Balsillie puts in $212.5 mil offer for the Coyotes

[MountainHawk]

Jerry Moyes failed. Maybe the Coyotes have, that remains to be seen, but given they've had hockey for like 50 years, you'd look pretty dumb to claim 'hockey failed'

 

[Ward Cornell]

What is John Spanos up to these days? If boots doesn't have the money, perhaps Spanos does?

What a joke Bettman and the NHL are.

Calling bruce McNall...calling Bruce McNall!!

 

[MountainHawk]

And is that something the league *really* wants? A folded team and a dispersal draft? This isn't the Arena Football League. Sometimes you just have to say "nicely played, sir" and move on. If the end game is going to be JB or folding, they'd have to be idiotic to pick folding.

That's up to the 29 men in the room.

Personally, I think that they see the dispersal draft as preferable to having someone they have no trust in in their locker room. What happens if Basille decides to refuse to pay into the revenue sharing pot. What if he refuses to honor the salary cap? What if he tampers with other coaches and players? If he can't follow the basic rules in gaining a franchise, why do you think he'd respect any others?

 

[BigMac1212]

^^ That alone should be proof enough that Balsile is unfit for owning a franchise.

 

[LadyStanley]

It is always the NHL's decision. They can't subject it to a unanimous vote, but they do generally have the right to choose who they accept as a partner in their business.

NHL = league. There are bylaws to live by, franchises under league jurisdiction, etc.

But in this case, it's the NHL Board of Governors I believe you mean.


(Getting a bit nit picky, but there are significant differences.)

 

[RR]

Is there a binding contract to that?

According to news reports at the time yes there is. The secured debtors agreed to take the junior positions to protect their assets. My guess is the fear that a bankruptcy and diltution of the assets might not cover all the loans, the league could better protect them against the losses.

 

[MountainHawk]

Also, let's not forget that Balsillie is a man that made his money by illegally stealing another company's patent, and was fined 8 figures by Canadian authorities for accounting fraud. He's just not a trustworthy partner.

 

[Dark4ng3l]

Can't wait until the team is 25 points out of the playoffs, and they are drawing like the Islanders do. Then we can all laugh at the team vultures.

The market in southern ontario could support 4 teams. It's impossible to get tickets to see the leafs they will sell out 100% guaranteed.

 

[GKJ]

He would seem like a hands-on kind of owner, but is he breaking any rules? He just seems to be a giant ****** in respect to the other owners and franchises, but I think we'd have to wait until he's actually an owner before determining how he'd run the team.

 

[MountainHawk]

NHL = league. There are bylaws to live by, franchises under league jurisdiction, etc.

But in this case, it's the NHL Board of Governors I believe you mean.


(Getting a bit nit picky, but there are significant differences.)

Yes, you are correct. My bad.

 

[Quicktimer]

Is the 212 mil figure more then what the coyotes are worth?

 

[GSC2k2*]

Can you explain what this means (I have no idea right now).

In a bankruptcy, secured lenders have rights that are in priority to the rights of unsecured creditors. Generally speaking, in non-liquidation settings the courts will order a "stay" (preventing all parties from realizing upon their security after the order), so certainly that might happen here, notwithstanding my earlier admonitions. IT is often the case that the bankrupt party will go to court and try to get a stay order immediately, to prevent secured parties from doing what the NHL is going to try to do. Whether it is ordered or not depends upon a variety of facts that we have no way of knowing at this time.

So what extra rights in Bankruptcy does that give the NHL over the other secured creditors? This certainly seems like a bit of a mess, but I imagine that all the non-NHL, non city of Glendale creditors would be pushing for Balsille's offer (as it likely gets them the most money). Glendale is clearly near the bottom of the totem pole with their lease agreement, but how much influence will the NHL have?

The first and foremost thing that it does is that it gives the NHL the right to be paid first and to realize upon its security pursuant to its loan agreement before the other creditor.

I would think the City would be an unsecured creditor, although how they didn't get a security interest as part of the Arena Management and Use Agreement is beyond me.

 

[BigMac1212]

Also, let's not forget that Balsillie is a man that made his money by illegally stealing another company's patent. He's just not a trustworthy partner.

^^ And the NHL is going to let this conman get away with it?

