Phoenix XXIV: How many twists does the scriptwriter have left?

[Dado]

Now I may be taking this out of context but this upsets me. He's not looking forward to it?

In fairness, what is he supposed to say? That he's looking forward to moving the team away? This entire debacle has been bad for the league's image, regardless of how it ends.

And if the franchise does move back to Winnipeg, a little humility might be in order, as the first big dip in the Canadian dollar will have them as the first team right back on the relocate-south treadmill.

 

[PitbulI]

In fairness, what is he supposed to say? That he's looking forward to moving the team away? This entire debacle has been bad for the league's image, regardless of how it ends.

And if the franchise does move back to Winnipeg, a little humility might be in order, as the first big dip in the Canadian dollar will have them as the first team right back on the relocate-south treadmill.

With Thomson being owner? I very much doubt that. But, this isn't even done. This is Bettman telling COG to hurry up and sell the bonds already to make this a done deal. I feel the COG will come through. This is all too good to be true that Winnipeg will get an NHL team back under Bettmans watch.

 

[cheswick]

Now I may be taking this out of context but this upsets me. He's not looking forward to it? Is that Ego/Attitude talking that he doesn't want Winnipeg back in the fold or is he being politically correct saying he doesn't want to pull the plug on Glendale? Or both?

He's taking about having to relocate a team out of Glendale. If you ask him about relocating Winnipeg or Quebec he'll say the league did it cause they had no alternatives. Bettman's mantra as of late has been we keep teams in their locatiosn unless we have absolutely no other options

 

[LadyStanley]

http://thestar.blogs.com/thespin/2011/03/time-for-glendale-taxpayers-to-cut-bait-on-the-coyotes.html
Damien Cox calls on Glendale tax payers to "cut bait"

 

[New User Name]

In fairness, what is he supposed to say? That he's looking forward to moving the team away? This entire debacle has been bad for the league's image, regardless of how it ends.

And if the franchise does move back to Winnipeg, a little humility might be in order, as the first big dip in the Canadian dollar will have them as the first team right back on the relocate-south treadmill.

Well then, maybe Gary will help out with some kind of financial assistance.....revenue sharing?

Didn't he say a while back that if the league had a similar revenue sharing back when QC and Winnipeg were around they might have survived?

 

[goyotes]

http://thestar.blogs.com/thespin/2011/03/time-for-glendale-taxpayers-to-cut-bait-on-the-coyotes.html
Damien Cox calls on Glendale tax payers to "cut bait"

You do appreciate just how tongue in cheek those of us down here take the admonishment and advice we get from Canadian media? He is certainly entitled to his opinion, but our best interst I doubt is his motivation.

 

[cbcwpg]

The GWI very, very likely has D & O insurance, plus some professional E & O insurance for its lawyers. I would assume they have a minimum of a couple million in coverage. No way would it make the city whole. My point was the threat may get the boards attention. I sit on some boards in the Valley. If I read this, I would be all over the Board Chair to have a meeting so we can discuss whether, as a Board, we endorse the actions of the staff or if it is time to step in and say "enough is enough".

I think there is a real chance this is the CoG's ploy here. Will it have any effect? I sort of doubt it, but I don't discount it entirely either.

I understand your premiss that the CoG might/could end up suing the GWI to recoop the financial losses of having the team leave, but the first issue I have with that is... try and prove that value. Future value is just that, future value. Nobody can say just how much potential money value might be lost if the team leaves because there is no way to know that, so what value does the CoG sue for? And just how many pennies on the dollar would the GWI pay out. If the GWI was sued for damages everytime that did thier jobs, they wouldn't exist.

But regardless as to any litigation the CoG might undertake, how that that help Joe fan that just lost the team.

Other than basically saying that if the team leaves you want the CoG to sue for "comfort money" to help you get over the loss, to the fans this means nothing. When the Jets left I didn't care who got paid or didn't get paid or who sued who. My team was gone and that was that.

At this point my message to the CoG would be, if you think you are in the right, issue the bonds at 9% if that's what it takes, and let the chips fall as they may.

 

[Dado]

Well then, maybe Gary will help out with some kind of financial assistance.....revenue sharing?

What's good for the goose is good for the gander - if market A needs revenue sharing to survive, it is difficult to claim it is to superior to other markets that need revenue sharing to survive.

