Balsillie puts in $212.5 mil offer for the Coyotes

[SkullSplitter]

Ever considered that Balsille is doing this for the sake of Research in Motion?

This is a company that basically runs the city of Waterloo. They recently hired (or are in the process of hiring) something like 3000 new employees. One of the big things that hurts their ability to recruit the top tech-people is the fact that they are in Waterloo. Since they've basically been responsible for much of the town's development over the last 10 years, I wouldn't be surprised if they are HEAVILY invested in real estate there.

What better way to increase the value of your real estate and make your company much more attractive to work for (thereby making it more powerful) then by growing the city by putting an NHL team there?

It's sort of the backwards way to approach it (use the NHL team to grow the city instead of growing the city to get an NHL team); but thats gotta be in the back of his mind.

Could they be called the Napoleons in that case?

 

[Brodie]

Ever considered that Balsille is doing this for the sake of Research in Motion?

This is a company that basically runs the city of Waterloo. They recently hired (or are in the process of hiring) something like 3000 new employees. One of the big things that hurts their ability to recruit the top tech-people is the fact that they are in Waterloo. Since they've basically been responsible for much of the town's development over the last 10 years, I wouldn't be surprised if they are HEAVILY invested in real estate there.

What better way to increase the value of your real estate and make your company much more attractive to work for (thereby making it more powerful) then by growing the city by putting an NHL team there?

It's sort of the backwards way to approach it (use the NHL team to grow the city instead of growing the city to get an NHL team); but thats gotta be in the back of his mind.

I don't know... isn't Kitchener a rapidly growing city? Waterloo is essentially the same city.

 

[GSC]

Huh? This discussion started from GSC saying the NHL doesn't need Washington or San Jose for a TV contract.

I said what?

Show me where I said that. I said that including the likes of Atlanta, Miami, Tampa, Phoenix, Raleigh, and Nashville hasn't netted the NHL a major TV contract. That "penetration" argument hasn't amounted to a damned thing other than an also-ran cable outlet showing some games (usually involving the same damned teams every other game).

 

[taunting canadian]

why would the PA care at all

The PA cares because total player compensation is now determined entirely by revenues. The PA has a vested interest in maximizing league-wide revenues.

 

[GSC]

I understand what you're saying but comparing the Coyotes fan base to the Sens, Habs, and Leafs is completely unfair. How long have those teams been in the league? All of those teams have generations of fans, while we have what, maybe 3 generations? I'll tell you what, give us 100 years in the league and if we're still a horrible club with no fans, then we'll leave. Deal?

Apparently I don't since the Coyotes moved from Winnipeg in the first place. If more teams in Canada bring in more revenue, then how come Winnipeg had to move? Everyone keeps clamoring about how a team in Hamilton would thrive when it didn't work in Winnipeg. Also, it's the national winter sport as it it shared with curling. And that came into being in 1994. You think I provide weak arguments, look at yourself.

Sure it's fair, you claimed that placing another team in Canada would be taking fans away from the game where as I provided a concrete example of how it would do exactly the opposite as it did in Ottawa. And you claim Ottawa has been around for generations...yeah, if you count the early 1900's and the Silver Seven. In case you missed the memo, the Sens officially came back in 1992 (only 4 years before your Coyotes came down from Manitoba) and they've certainly had no trouble in attracting new fans between two of the NHL's most storied franchises.

Before I even go into the Winnipeg issue, where did I mention that the Coyotes ought to move back to Manitoba? Kindly point it out to me if you can, because I sure as hell can't remember ever suggesting it? I'm discussing moving the team to Southern Ontario, while you continue to tie it all back to Winnipeg. Talk about making weak arguments and never staying on the subject...Anyway, the Jets moved from Winnipeg because of a 10,000-seat arena and a province that didn't have the population at that time to support the club (not to mention a sagging economy at the time). Currently, Winnipeg's metro population is roughly 700,000. In contrast, the "Golden Horseshoe" of Southern Ontario amasses over 12 million inhabitants. Now, tell me why Southern Ontario wouldn't be an attractive option?

As for your assertion that curling is one of Canada's national sports, you might want to brush up on your Canadian law (National Sports of Canada Act, 1994). Hockey is the national winter sport, lacrosse is the national summer sport. There is no mention in the legislation of curling.

