Balsillie puts in $212.5 mil offer for the Coyotes

[seanlinden]

Now, I think the NHL is the epitome of a garage league, but there's no way I can fathom them not knowing about this. If somehow they didn't, they cement this in my mind forever. The legalese in the filing makes me think they HAD to know because of the 6/30/09 contingency.

Secondly, I don't get what Daly is saying, if this isn't just cover. Is he insinuating the NHL now owns the team? Because unless there's something signed under the table that only they and Moyes know about... they don't.

It appears that they have taken over the team. Their loan to the team allowed them to do so; and while Moyes still owns the team, he doesn't have control over it. It doesn't really matter to him though because he wasn't getting anything out of the deal anyways.

Although, that $17 million in cash up front could have been to pay down the NHL loan thereby removing any and all authority they have.

 

[Vic Rattlehead*]

CBC mentioned an offer would have to be at least 5 million more than Balsille's bid if another prospective owner/ownership group wanted to purchase the team and keep the franchise in Phoenix.

You won't see that, especially when the franchise has lost 200 million over the past eight years (CBC's numbers).

 

[GKJ]

It's looking like that - it's going to the courts.

Whatever is going on here, it looks like they knew what they were doing. If the NHL really didn't want this to happen, and if they had a way to take control of the team, they should have done so if it meant this much about it. Now they have a bunch of egg on their face.

 

[Trottier]

The NHL will not find an ownership group that will put up as much money as Balsille is willing to put up for a dead franchise. People need to face the facts - the demand for a team losing a lot of money every season is going to be very low. I'm still surprised by how high Balsille's offer is, and I can't blame Moyes for accepting.

Another team in Southern Ontario will make a lot of money. Yes, it hurts the NHL's expansion into new markets, but with the shape of the economy, there is no reason to prevent a move to a more lucrative market.

All fair points. I'm admittedly being pollyanish here, as I have a viseral distaste for those fans who look to deconstruct franchises and scavenger them away, without any regard for the current market's fans. (NOT suggesting that is you.) But life is often unfair.

I know one thing: if you have the money, now is the time to be a buyer.

...and Hockey is working in Arizona....The Coyotes are soooo on the verge of going to the next level and doing some damage in the NHL, it's not even funny.

Sounds like Quebec/Colorado, 15 years or so ago.

 

[Hunter Gathers]

Whatever is going on here, it looks like they knew what they were doing. If the NHL really didn't want this to happen, and if they had a way to take control of the team, they should have done so if it meant this much about it. Now they have a bunch of egg on their face.

This could all be a move by the NHL to make it look like they did something in the end, anyway.

All I see is words right now from them. Looks like lip service to Coyotes fans.

 

[guyincognito]

This could all be a move by the NHL to make it look like they did something in the end, anyway.

All I see is words right now from them. Looks like lip service to Coyotes fans.

It has to be. Otherwise the message is "Hi. We're stupid and got caught with our pants down. So, now out of spite, we're stealing a team we don't own."

 

[guyincognito]

It appears that they have taken over the team. Their loan to the team allowed them to do so; and while Moyes still owns the team, he doesn't have control over it. It doesn't really matter to him though because he wasn't getting anything out of the deal anyways.

Although, that $17 million in cash up front could have been to pay down the NHL loan thereby removing any and all authority they have.

In which case, they should take the money and run, otherwise *they* owe the creditors.

 

[GKJ]

This could all be a move by the NHL to make it look like they did something in the end, anyway.

All I see is words right now from them. Looks like lip service to Coyotes fans.

I don't see why they'd bother. Unless they want to get back into the market. Did other such fans get such lip service? Seems like made sure teams moved out of other cities and didn't bother make everyone feel better.

 

[GSC2k2*]

I know you have an agenda, so I will always take what you say with a grain of salt, but you are more knowledgable of these arrangements than I am.

Now, I would assume that the NHL is not the only secured creditor of the Coyotes (as I am sure that Moyes borrowed money to buy the team originally). So, in the presence of these other secured lenders, would such an agreement be allowed? And what rights would these other secured lenders have?

I have an agenda? Exactly what do you think it is? IF anything, my agenda is a bias against people talking about stuff with respect to which they have no background or understanding. Fighting against that is a full-time job on the BoH Board.

For the secured lenders, all that matters is the terms of their own security agreement. If the team was up to date with the compliance of the terms of their agreement (which, if they were not, the secured lenders would have petitioned the team into bankruptcy or otherwise tried to realize on their security), then they can do nothing.

That being said, it is a standard term of secured lending agreements that the filing of a petition in bankruptcy is an event of default in and of itself.

That would then bring into play the terms of the agreement about whether the team would have the right to "cure" the default. If they are allowed to do so, they could cure the default by simply revoking the filing.

If the terms of the lending agreement provided that the filing of a petition for bankruptcy was not a "curable" event of bankruptcy, the NHL can still argue that it was an ineffective filing (in other words, that it didn't happen, in layman;s terms) on the basis that a team representative (Moyes) was not legally empowered to do so.

We shall see, of course.

As an aside, one must remember that the market of southern Ontario as a location of a second franchise is currently effectively an asset of the league. That asset is worth hundreds of millions to the league (at least $212 million by JB's accounting). IF it took paying out $80 million to take out the other secured creditors to preserve a $200 million+ asset, why would the NHL NOT do that?

 

[Vic Rattlehead*]

All fair points. I'm admittedly being pollyanish here, as I have a viseral distaste for those fans who look to deconstruct frnachises and sacavenger them away, without any regard for the current market's fans. (NOT suggesting that is you.) But life is often unfair.

I know one thing: if you have the money, now is the time to be a buyer.