And it becomes extremely problematic to argue market A has improved the overall league revenue situation.

But that's all hypothetical - let's see how this current game plays out.

 

[Killion]

Just another classic example in the battle of states rights vs. the federal government.

Bizarre. This Band is actually based in Northern Mexico & was able to select a swath of land in Glendale pursuant to a land transfer & compensation package. Why the COG didnt just work with them & negotiate a voluntary taxation system, something the Band was quite amenable to discussing, is beyond me. Regardless ones opinion on gambling, VLT's etc, seems to me Glendale shouldve looked for a way in rather than slamming the door in their faces. If Westgates to truly be a Sports/Entertainment hub, whats the problem with legal gambling?.

.....aside from the limited PR value, the Mayor was setting up the City's case for a tortious interference claim AND a D & O claim against the GWI Board. She asked for direct access to the Board, and was denied by the GWI staff (which is unusual since staff always takes direction from the Board in any organization).

If I read this, I would be all over the Board Chair to have a meeting so we can discuss whether, as a Board, we endorse the actions of the staff or if it is time to step in and say "enough is enough".

There was clearly some Brinksmanship going on yesterday. Any coverage the GWI has should action be brought & they lose would be small consolation to the COG & likely take years to determine, appeal, etc. Scruggs & company long gone.... I find it interesting to suggest that its possible the employee's including the CEO of the GWI would be "going Rogue" & acting against the wishes & direction of the Board, however, I guess its possible. Im really completely unimpressed with the organization top to bottom so it wouldnt surprise me.

As an aside; where were they in Prescott, protecting the taxpayers from T.L. Hocking et al, just now reporting it "after the fact" on their website?.

 

[cheswick]

You do appreciate just how tongue in cheek those of us down here take the admonishment and advice we get from Canadian media? He is certainly entitled to his opinion, but our best interst I doubt is his motivation.

I think its cute that people from outside of Canada think Toronto media cares about Winnipeg getting a team one way or the other. Even so much so that they'll skew their reporting. Trust me. Toronto media couldn't care less about Winnipeg.

 

[goyotes]

I think its cute that people from outside of Canada think Toronto media cares about Winnipeg getting a team one way or the other. Even so much so that they'll skew their reporting. Trust me. Toronto media couldn't care less about Winnipeg.

You are likely right. That wasn't my point, however. My point was they probably care less about what is good for Glendale than they do about Winnipeg.

 

[Kismet]

Suing the GWI doesn't mean the deal is over unless the CoG sues to recover damages for the loss of the Coyotes. They could sell the bonds, and sue for the increased interest rate. In fact, if the GWI does sue after the bonds are sold, I am confident that the CoG will countersue for damages.

I have a couple of questions on this:

CoG knew the threat of litigation existed when they attempted to issue the bonds. GWI hadn't been quiet about that and, in fact, sent letters urging them not to proceed.

CoG knew the interest rate could be as high as 9%...based on the permission that they gave Beasley.

In all sincerity, from a legal perspective, is there not an argument to be made that this is not an "increased rate" at all as it fell within CoG's expectations? Does the fact that the "threat of litigation" is not a surprise not have some impact on damage claims?

 

[cheswick]

You are likely right. That wasn't my point, however. My point was they probably care less about what is good for Glendale than they do about Winnipeg.

Fair enough

 

[goyotes]

I find it interesting to suggest that its possible the employee's including the CEO of the GWI would be "going Rogue" & acting against the wishes & direction of the Board, however, I guess its possible. Im really completely unimpressed with the organization top to bottom so it wouldnt surprise me.

Mod: deleted.

Since I'm not a fly on the wall of GWI board meetings, I don't know what kind of briefing they have received. With all the PR and heavy weights coming out against this, even traditionally conservatives questioning the GWI's stance or at least tactics, I can only suspect some Board members are looking for assurances that the staff is taking the right direction. A shot across the bow directed at the Board will likely cause, at a minimum, for the staff the fully answer the questions of any concerned Board members should a meeting be called.

I won't go any further in my discuss since I admit it is based mainly upon my personal speculation.

 

[kdb209]

here is a question....

can the COG assume ownership of the coyotes and run them by themselves?

something like public ownership like in green bay?

