MountainHawk
Registered User
He's lost almost $2B in net worth in the last year. He was still at $1.5B in March of this year, but I imagine he would not be looking to tie up 1/3 of his remaining net worth in an arena right now.
Balsillie puts in $212.5 mil offer for the Coyotes
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IMO, it is both.
As I have stated, the location of a second team in SO is an asset belonging (for the most part) to the NHL, with some limited ownership interest for MLSE (within geographic limits). That asset is worth over $200 million. JB is trying to cut his prospective partners out of that money.
So that part is about money.
THe second part is about control. Without the ability to regulate where teams are located, the league - any league - loses its ability to control a key part of its business, which is the awarding of franchises on behalf of the existing partners. A league that loses that control may very easily face anarchy. IF Phoenix can move into TO's area, what is to stop Florida from moving into Mississauga or Hamilton (whichever one JB doesn't go to)? What is to stop NYI from moving across the street from MSG? What is to stop ATL from moving to Detroit or Chicago? Pretty soon, franchises cannot be sold, as they do not carry any expectation of exclusivity, and the whoel thing collapses in on itself. This, by the way, is why (contrary to the opinion of some media idiots in this country) veto rights are really irrelevant. The teams themselves will not vote to allow unfettered movements, out of their own enlightened self-interest in protecting their own territories.
Most leagues will fight to the death to maintain this right.
The rights of franchisors to control the movements/areas of its franchisees is pretty well grounded in the law, for obvious reasons.
Does that answer the question?
I take it your source is the recent Financial Post article GSC?
The same article indicates that that this still leaves, if one were to put ones name on the list today, a wait of over 100 years for your season tickets.
http://www.financialpost.com/story.html?id=1324905
While I cannot find the article, the fact that 24 season tickets were available this past year is a dramatic increase from several years ago, when a mere 4 became available.
The utter hopelessness of attaining season ticket rights may deter a great many from apply or sticking out the ride, but it does not diminish the rabid market for NHL hockey in Toronto. I personally seem to be down to about an 80 year wait.
One year in the playoffs and that list will be back to 10,000 people, a deep run and it will be back to 20,000 people. While admittedly there is your noted factor of the difference between those with the wherewithal to actually afford them and those that want them, the shortcoming is not so significant as to reasonably argue that a point of market saturation has occurred to the point of rendering the financial viability of a second Toronto franchise to be in question.
To say nothing of effectively monetizing a tax liability for another 1/6 of his net worth.
kdb209
Registered User
- Jan 26, 2005
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Balsillie is listed at $1.7B as of 3/11/09 - #430 of Forbes list of billionaires.
http://www.forbes.com/lists/2009/10/billionaires-2009-richest-people_James-Balsillie_PVUQ.html
Since then RIMM has gone up 87% - from $40.34 to $75.40. This likely puts JB's worth well north of $2.5B.
yeah 3 things stick out to me,
1. any other parties need to bring 217.51 million CASH only!
2. NHL is owed $35 million .How long have they been running the Yotes?
3.Think this will change in Bankruptcy court?
"No other proposal to acquire the team provided nearly as much payment to the creditors as that offered by PSE
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The PSE price is $212.5 million, which provides funds sufficient to pay secured creditors in full (approximately $80 million to SOF Investments, L.P. and $35 million to the NHL) and $97.5 million to unsecured creditors, whereas the owners of the Coyotes would receive nothing for their equity investment, including $206.5 million in preferred and common equity that will not be recovered by Moyes under the current offer.
"As Managing Member of the Coyotes, I have a duty to seek a transaction that will return the most in sale proceeds to the secured and unsecured creditors," Moyes said. "No other proposal to acquire the team provided nearly as much payment to the creditors as that offered by PSE, with the understanding that the procedure is in place for other parties to offer more, particularly if the City of Glendale provides financial incentives to keep the team in Glendale. Overbids must exceed the PSE proposal by $5 million and must be fully funded at closing without a financing contingency."
No, I got my information by asking the Leafs to get me on the list and asking how many people were on the list. That article works too, though.
Moving to S. Ontario makes business sense, but politically it is problematic. In the last 30 years the number of NHL games per year has increased by about 80%. That's way more than any other sport. Bettman was at the helm for much of that rapid increase which was mostly to non-traditional markets. By trying to take a team from one of those non-traditional markets to Canada Balsilie is challenging Bettman's decison-making over the past decade and a half and thus challenging Bettman's authority and position.
Yes. Just like owning a fast food franchise probably carries with it the a zone of exclusivity.
How about the scenario where the bankruptcy court allows JB to buy the team but the NHL declines to let him relocate to S.O.? It seems to me that the NHL might lose some leverage on the ownership side if it went to court, but they could decline to allow the Coyotes to move to SO--and I have a hard time seeing any US court telling the NHL they must allow him unfettered freedom to relocate.
Alberta Yote
Owns the Yotes
No "financing contingency". Unless I'm wrong that doesn't mean that a competing offer needs to be all cash but that the offer cannot include financing that isn't already guaranteed to be in place, condition free. Another term would be a "subject to financing" clause like one that would be in an offer to purchase a house.
Now in order to have guaranteed financing to make an offer on an asset that is on a bid process, I would imagine any lender would require security completely seperate from that asset.
Now in order to have guaranteed financing to make an offer on an asset that is on a bid process, I would imagine any lender would require security completely seperate from that asset.