Remember when I said the phoenix move would be a black eye to the league? Well, would you sell your team to a crook?

This makes this Coyote fan sick.

 

[rj]

We'll have to see how it works out.

It could set a dangerous precedent.

Precedent?

Teams moving because of financial difficulties and bankruptcies have been going on for 120 years in North American sports.

This is not a Seattle Supersonics where an individual moved a perfectly well-functioning franchise because the owner didn't get a new arena or because he was a mark for another hometown. This is because the team in its current market does not make enough money to cover the costs of operating. If there's a blatant reason for that, than that reason has to be fixed. If not, bankruptcy, and unless the league wants to have 29 teams (which it won't), and unless it wants to run a bankrupt team centrally (the Montreal Expos option, which it shouldn't), than the team is going to move. In this day and age with all the "help" as far as centrally-created revenues from the NHL and a salary cap, there is absolutely no reason any franchise in any market should declare bankruptcy, and that's true for any franchise in major North American sports leagues.

Sorry for the Coyotes fans, but this is a far different situation than the Quebec Nordiques, Winnipeg Jets, Hartford Whalers, Minnesota North Stars. If the team does get moved and shut down, this puts the Phoenix Coyotes more analogous to being included in the group of failed franchises for the same reasons that the Cincinnati Stingers and the Indianapolis Racers no longer exist.

 

[guyincognito]

That's up to the 29 men in the room.

Personally, I think that they see the dispersal draft as preferable to having someone they have no trust in in their locker room. What happens if Basille decides to refuse to pay into the revenue sharing pot. What if he refuses to honor the salary cap? What if he tampers with other coaches and players? If he can't follow the basic rules in gaining a franchise, why do you think he'd respect any others?

lol, then you take the franchise from him. in this case, he's really not broken any rules. he's just being adventageous. if you go down the dispersal out of spite path, you are opening yourself to an anti-trust suit, which is far worse than anything you think JB is going to do as an owner.

I can't stand the guy and I still think those things you cited are ridiculous

 

[Wheels]

Is the 212 mil figure more then what the coyotes are worth?

By most recent valuations, yes, it is a significant amount more than what the Coyotes are worth.

What is more relevant is whether it is a significant amount higher than other possible offers that would allow the Coyotes to maximize the payout to their secured creditors - subject to any rights the NHL has because of the nature of this business.

 

[GKJ]

Precedent?

Teams moving because of financial difficulties and bankruptcies have been going on for 120 years in North American sports.

This is not a Seattle Supersonics where the team moved a perfectly well-functioning franchise because the owner didn't get a new arena or because he was a mark for another hometown. This is because the team in its current market does not make enough money to cover the costs of operating. If there's a blatant reason for that, than that reason has to be fixed. If not, bankruptcy, and unless the league wants to have 29 teams (which it won't), and unless it wants to run a bankrupt team centrally (the Montreal Expos option, which it shouldn't), than the team is going to move. In this day and age with all the "help" as far as centrally-created revenues from the NHL and a salary cap, there is absolutely no reason any franchise in any market should declare bankruptcy, and that's true for any franchise in major North American sports leagues.

Sorry for the Coyotes fans, but this is a far different situation than the Quebec Nordiques, Winnipeg Jets, Hartford Whalers, Minnesota North Stars. If the team does get moved and shut down, this puts the Phoenix Coyotes more analogous to being included in the group of failed franchises with the likes of the Cincinnati Stingers and the Indianapolis Racers.

I'm talking about declaring bankruptcy just to get rid of the team. As a hypothetical, what would stop Charles Wang from doing the same thing?

 

[Cropduster]

Sigh. I'm sick and tired of arguing against Balsillie. At this point, all I can say is as long as he doesn't put in Hamilton. I don't want another NHL team in Buffalo's backyard. Put it somewhere a bit further west or north.

On a related note, I'm planning on buying a smartphone when my current contract runs out next year. I'm so fed up with Balsillie's antics and his efforts to relocate various American teams, that I've decided I'll get an iPhone instead of a Blackberry. Petty? Perhaps, but that's one of the deciding factors.

was that a joke? sorry all, I just started reading this thread and had to stop at this. wow... either I am dumb and don't see sarcasm on a thread or.... well... wow

 

[GSC2k2*]

By the way, according to a financing statement filed in Maricopa County, the security interest of the NHL DOES IN FACT EXTEND to "all assets of the debtor now owned or hereafter acquired". Assuming this language accurately reflects the terms of the Secured Loan Agreement, this would certainly extend to the most valuable asset of the team (the franchise agreement).