 

[The Big Dog*]

The PA cares because total player compensation is now determined entirely by revenues. The PA has a vested interest in maximizing league-wide revenues.

... And Phoenix is hemorrhaging money (roughly 60% of which belongs to the players under the CBA).

 

[Proboscis]

Ever considered that Balsille is doing this for the sake of Research in Motion?

This is a company that basically runs the city of Waterloo. They recently hired (or are in the process of hiring) something like 3000 new employees. One of the big things that hurts their ability to recruit the top tech-people is the fact that they are in Waterloo. Since they've basically been responsible for much of the town's development over the last 10 years, I wouldn't be surprised if they are HEAVILY invested in real estate there.

What better way to increase the value of your real estate and make your company much more attractive to work for (thereby making it more powerful) then by growing the city by putting an NHL team there?

It's sort of the backwards way to approach it (use the NHL team to grow the city instead of growing the city to get an NHL team); but thats gotta be in the back of his mind.

Every real indication has always been that Jim Balsillie wants to place a team into Hamilton on a permanent basis. He and his camp have never even hinted at placing a team into Kitchener or Waterloo.

 

[Dolemite]

http://www.fromtherink.com/2009/5/6/867162/without-knowing-a-lot-of-the
Wings Alt Governor Jim Devellano

The owners like to do these things on a quiet basis and get things done properly. Gary Bettman wants to hockey to work in Phoenix and I for one think it can work in Phoenix.

Mr. Devellano is 100% correct. Hockey is working in Phoenix. The roots are starting to penetrate the ground and is poised to grow deep roots.

 

[Evil Doctor]

Wow ... a lot of posts, not enough substance.

FIRST:
Bettman and the BOG continues to fight Balsillie as an owner (be it PITT, NSH, PHX or anywhere else) because of ONE simple reason:
Balsillie does not want to play by the rules.There is a process to follow in obtaining a team and in where that obtained team is located. JB wants it his way and his way only. If he followed the process, he'd eventually get somewhere. You simply CANNOT fault Bettman and BOG for standing their ground when someone (anyone) tries to curtail the process that protects the league and its owners.

BOTTOM LINE:
- If Balsillie won't follow the process established by the league to become an owner, then he shouldn't be allowed to become one.

I was going to wade through all the new posts before commenting but I couldn't let this one go. You can't bash Jim Balsillie for not following rules because there are no rules, the NHL has constantly changed the rules to suit their whims and has NEVER given Hamilton a fair shake for the last 84 years.

One just has to look at recent history, first with the Penguins where Gary Bettman at the last second forces in a clause that Balsillie has to keep the Penguins in Pittsburgh even if the new arena deal falls through. Then with Nashville, Leopold is forced to take a lower bid with the excuse that Balsillie started a season ticket drive in Hamilton even though the so call rules in the NHL state that you have to show market viability before you can move a team.

Rules? Don't make me laugh....

 

[Fourier]

Ever considered that Balsille is doing this for the sake of Research in Motion?

This is a company that basically runs the city of Waterloo. They recently hired (or are in the process of hiring) something like 3000 new employees. One of the big things that hurts their ability to recruit the top tech-people is the fact that they are in Waterloo. Since they've basically been responsible for much of the town's development over the last 10 years, I wouldn't be surprised if they are HEAVILY invested in real estate there.

What better way to increase the value of your real estate and make your company much more attractive to work for (thereby making it more powerful) then by growing the city by putting an NHL team there?

It's sort of the backwards way to approach it (use the NHL team to grow the city instead of growing the city to get an NHL team); but thats gotta be in the back of his mind.

Let's just put this argument to rest. Balsillie's plan to get an NHL team has nothing to do with trying to recruit for RIM. What is also true is that being located in Waterloo actually gives RIM a major advantage in hiring top-tech people.

Rim's head offices are located on the boarder of the University of Waterloo, a school that produces as many top CS grads as any school in the world. The school is consistently the top North American school in the ACM computing contests (the unofficial world championships for undergrad programmers) having won the contest several times. Rim has hundreds of UW grads working for it, including many of its top people.

