emails of Leipold/NHL to ESPN during the course of the Nashville transaction.
From the NHL's point of view, how can he be trusted?
Fair point.GSC2k2,
I find it somewhat interesting that you have on a number of occasions questioned Balsillie's finances, or at least his access to cash, yet am I to beleive that you are now taking it on face value that these guys are extremely wealthy? What constitutes wealthy in this context?
To be clear, JB's wealth is unquestioned. His liquidity is the only thing I have ever questioned, and at that it is a question of degree, since non-businesspeople think he has $3 billion in cash sitting in his lap.
As a point regarding his wealth, it is important to understand that, when one is calculating one's wealth on the basis of unrealized capital gains (on RIM shares and options, for example), one has to really calculate that person's wealth on the basis of the after-tax value of that unrealized wealth. THAT is quite a bit less than $3 billion, it is fair to say.
I cannot say for sure what Cynamon and Sokolowski are worth. I had heard informally that they were worth a bundle, but their holdings are private, so who knows? As I said, fair point on that.
And yet more of the JB mythology is shredded. Query whether the usual suspects will notice. FYI, Michael Grange (the guy who got the Rodier story) is a basketball guy, more than a hockey guy. I can only guess that he didn't get the memo as to the way that the story is supposed to be covered.
This is of course an excellent point. The issue of tortious interference and inducement to breach contractual relations came up in Nashville, with the Hamilton ticket fiasco.
As I read Rodier's own sworn affidavit filed with the court in May, he has actually already confessed to the elements of a tortious interference with contractual relations. I imagine that the City et al are holding their powder dry because they do not want to come across to the judge as attempting to intimidate the bidders or screw up the judge's auction. It would be poor legal strategy IMO for them to do that. Once this next step is over, though, I would be surprised if the City does not open up with both legal barrels on Messrs. Rodier and Balsillie based on the contents of their own affidavits.
GC72
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- May 24, 2009
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Balsillie owns 6% of RIMM - the stock closed at U$82.70 on Friday - if he had to fund this purchase by selling stock he could easily sell 3M shares in 1 day without impacting the stock whatsoever - 6 month avg daily combined US/Can volume is 23M shares. Balsillie is co-ceo and a minority shareholder - filings are made after, not before a sale - his last filing was Dec 30/08 and it reported that he sold 101800 shs - over what period the sales were made i don't know, but prob over the 4th quarter...this discussion is academic b/c i suspect his financing has been in place for several yrs (raised $'s when he started negotiating with the Pens several yrs ago) and won't have to sell more stock to fund this purchase
GC72
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- May 24, 2009
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the capital gains rate in Canada/Ontario for a top marginal payer is just under 25% - Balsillie's after tax net worth is still over U$2B - as stated above he could quickly and easily raise the required funds to buy this team....
Its simple -- the answer is NO. The Leafs do not want a team encroaching on their fanbase and do not want to devalue their franchise. They also do not want a competitive venue in the area. They claim to have a veto right; and whether or not they actually do doesn't really matter because the threat of the Leafs taking down the league is powerful enough.
It then becomes up to Balsillie to decide whether he wants to own a team or not. Because of his past repuation, the only way he will get approved is if he signs a lifetime guarantee that he will not seek to move a team to Canada; with the penalty of immidiate franchise forfieture if he does.
Alternatively, Balsillie can attempt to raise more than $2billion to try and buy MLSE; and then allow someone else to cash in on his $2billion investment.
The Pouzar
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If you think that the CEO of a public company can sell 10% of his holdings in one fell swoop and not affect the price of his stock, then I am nearly speechless. That doesn't happen, sorry.
That really isn't precedent. I don't think anyone is debating that a team can be bought out of bankruptcy and be moved. The question is if it can be bought and moved without league approval. Considering baseball's anti-trust exemption I'm assuming the move to Milwaukee was approved by the American League.
Maybe someone more familiar with the Seattle-Milwaukee situation can shed some light on what happened there.
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