The city of Green Bay does not own the Packers, individual people do, a lot of which are Green Bay residents. As to whether that would work in this case even if the NHL allowed it, are there enough individuals in Arizona and elsewhere out there willing to come up with $170 million or whatever to buy the Coyotes and then put up with whatever finances the future brings in its current situation, be it making money or losing money? If you got 10000 people to agree to come together and buy the team, $170 million divided by 10000 comes out to $17000 per person buy-in.

Correct the Green Bay Packers are owned by a non-profit corporation which sold shares to the public.

There appears to be nothing the the NHL Constitution or By-Laws to prevent a city from owning a team - but restrictions on share ownership would likely preclude any Green Bay style ownership.

C & P from one of the Quebec threads:

Seriously, on the subject of the ownership of the nords, Would a Green Bay Packers ownership model be possible?

C & P from the Phoenix threads:

Because I don't believe the NHL allows public ownership of franchises.

As far as I know, there are no restrictions in the NHL Constitution or By-Laws against a public entity owning a franchise.

There are restrictions (By-Law 34) on public ownership via the sale of publicly traded shares - which is a different meaning of public ownership. Public sale of shares is limited to a non-controlling 49% and League approval is required for any share holder who holds 5% ownership - and again at 10%, 15%, ... .

Public (ie gov't owned) ownership by the City or Province does not appear to be prohibited, but would need to be approved by teh BoG, and I would guess that some might have issues with that.

Public (ie public share ownership) ownership under the Green Bay model would likely be limited by the 49% non-controlling share restriction of By-Law 34.

 

[PitbulI]

I have a couple of questions on this:

CoG knew the threat of litigation existed when they attempted to issue the bonds. GWI hadn't been quiet about that and, in fact, sent letters urging them not to proceed.

CoG knew the interest rate could be as high as 9%...based on the permission that they gave Beasley.

In all sincerity, from a legal perspective, is there not an argument to be made that this is not an "increased rate" at all as it fell within CoG's expectations? Does the fact that the "threat of litigation" is not a surprise not have some impact on damage claims?

Good point. The COG knew that the interest rate could be that high. Unless the bond rate is higher than 9%.

I think the COG would sell the bonds at any rate after hearing how Sruggly talks about needing the Coyotes. I think the harm is that the bonds simply aren't selling good enough. Without GWI in the way, the interest could still be high but then that looks appealing to investors as long as a lawsuit isn't looming.

 

[goyotes]

I have a couple of questions on this:

CoG knew the threat of litigation existed when they attempted to issue the bonds. GWI hadn't been quiet about that and, in fact, sent letters urging them not to proceed.

CoG knew the interest rate could be as high as 9%...based on the permission that they gave Beasley.

In all sincerity, from a legal perspective, is there not an argument to be made that this is not an "increased rate" at all as it fell within CoG's expectations? Does the fact that the "threat of litigation" is not a surprise not have some impact on damage claims?

Your question is one of causation. I think the CoG could show that the GWI's actions proximately caused an otherwise acceptable interest rate to become inflated. The CoG's position would be selling the bonds, even at a higher rate, mitigated against any damage of the team leaving. I don't think the CoG would have even a remote problem showing causation. The more difficult issue to prove is did the GWI do enough to actually cross the line by sending threating letters and making public comments about the legality of the transaction, to actually tortious interfere? I believe while Glendale used the term "potential" when discussing the unconstitutionality of the transaction and their intention to sue, they crossed the line and if their position on the legality of the transaction is ultimately shown to be wrong, the GWI is going to get drilled for significant damages that could bankrupt the organization. At a minimum, staff needs to tell the Board this is a possibility if every went against them.

 

[CGG]

I have heard many interpretations of the Mayor's "press conference" yesterday. Very likely because I am a litigator, the impression I got is that aside from the limited PR value, the Mayor was setting up the City's case for a tortious interference claim AND a D & O claim against the GWI Board. She asked for direct access to the Board, and was denied by the GWI staff (which is unusual since staff always takes direction from the Board in any organization). By going public through both the broadcast and print media (her own op ed piece in the AzRep), I view this as a clear shot across the bow not only to the GWI, but also a threat to the Board that they will be named in any suit.