Balsillie wants a hockey team, pure and simple. He can afford it becasue of his position at RIM. But this has nothing what so ever to do with trying to further RIM's fortunes.

 

[drivier]

I still don't understand what the following have to do with this discussion:

a) Whether Southern Ontario/Phoenix/Winnipeg/Timbucktoo are hockey markets.
b) Whether the PM/NHLPA Exec./NHL BoG/Fans/My Mother like Jim Balsillie.
c) Whether a team will survive in Southern Ontario.

Shouldn't way into the equation at all.. let's talk business. That's what matters... and maybe someone who is a bankruptcy lawyer can weigh in (man I'm so looking forward to my Bankruptcy classes as a 1L next year at law school now).

Can anyone speculate on the actual situation? I know that sports franchises are pretty rare and uniquely intertwined as public-private partnerships with the arena...

Anyone know any bankruptcy rulings that deal with international move stipulated as a caveat for approval of the purchase? That'd be interesting to me.

The only think that matters.. Balsillie is interested in a franchise. That franchise is failing financially and has been for a while and there is no immediate reprieve. The owner is willing to sell (or is forced to sell). Let it go... he can make or lose money in Ontario as he sees fit.

This is just too personal... Bettman has all his toys with his friends in his sandbox and doesn't want to let anyone come in and join... but I'm hoping he can't control this one... the strength of the league is as much about the game as it is about the interest of OWNERS (not the league exec.)... Back the bus up Bettman... this isn't a fight that's good for the league or its fans.

 

[Evil Doctor]

That's the thing. Ottawa's average ticket cost is way up there and yet they still average over 19,000 fans a night. Even the standing room tickets are expensive.

But with Phoenix you can get 4 tickets, 4 dogs and 4 pops for $80 and they still can't get people to the arena.

Offer that deal in Ottawa and people will be selling their first born for that deal.

I would drive the five hours to Ottawa for that deal...

 

[Jarnberg]

hen with Nashville, Leopold is forced to take a lower bid with the excuse that Balsillie started a season ticket drive in Hamilton even though the so call rules in the NHL state that you have to show market viability before you can move a team.

Rules? Don't make me laugh....

Revisionist history much? Bettman did NOT block the sale between Leipold and Balsillie. I don't know why it has to be stated so many times. Even after it was found out that Balsillie was taking season tickets, Leipold was moving forward with the deal. The only reason Leipold didn't go forward with Balsillie was because Balsillie didn't move forward with the deal. Balsillie had to put more money on the table and didn't.

Balsillie wanted the NHL to approve a relocation before a sale, something that they do not do. They first have to approve the sale and then hear the case for relocation.

Balsillie didn't want to do that and thus didn't move forward with the deal and Leipold found other buyers.

Balsillie would likely own the team right now if he had played by the rules. And we can argue all day about whether or not his relocation application would have been approved, but that is all speculation and guessing.

The fact remains that Leipold canceled the deal with Balsillie because Balsillie didn't move forward with the deal. Yet somehow this is not attributed to the magical powers of Bettman.

People who think that this is Bettman vs. Canada are delusional. This is more about following league procedures and rule enforcement.

 

[seanlinden]

Let's just put this argument to rest. Balsillie's plan to get an NHL team has nothing to do with trying to recruit for RIM. What is also true is that being located in Waterloo actually gives RIM a major advantage in hiring top-tech people.

Rim's head offices are located on the boarder of the University of Waterloo, a school that produces as many top CS grads as any school in the world. The school is consistently the top North American school in the ACM computing contests (the unofficial world championships for undergrad programmers) having won the contest several times. Rim has hundreds of UW grads working for it, including many of its top people.

Balsillie wants a hockey team, pure and simple. He can afford it becasue of his position at RIM. But this has nothing what so ever to do with trying to further RIM's fortunes.

Ask yourself this; have you ever been to the city? Most of the people who go to school there aspire to move away when they graduate. Many are kept by the security of a job, but putting a team in Waterloo makes it a much better place to live.

 

[Fugu]

Revisionist history much? Bettman did NOT block the sale between Leipold and Balsillie. I don't know why it has to be stated so many times. Even after it was found out that Balsillie was taking season tickets, Leipold was moving forward with the deal. The only reason Leipold didn't go forward with Balsillie was because Balsillie didn't move forward with the deal. Balsillie had to put more money on the table and didn't.