ESY16
Registered User
Going along with this, can the NHL and/or Glendale provide any incentives (besides giving them cash) to keep the team in Phoenix that would add to the value of a bid to buy a team? If so, if a group wanted to keep the team in Phoenix they could make an offer that has a lower cash-value than Balsillie but due to the incentives would have greater value in the eyes of the court. Just a thought.
guyincognito
Registered User
- Mar 21, 2007
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I don't see how they can be in Phoenix, or even exist, past next season, if the NHL somehow gets this proceeding stopped.
I think the endgame here has them gone in almost all scenarios.
MountainHawk
Registered User
The NHL's loan agreement gives them control of the team, they make all the payments due to creditors tomorrow, withdraw the Chapter 11 filing, and operate the team in Expos mode for a while, until they find an owner acceptable to the BoG.
I think this is the most likely outcome here.
LadyStanley
Registered User
The NHL has stated in the past (including like last week) that they want to make NHL work in Phoenix, at the JOBING.com arena.
And the NHL has invested/loaned $$ helping run the organization (down the stretch), and now seem to be exercising their rights under that loan agreement to take control.
There is no guarantee that the Phoenix franchise *will* move, nor that Balsillie will be the new owner. (There is no guarantee that the franchise will stay either.)
(If anything, the NHL may do almost anything to ensure that Balsillie never gets his hands on a NHL franchise. IOW they've got a bad taste in their mouth and the bruises haven't healed from the last go around with the Nashville franchise.)
Mr. Blackberry can pay whatever price he wants for a team, but he isn't getting a team until the BOG vote him in.
Minnesota(Leopold), Nashville, Buffalo and possibly Toronto will not vote for the guy.
Maybe the other Canadian teams will not vote for him either because that means less national tv coverage for them and lesser coverage.
The southern American teams can all gang up and say screw you to Balsillie and his quest to purge the southern teams.
There is no guarantee that any of the owners want anything to do with this guy. Even if the NHLPA is begging for him to get a team. They don't have a say.
Minnesota(Leopold), Nashville, Buffalo and possibly Toronto will not vote for the guy.
Maybe the other Canadian teams will not vote for him either because that means less national tv coverage for them and lesser coverage.
The southern American teams can all gang up and say screw you to Balsillie and his quest to purge the southern teams.
There is no guarantee that any of the owners want anything to do with this guy. Even if the NHLPA is begging for him to get a team. They don't have a say.
I'll have to think about that one.
So if we're looking for a measure of demand how about all the Leafs fans that travel to Buffalo for a game--and Buffalo raises the prices for those games. It is an indicator of Leaf demand--but not generic demand for "NHL hockey".
I thought we decided a couple years ago that Veblen Good didn't apply in this situation.
LadyStanley
Registered User
guyincognito
Registered User
- Mar 21, 2007
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Who's footing the bill? Let's say they walk around hat in hand and get the money to pay off the creditors other than themselves. The team has to meet the salary floor. This isn't MLB where you can put out a $10M product and turn a profit by default. They will not have an owner, be in limbo and will lose more money next year.
Who is paying for this? It's not fantasyland where you invent the money out of thin air. Teams are struggling, other teams are just getting by and the economic conditions blow... having to shell out some money to cover the losses of the Coyotes could make the difference between profit/loss for some teams.
This going into procedings moved a whole summer full of things forward into a few weeks' space. I really can't see how they will be in Phoenix in 2011 and they may not even exist then. IMO, again, if they're not covering their tracks, I think you just admit defeat here and move on... if no one else steps forward to keep them in Phoenix, and/or no out of town buyer more suitable to the NHL comes along.
That's even worse. MLB limited the amount of roster moves the Expos could make, including destroying the Expos playoff chances in September of 2003 by prohibiting any call ups from affiliates. If Phoenix is owned by the NHL, their budget will not be high enough to ice a competitive franchise. I do not want to see Coyotes fans endure the hell that I and other Expos fans had to endure.
IMO, the team should either be relocated or the NHL needs to find suitable owners quickly.
Rob
Registered User
More to the point, the league may not actually agree to the assignment, and there may be nothing the court can do about it.
There is a common misperception among non-lawyers that bankruptcy courts can simply step in and re-write contracts willy-nilly. Such is not the case. What they CAN do is allow the bankrupt party to repudiate (cancel, or terminate without penalty, in other words) certain contracts. In the US, the types of contracts are defined by both case law and statute. The types of contracts are union collective agreements (by statute) and what are called "executory contracts". Executory contracts are essentially contracts where the performance of obligations are as yet unfulfilled and which obligations by their nature are extended. The classic example, of course, is a lease (which fits the criteria that I just mentioned). A franchise agreement would be another one, although certainly Phoenix would not be seeking to repudiate THAT one!
What the courts cannot do is to rewrite the terms of a contract so as to give more value to it than it has. For example, they cannot take a contract that a bankrupt company has with a third party to manufacture and sell 100 widgets a year for the next five years and decide to unilaterally extend it for ten more years, in order to allow the company to sell that contract for money to pay its creditors. A bankrupt estate cannot take a lease (such as Glendale's lease) and unilaterally reduce the term of the lease from thirty years to two (for example) to increase the value of the team (although they can terminate it, as noted above).
And, unless my reading of bankruptcy law is all wrong and US bankruptcy law has no sense, the bankruptcy court cannot maintain the franchise agreement but rewrite the terms of the agreement by unilaterally deleting the contractual rights of a non-bankrupt party (the NHL) to approve of an assignment of the franchise agreement.
MountainHawk
Registered User
Oh, I agree. I doubt you would see the Coyotes field a team in Expos mode. You might see the NHL owned team participate in the draft/free agency, though, something the Coyotes might not be able to do if Balsillie is awarded the team in court but is not yet approved as the owner by the BoG.
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