I don't wish any team to relocated (I've seen the Expos taken away myself). However, it's evident that the Coyotes franchise has lost too much money over the years, and when a prospective owner comes in with a ridiculously high offer, it's going to be difficult to find anyone willing to buy the Coyotes and keep them in Phoenix.

 

[RR]

Which is why they will vote no. The NHL doesn't want to have to deal with the bad PR for losing a team in the Sun Belt.

Backwards thinking for the NHL if your asking me.

I can see a scenario where the league turns him down and assumes the team, underwrites its losses for a year in hopes of finding a different buyer. The risk is if no buyer is found we're right back here next year.

 

[Lard_Lad]

The NHL will not find an ownership group that will put up as much money as Balsille is willing to put up for a dead franchise. People need to face the facts - the demand for a team losing a lot of money every season is going to be very low. I'm still surprised by how high Balsille's offer is, and I can't blame Moyes for accepting.

Or the judge for agreeing with it, assuming he does. Balsillie played this very well from a tactical standpoint, but if he does get his way it's going to be a very uncomfortable situation with the amount of bad blood between him and the league.

Assuming the likelihood of finding local ownership who can outbid Balsillie is as low as everyone seems to agree it is, about the best thing Bettman can hope for here is a Kansas City group getting their act together quickly enough to give the judge a viable alternative bid. Or maybe challenging the validity of Moyes filing Chapter 11, but I have no idea about the legalities of that.

 

[RR]

This isn't like all the other times. It's the Judge who will make the ruling on this sale, and he WILL side with the investors. That means the only out is if the NHL outbids Balsillie, and that will not happen. Bettman knows he won't have the BOG's support on this.

I'm sorry, Coyotes fans, I really am, but this looks like false hope. It benefits the other 29 teams and it's not Bettman's call this time.

The NHL's recent loans to the Coyotes were conditional on the league being first-in-line among secured creditors, and all others assumed junior positions. The NHL will decide, not the judge, if this deal happens. And it may approve the sale. But it won't be up to solely the judge's discretion.

 

[GKJ]

The NHL's recent loans to the Coyotes were conditional on the league being first-in-line among secured creditors, and all others assumed junior positions. The NHL will decide, not the judge, if this deal happens. And it may approve the sale. But it won't be up to solely the judge's discretion.

Is there a binding contract to that?

 

[HisDudeness]

i want quebec and winnipeg back so bad but hamilton will do.

 

[May Day 10]

the fact is none of us really know the legal landscape of this and how its going to play out.


But really, how long can/will the NHL keep turning down generous offers for these teams who lose money. There has got to be dissent somewhere... and the NHLPA has recently spoke up about the direction they feel the league should go.

 

[Ward Cornell]

The NHL's recent loans to the Coyotes were conditional on the league being first-in-line among secured creditors, and all others assumed junior positions. The NHL will decide, not the judge, if this deal happens. And it may approve the sale. But it won't be up to solely the judge's discretion.

Can't say for sure in this particular case but most of these types of deals that rider clause is void if the amount of loan is repaid in full + agreed upon interest.

Question....if Balsillie has to pay a terrotorial rights fee to MLSE or the Sabres, does that money go into the revenue sharing plan?

 

[MountainHawk]

It might not be the NHL's decision.

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.

 

[guyincognito]

I can see a scenario where the league turns him down and assumes the team, underwrites its losses for a year in hopes of finding a different buyer. The risk is if no buyer is found we're right back here next year.

in this scenario, if they didn't find a buyer, the team would almost certainly fold and an expansion team would take its place.

 

[Egil]

The NHL's recent loans to the Coyotes were conditional on the league being first-in-line among secured creditors, and all others assumed junior positions. The NHL will decide, not the judge, if this deal happens. And it may approve the sale. But it won't be up to solely the judge's discretion.

The League was secured, but I don't think they are senior to other secured lenders, they are all in the same boat.

GS point about the worth of a southern on to the NHL is very interesting and worth discussing. The question though is how much would it cost the NHL to deal with the Phoenix situation without bankruptcy? Balsille's offer gives the equity holders 0 cents on the dollar, and probably gives some of the unsecured lenders a bit of a haircut. So I question if it would only cost the NHL $80 mil to get out of the Phoenix mess.

 

[Dolemite]

Sounds like Quebec/Colorado, 15 years or so ago.

Yeah, that's a really great point.

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.

Exactly. It's clear as a bell that they don't want Balsile in the NHL.

 

[GKJ]

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.

If it's awarded in bankruptcy court, it doesn't seem that way.

They would have to approve relocation though.

lol, is he attempting to shoot himself in the head again? he should just lay low and let the process work through.

Because he's relying on pressure from public opinion to push this through.


My question is why he so desperatly wants to prove that Souther Ontario is 'unserved.' I figured everyone is either a Red Wings, Sabres or Leafs fan for the most part.

 

[Vic Rattlehead*]

Yeah, that's a really great point.



Exactly. It's clear as a bell that they don't want Balsile in the NHL.

They may not have a choice, especially if no one comes up with a better offer.

 

[ej_pens]

It has to be. Otherwise the message is "Hi. We're stupid and got caught with our pants down. So, now out of spite, we're stealing a team we don't own."

Unless you have a copy of the NHL by-laws, you can't make this kind of statement. For all you know, the NHL has every right to revoke the franchise rights.

 

[MountainHawk]

All the bankruptcy court can do is approve the transfer of title.

The NHL would have to approve him the legitimate owner for him to have a vote on the board of governors, or for him to have legitimate decision making powers, for the general manager he appoints to be allowed to enter into standard player contracts, or in fact, for the franchise to even continue to exist.