Balsillie wanted the NHL to approve a relocation before a sale, something that they do not do. They first have to approve the sale and then hear the case for relocation.

Balsillie didn't want to do that and thus didn't move forward with the deal and Leipold found other buyers.

Balsillie would likely own the team right now if he had played by the rules. And we can argue all day about whether or not his relocation application would have been approved, but that is all speculation and guessing.

The fact remains that Leipold canceled the deal with Balsillie because Balsillie didn't move forward with the deal. Yet somehow this is not attributed to the magical powers of Bettman.

People who think that this is Bettman vs. Canada are delusional. This is more about following league procedures and rule enforcement.

There was the matter of having to sign an NHL document that said he would not move a team under ANY circumstances for SEVEN years...

I agree that the anti-Canada thing is a bit much, to say the least. The biggest obstacle to a second Toronto region team has always been Canadian...

 

[Fugu]

Let's just put this argument to rest. Balsillie's plan to get an NHL team has nothing to do with trying to recruit for RIM. What is also true is that being located in Waterloo actually gives RIM a major advantage in hiring top-tech people.

Rim's head offices are located on the boarder of the University of Waterloo, a school that produces as many top CS grads as any school in the world. The school is consistently the top North American school in the ACM computing contests (the unofficial world championships for undergrad programmers) having won the contest several times. Rim has hundreds of UW grads working for it, including many of its top people.

Balsillie wants a hockey team, pure and simple. He can afford it becasue of his position at RIM. But this has nothing what so ever to do with trying to further RIM's fortunes.

This sounds like advertising to me!

I still don't understand what the following have to do with this discussion:

a) Whether Southern Ontario/Phoenix/Winnipeg/Timbucktoo are hockey markets.

b) Whether the PM/NHLPA Exec./NHL BoG/Fans/My Mother like Jim Balsillie.

c) Whether a team will survive in Southern Ontario.

Shouldn't way into the equation at all.. let's talk business. That's what matters... and maybe someone who is a bankruptcy lawyer can weigh in (man I'm so looking forward to my Bankruptcy classes as a 1L next year at law school now).

Can anyone speculate on the actual situation? I know that sports franchises are pretty rare and uniquely intertwined as public-private partnerships with the arena...

Anyone know any bankruptcy rulings that deal with international move stipulated as a caveat for approval of the purchase? That'd be interesting to me.

The only think that matters.. Balsillie is interested in a franchise. That franchise is failing financially and has been for a while and there is no immediate reprieve. The owner is willing to sell (or is forced to sell). Let it go... he can make or lose money in Ontario as he sees fit.

This is just too personal... Bettman has all his toys with his friends in his sandbox and doesn't want to let anyone come in and join... but I'm hoping he can't control this one... the strength of the league is as much about the game as it is about the interest of OWNERS (not the league exec.)... Back the bus up Bettman... this isn't a fight that's good for the league or its fans.

The Coyotes arena was in Glendale was in built in partnership with the city. Absent a bankruptcy, the team would have had to pay a huge fine (~$750 million) as a termination fee to break the lease (lease term was 30 yrs).

The terms of the sale are between the seller and the buyer. The buyer can stipulate that he will only go through with the agreement if he can move the team. The seller has now taken one step that breaks the tie with the current arena-- filed for bankruptcy.

I don't know that viewing this as an international move is relevant since there are several NHL teams already resident in Canada (or another way to put it is that the team would be within current NHL territory).

Regarding the rest of your post, yes, the current owner seems to be in need of an immediate reprieve. He may be using the JB offer as leverage against the league-- no, I'm not going to accept Reinsdorf's cheap offer so if you really want to avoid this mess, show me the money. He's the legal owner of the franchise (including all its debt). The asset can only be seized by creditors if he can longer pay his debt. I'd presume that's why he filed for Ch 11 protection. On the flipside, the NHL will have to make its case - to the bankruptcy court - that they are de facto owner of the franchise rights so an owner can't even file for bankruptcy w/o their approval. (Doubtful)

Since there is some legal precedent for owners moving teams without league approval, the best strategy the NHL can take is to prevent ownership transfer from happening at all.