 

[RR]

Thanks, Egil. Here is another little point to chew on.

After a cursory review of the documents between the NHL and the team filed in Maricopa County, there is a Secured Loan Agreement between the parties. Among the assets secured was the team's lease and arena management agreement.

Given that the NHL have some sharp cookies at the top (notwithstanding the laughably uninformed opinions of some hockey fans) and they have one of the world's elite law firms representing them (Skadden Arps), I expect that it is highly unlikely that the NHL would not have taken a security interest in the franchise, in addition to their revocation rights under the franchise agreement.

If such is the case, then the franchise would not even form part of the bankrupt estate. Before the judge gets to do what he needs to do, the secured creditors are entitled to realize upon their security.

EDIT: Egil, on your other point, they are senior to the other lenders. One of the documents filed is a subordination agreement that so provides.

Is it feasible that the league could go before the Court as the Senior Creditor and (you alluded to withdrawing the petition as one possibility) simply tell the judge "no thanks" on this deal, the league will maintain its senior position and guarantee the loans of the junior lenders, and simply take over the team? Losses were reported $20M-$30M a year, which the league could conceivably underwrite until another buyer is found or solution worked out.

 

[Dark4ng3l]

By the way, according to a financing statement filed in Maricopa County, the security interest of the NHL DOES IN FACT EXTEND to "all assets of the debtor now owned or hereafter acquired". Assuming this language accurately reflects the terms of the Secured Loan Agreement, this would certainly extend to the most valuable asset of the team (the franchise agreement).

Yes but I would bet that part of the plan is to pay back the league in full so they don't get to take over any assets.

 

[Tawnos]

That's up to the 29 men in the room.

Personally, I think that they see the dispersal draft as preferable to having someone they have no trust in in their locker room. What happens if Basille decides to refuse to pay into the revenue sharing pot. What if he refuses to honor the salary cap? What if he tampers with other coaches and players? If he can't follow the basic rules in gaining a franchise, why do you think he'd respect any others?

Wouldn't he have to enter into the CBA with the union if he were to join the league as an owner? I would've thought that'd be a requirement for any new owner in the league. If you're implying that he would break that agreement, that doesn't make much sense. It would be the quickest way for him to be kicked out.

 

[rj]

I'm talking about declaring bankruptcy just to get rid of the team. As a hypothetical, what would stop Charles Wang from doing the same thing?

Again, that's not a precedent. What do you think Donald Trump has done since the beginning of time? What do you think Chrysler is doing now?

 

[Wheels]

Personally, I think that they see the dispersal draft as preferable to having someone they have no trust in in their locker room. What happens if Basille decides to refuse to pay into the revenue sharing pot. What if he refuses to honor the salary cap? What if he tampers with other coaches and players? If he can't follow the basic rules in gaining a franchise, why do you think he'd respect any others?

That's all well and good for hyperbole. However, it's just that.

He can't refuse to abide by a league rule to which he agrees to adhere by virtue of his membership in the CBA, subject to hefty penalties and fines and possible litigation that he doesn't need. So the revenue sharing pot isn't a real issue.

He can't refuse to honour the salary cap - the NHL office won't approve any transaction that would put a team over the cap.

He tampers with coaches and players, he gets fined.

It's not as though the rest of the owners of the remaining NHL teams are saints - many are just corporations (such as MLSE) run by directors and officers who have no other obligation other than to maximize revenue. Wouldn't you rather have an owner that actually cares about the team's on-ice success instead of just their balance sheet (a la the past 30 years of the Hawks and Bruins until recently)?

 

[Egil]

Also, let's not forget that Balsillie is a man that made his money by illegally stealing another company's patent, and was fined 8 figures by Canadian authorities for accounting fraud. He's just not a trustworthy partner.

The RIM patent dispute was insanity (and the patent office is still in the process of rejecting the trivial patents). The "accounting fraud" was solely related to employee stock options, which was a common move by lots of tech companies at the time. It is also fully resolved as well.