In follow-up statements, the CoG did not rule out selling the bonds at a higher interest rate, nor has the CoG ever said the bonds cannot be sold under any circumstance. I'm not sure whether the CoG will "double down" and sell the bonds at an inflated interest rate, but clearly the Mayor has set forth two "damages" the City will likely claim as a direct result of the GWI's actions. Under scenerio one, the City will claim $500,000,000 in damages due to the loss of the Coyotes. Under scenerio two, the City will claim $100,000,000 in damages because of an inflated interest rate.

We can debate the strength of the City's cause (and I'm sure we will), but I speculate that the GWI has been put on notice of the City's claim, and now the Board of Directors can also determine for themselves that they will likely be named in a lawsuit as well. That may, or may not, get their attention and staff may, or may not, be getting some calls asking exactly what the strategy is with the current "four corners drill".

If you read the statement of the Mayor, the tortious interference claim has already occurred by the GWI sending out letters to underwriters and financial institutional investors claiming that the deal may be unconstitutional and threating to sue. That is classic tortious interference. The only question in my mind is did the GWI's letters go right up to the line, or pass the line? Have they sufficently "hedged" their allegations? I don't think so, but I will admit it is a litigable issue.

Suing the GWI doesn't mean the deal is over unless the CoG sues to recover damages for the loss of the Coyotes. They could sell the bonds, and sue for the increased interest rate. In fact, if the GWI does sue after the bonds are sold, I am confident that the CoG will countersue for damages. I'm sure the CoG can could line up a parade of underwriters and institutional investors that will say under normal circumstances, without the threat of litigation by the GWI, the bonds would have sold at X interest rate (hard to not agree with this given Illinois selling $3 billion in bonds last week and their financial problems outweigh the CoG's). I'm sure the GWI will point to causation and say there were other factors related to the interest rate or ability to sell, but aside from maybe people on this board, I doubt the GWI has any chance of prevailing on that defense. The fact is, the bonds are not selling because of the threat of litigation. Potential buyers who were contacted from the GWI will very, very likely say it was the GWI's letter that chilled their interest in the bonds. I mean, for after all, the CoG isn't selling junk bonds. The credit rating after the much publicized downgrade is still Aa2, and this offering was A1. That is a high grade investment rating.

It is absolutely absurd to think that COG will successfully sue Goldwater for $100 million or $500 million. They would have to prove that the deal as structured (if there is in fact a final lease somewhere) is legal, that Goldwater doesn't actually think it is illegal or never had the intention of suing, and that the letters to potential investors and those letters alone were in fact the only thing that derailed this deal that 100% would have closed otherwise.

Then let's get into the issue of damages, we all know the $500 million from the "fact sheet" is bogus. The CBRE report says if the bonds go through the city gets something like $169 million in revenues (NPV) and $185 million in expenses (again, NPV). So the damages appear to be a negative $16 million.

Start with that, try to factor in some other made-up amounts like lost tax revenue and so on. Chances are you won't get far in actual, verifiable damages.

Since the CEO of Goldwater is spanking the COG in his op-ed piece, I find it highly unlikely that the Goldwater board will all of a sudden have an epiphany and reverse tactics on the deal, and do so within the next "2 weeks".

For someone who thinks an attempted lawsuit by Goldwater is so unlikely to succeed that it could literally ruin Goldwater's reputation, it baffles me that you think the city could somehow be successful in suing Goldwater. Burden of proof is on the plaintiff. Good luck with that, Glendale.

 

[CGG]

Your question is one of causation. I think the CoG could show that the GWI's actions proximately caused an otherwise acceptable interest rate to become inflated. The CoG's position would be selling the bonds, even at a higher rate, mitigated against any damage of the team leaving. I don't think the CoG would have even a remote problem showing causation. The more difficult issue to prove is did the GWI do enough to actually cross the line by sending threating letters and making public comments about the legality of the transaction, to actually tortious interfere? I believe while Glendale used the term "potential" when discussing the unconstitutionality of the transaction and their intention to sue, they crossed the line and if their position on the legality of the transaction is ultimately shown to be wrong, the GWI is going to get drilled for significant damages that could bankrupt the organization. At a minimum, staff needs to tell the Board this is a possibility if every went against them.

I can't believe you're still harping on this. If the tortious act happened when Goldwater sent letters out in January, where's the interference? What did they say that wasn't true:

(1) They were investigating the deal
(2) They don't have all the documentation from COG (as proved by the delivery of another 400 pages of documents in the past)
(3) They feel the deal could be illegal but will analyze it further
(4) They may opt to sue if in fact they determine that the deal violates the constitution.