 

[Evil Doctor]

isnt this the last year the Dogs have signed to be the Canadiens farm team?

could it work out the new Hamiltion/Ont team could keep the Dogs in Hamiltion for there own farm club?

If a NHL team moves to Hamilton, I doubt very much it could support an AHL team as well. It was difficult enough to aquire the fanbase they have now with Leafs in their backyard. If there is no move, it would come as no surprise that Montreal will renew it's affiliation considering that Hamilton has strong attendence by AHL standards, and I believe more importantly a strong gate. Ticket prices have crept up over the years to the point they are quite a bit more than that of Major Junior when at one time they used to be comparable.

I've got a good idea:
Let's fold all of the American NHL teams, add several more in Canada (Saskatoon, Regina, Halifax, Yellowknife, London, Moncton, and Winnipeg for starters) ... Take the new re-formatted 14-team league and never let it grow to any city that isn't a "real hockey town" ... golly gee, everybody, wouldn't that be great!!!??!

It'd be fantastic. We'd get the same international exposure and N.American TV coverage as Curling. Players from all of the world will be knocking down the door to make huge salaries. Whooppeee!!!

-t

I would be okay with that, I love curling....

(Damn you Kevin Martin! Why would you throw away your first stone against Scotland in the final end?)

 

[Fourier]

This sounds like advertising to me!

Busted!!! Though it seems my credibility on this subject is being called into question.

Ask yourself this; have you ever been to the city? Most of the people who go to school there aspire to move away when they graduate. Many are kept by the security of a job, but putting a team in Waterloo makes it a much better place to live.

I have lived in Waterloo for twenty years. I have also met with senior execs from firms like Microsoft, Apple, Google, and RIM about strategies for recruiting UW students so I do know a little about this as well. In fact, I was with Mike Lazaridis at a seminar in NYC where he spoke to leaders on Wall Street about how integral the U of W was in his company's development. The fact that RIM and other high tech companies are located on the edge of campus is no accident.

That said, I do agree that having an NHL team in this area would be a big positive for me. But that does not change the fact that recruiting for RIM has nothing to do with Balsillie's motivation for wanting an NHL team.

I would be okay with that, I love curling....

(Damn you Kevin Martin! Why would you throw away your first stone against Scotland in the final end?)

Ah!! Now we're talking about something that really does matter!!!!

 

[Fugu]

Agreed, I was more talking about the 75% that say there is ABSOLUTELY NO WAY that anyone can make any money on an NHL team in Phoenix. Of course my number is still likely low.

Isn't that going off on the wrong track however? The question isn't about making money in Phoenix in some hypothetical sense but making money with the current location and current lease and Moyes debt.

Moyes apparently cannot make money despite having spent ~$200 million in the past few years WITH the current arena deal and location. Don't overlook the fact that Bettman et. al. were meeting with Glendale govt to attempt to change the arena lease terms. Reinsdorf may indeed be able to do 'something' but he's looking at a low entry price, altered arena terms, and perhaps NHL financial backing. All that has been published is that Moyes was supposed to "walk away" from the Coyotes. What about his debt and losses?

How can you post credentials on HF?

The truth is 99% of lawyers have no idea which way this will go, because it has never happened before (though there have been somewhat similar cases in other sports, but still not identical).

The big ? is if the NHL can secure another buyer who will keep the Coyotes in Phoenix. This may force the NHL to waive the 35ish million owed to them.

It's all opinions at the end of the day, "qualified" to make opinions or not. If the answer was as cut and dry as some make it out to be, who would need courts?

 

[May Day 10]

Salaries are still too high. The cap is a great thing, and ideologically, tied to revenue should create strong competition.


The problem in the NHL is that there are 4-8 teams who basically print money, 6-10 teams that struggle.... and the rest can turn a profit if they have a good season with playoffs. If not, they join the 6-10 struggling franchises.

No matter what the teams who make a lot of money will over-pay for players and salaries get out of hand.

You put in a much lower cap, and the NHLPA screams that they only get 30% of league-wide revenue.

You make a socialized revenue sharing system with a cap (which is the easiest/best option IMO). That may be the only way to ensure that all these markets can be competitive forever. It would also give complete control to the NHL. The Leafs and Rangers may not like it though.

 

[Evil Doctor]

Revisionist history much? Bettman did NOT block the sale between Leipold and Balsillie. I don't know why it has to be stated so many times. Even after it was found out that Balsillie was taking season tickets, Leipold was moving forward with the deal. The only reason Leipold didn't go forward with Balsillie was because Balsillie didn't move forward with the deal. Balsillie had to put more money on the table and didn't.

Balsillie wanted the NHL to approve a relocation before a sale, something that they do not do. They first have to approve the sale and then hear the case for relocation.

Balsillie didn't want to do that and thus didn't move forward with the deal and Leipold found other buyers.

Balsillie would likely own the team right now if he had played by the rules. And we can argue all day about whether or not his relocation application would have been approved, but that is all speculation and guessing.

The fact remains that Leipold canceled the deal with Balsillie because Balsillie didn't move forward with the deal. Yet somehow this is not attributed to the magical powers of Bettman.

People who think that this is Bettman vs. Canada are delusional. This is more about following league procedures and rule enforcement.

Talk about revision, propaganda much? At no point did Balsillie remove his deal from the table. He was fully prepared for the team to remain in Nashville for the short term and to fight it out with BoG, legally if he had to. Leopold was forced to take the lesser deal from the Freeman group backed by 'Boots'. If the NHL actually played by there own rules, the Freeman group would never have been accepted as NHL owners because 'Boots' would never have passed the due dilligence process. Of course Bettman was behind it, the BoG only meet once a month, and they never dealt with the Nashville issue until after Leopold took his haircut.

Then surprise, surprise, Leopold ends up as owner of the Wild.

I call shenanigans.....

 

[roosterman]

I was listening to Roger Lajoie last night and he made a point that kind of hit home. It was his opinion that with 24 Americian owners that it makes much more sense to them that if a team goes to Southern Ontario that it needs to have "Toronto" in the name in order to be an easier sell for the American franchises. No disrespect to KW, Hamilton and Vaughn, but these cities are not well known to Americans and maybe viewed as "small time" cities and therefore hard to sell to the US public.

Thoughts?

In my opinion, if the NHL is forced to move the Yotes to Southern Ontario, they would definiately perfer the team to be in Toronto (except for the Leafs of course).

 

[Hounsy]

You make a socialized revenue sharing system with a cap (which is the easiest/best option IMO). That may be the only way to ensure that all these markets can be competitive forever. It would also give complete control to the NHL. The Leafs and Rangers may not like it though.

You would have to believe this would require an aggressive dead wood removal as part of the change over.

 

[saskganesh]

I don't like curling much --Saskatchewan's provincial sport btw - but the roaring game has outdrawn the NHL on NBC before (Turiin Olympics I believe) and probably can do it again. Let's give it a bit of respect, stat.

... I'm listening to Jian Ghomeshi on CBC and he just compared Balsilie to Charlie Brown trying to kick the football that Bettman-Lucy is holding. I smiled.

 

[Evil Doctor]

Here is a link to a Hamilton Spectator article explaining Balsillie's side of the legal arguement...

http://www.thespec.com/News/BreakingNews/article/561686

One highlight showing why the NHLPA care....

In addition to dooming the Coyotes to extinction, the lawyers also argue allowing the NHL to block a move to Hamilton would "deprive consumers of the lower ticket prices that would inevitably flow" from an increase in competition for the support of hockey fans in the Toronto-Hamilton-Buffalo region. In addition, players would be cheated of the chance to have more teams compete for their talents.

"Higher prices and lower output -- the direct result of what is likely to be sought by the NHL -- are the hallmarks of anticompetitive behaviour," they write. "The only reason for denying such request would be to protect the Toronto and Buffalo hockey teams -- both of which maintain dominant market positions -- from the increased competition that would otherwise result from relocation."

And one further interesting item...

"The Phoenix Coyotes have never posted a profit since moving to Arizona in 1996," the lawyers write, adding that where most NHL teams get half their revenue from ticket sales, the Arizona franchise gets only 40 per cent. Its tickets, at an average price of $37.45, are more than $12 a seat below the league average.

That is a price people in Hamilton have to pay to watch the Bulldogs. You can't field an NHL team with AHL money....