What of the above are the COG going to file a suit over? You'd have to prove that Goldwater was doing this just to "play" with the COG and never for one second thought the deal was illegal and never intended to sue.

It's not gonna happen.

 

[y2kcanucks]

I understand your premiss that the CoG might/could end up suing the GWI to recoop the financial losses of having the team leave, but the first issue I have with that is... try and prove that value. Future value is just that, future value. Nobody can say just how much potential money value might be lost if the team leaves because there is no way to know that, so what value does the CoG sue for? And just how many pennies on the dollar would the GWI pay out. If the GWI was sued for damages everytime that did thier jobs, they wouldn't exist.

But regardless as to any litigation the CoG might undertake, how that that help Joe fan that just lost the team.

Other than basically saying that if the team leaves you want the CoG to sue for "comfort money" to help you get over the loss, to the fans this means nothing. When the Jets left I didn't care who got paid or didn't get paid or who sued who. My team was gone and that was that.

At this point my message to the CoG would be, if you think you are in the right, issue the bonds at 9% if that's what it takes, and let the chips fall as they may.

It's entirely feasible that if the future "value" is deemed to be a loss that if the CoG does win that case against GWI that they would be forced to pay money to GWI to put the CoG in the position that they would have been in had the team stayed?

 

[Dado]

Toronto media couldn't care less about Winnipeg.

The Globe & Mail - Toronto's National Newspaper.

 

[HamiltonFan]

Interesting. Since we are talking "minor details", maybe you can show everyone that court ruling that states that the transaction violates the state constitution. I would settle for that "minor detail" of GWI having obtained an injunction.

Since I already know that does not exist, how about your cogent analysis as to why the transaction is a subsidy as contemplated under the AZ Constitution?

Since I have never seen that, how about the cogent analysis of ANYONE that you can dig up as to why it is a subsidy?

If you can dig THAT up, then you have other sources than me, because I read almost every out there and have yet to see one.

I am not trying to pick on you or make fun of you. All these folks, while I was gone, decided that it was a subsidy. No analysis took place, and I read every thread.




Tenants get money all the time from landlords. You should ask the question first, I would think. But that's just me.

BTW, while you are answering some of the questions above, you can consider how a "non-hockey-lovin' reader" would be reading this article? Accident? Torture? Clockwork Orange type of deal?

Well..um, you see...uh, a group called Goldwater has done such an analysis, and concluded that it is indeed a subsidy.

http://sports.nationalpost.com/2011/03/03/goldwater-calls-scruggs-on-coyotes-blame-game/

I'll take their word for it over [mod edit] you.

 

[Killion]

I'm so depressed, now I know how jets fans felt.

This, including your avatar. is just so sad.

It's not as much fun as illegal gambling? There's a certain je ne sais quoi about Gambling With Guido...

True enough, I guess. It just seems' to me the two issues (Gambling/Coyotes) are or could be interconnected, creating a bridge, one propping up the other in a complimentary fashion. Sure, its distasteful to many, however, as you know, BC is open for business in that department & is raking in huge profits as a result.

 

[goyotes]

I can't believe you're still harping on this. If the tortious act happened when Goldwater sent letters out in January, where's the interference? What did they say that wasn't true:

(1) They were investigating the deal
(2) They don't have all the documentation from COG (as proved by the delivery of another 400 pages of documents in the past)
(3) They feel the deal could be illegal but will analyze it further
(4) They may opt to sue if in fact they determine that the deal violates the constitution.

What of the above are the COG going to file a suit over? You'd have to prove that Goldwater was doing this just to "play" with the COG and never for one second thought the deal was illegal and never intended to sue.

It's not gonna happen.

They threatened to sue to block the transaction. That is pretty much classic interference. If their position is right on the merits, obviously the GWI wins. If they are wrong, however, they get drilled. We will see how this plays out. I don't see the CoG, after all they have invested, just walking away for the GWI any more than you believe the GWI will walk away from this controversy.

 

[Dado]

Whether it's a subsidy in a "legally punishable in Arizona" kind of way, may still be a matter of conjecture, although CoG's continued public whining strongly suggests it is.

But whether it's a subsidy in a meat-and-potatoes practicality of running a business sense - of that there is no doubt, it's a subsidy, and a hefty one at that.