Balsillie and Bettman Go To War

Here's what Lyle Richardson has to say about all this. From his SpectorsHockey.com "Soapbox":

Coyotes Bound for Canada?

Written by Lyle Richardson,

Wednesday, 06 May 2009 09:18

It’s the dream that just won’t die for Canadian hockey fans, that somehow another NHL franchise will one day be located in Canada via relocation of a current franchise or via expansion. I was planning to use this Soapbox article to examine the unlikelihood of a seventh NHL team in Canada when CBC’s Hockey Night in Canada broke the news on May 5th that billionaire Jim Balsillie’s seemingly quixotic quest to purchase an existing NHL franchise and move it to Southern Ontario could be at long last coming to fruition. Phoenix Coyotes CEO Jerry Moyes placed the club into Chapter 11 bankruptcy and Balsillie jumped in with a substantial bid worth a whopping $212.5 million. That would provide sufficient funds to pay off the team’s creditors but the current team owners - which includes head coach Wayne Gretzky - would receive nothing in equity from the sale. By the sound of things Balsillie’s offer will be difficult to top, as Moyes stated any competing bid would have to be $5 million over Balsillie’s. The offer is conditional on the team being allowed to be relocated to Southern Ontario, meaning if the league attempts to block the sale the offer could be withdrawn and the NHL, which has relieved Moyes of his duties and taken over the club, will be forced to try to beat the bushes for other investors. Good luck with that. Moye’s placing the Coyotes into bankruptcy protection comes after months of fruitless efforts by he and the league to attract new investors for a franchise that has been bleeding red ink for a long time. Balsillie’s previous efforts to purchase the Pittsburgh Penguins and Nashville Predators came to naught thanks to efforts by the league to block them. League commissioner Gary Bettman has been barely able to disguise his distaste for Balsillie’s headstrong attempts and it is believed more than few league governors share Bettman’s animosity toward him. As more than one commentator observed the placing of the Coyotes into bankruptcy and Balsillie’s bid caught Bettman and company off-guard, leaving them scrambling to try to gain control of the situation. This time however there may not be much the league can do to prevent the Blackberry billionaire from getting his way. Scott Morrison of HNiC reported an unnamed NHL governor said that even if Balsillie’s efforts to purchase the team goes through he cannot move the club without NHL approval. The league can claim that the Coyotes are league property and as such the league determines where that franchise will be located. Having the club’s future dependent upon the findings of a US bankruptcy hearing however could be a big problem for the league if the court could determine that Balsillie's offer is not only the best one but allows the relocation condition to stand, in which case we can expect the league to file an immediate appeal. That could mean this could be tied up in the courts for some time.

I'll be honest, I refuse to take sides between the midget and the Bill Gates of the 21st Century.

What I will say is this. Gary has some very valid reasons for fighting for as many american teams as he can get. The biggest reason is the NHL is right now in the middle of trying to negotiate a new contract with ESPN, and losing one or more teams in the US and having them fold or move to Canada, reduces the ability of the NHL to negotiate a decent return on their product.

The people I've talked to, all off the record, have no problem with JB but more with the way he has gone about it. In fact one person, in a high ranking position on an NHL team mentioned that Bettman even talked with JB about waiting his turn. The problem is JB doesn't like to be told what to do, and in this case he was basically told that he'll get a team when the NHL decides it's his turn, and then he'll have to abide by their decision on where that team will exist. Neither of those conditions sit well with JB.

Also, Gary has an existing waiting list of potential owners with deep pockets frothing at the mouth to get a team and keep them in the US. I still maintain the top on the list are the Bruckheimers (spelling??) and their desire to move or put a team in Vegas. While I understand the concerns of doing that, I've been led to believe there have been back room talks among all parties involved (Potential Owners, state/city officials, gambling comission, casinos, and maybe even secret NHL representation) about making this a reality in the near term.

The NHL really really wants to tap into the Vegas market and bringing the awards to Vegas not only attracts the people getting the awards (which has been a problem in the past) but also sets the stage for a future all star game, maybe just maybe a franchise.

Back to Midget v JB. My only problem with this situation is that eventually JB is going to catch the NHL in a position where they can't squirm their way out and now you've got a maverick owner with a vendetta, rather than work with him to purchase the Phoenix team and then build a relationship with a man who along with some very smart and influential potential owners grow the game to levels we have never seen south of the border.

Dawg's Wife wrote:Also, Gary has an existing waiting list of potential owners with deep pockets frothing at the mouth to get a team and keep them in the US.

If this is indeed the case, why haven't they come forward already and bought the Coyotes? Where were they when the Preds were in trouble? Several investors had a look at the Coyotes' books and then ran for the hills it was so bad. That leads me to believe Gary never had a serious investor who was willing to take on the huge debt load/risk... and Balsillie really is the only person that seems to want to do it, provided he can move the team to Canada of course.

I've heard Jerry Reinsdorf's name mentioned as a possible investor for the Coyotes, but now that they are in bankruptcy... they'll have to go through the process in the courts.

DW,

Do you, or anyone besides Bettman, truly believe that the NHL could or WILL flourish in the southern US? If I may borrow from your post : "(...) grow the game to levels we have never seen south of the border." That's a very bold statement, and thus far, with the Panthers, TB and now Phoenix, the evidence thus far indicates that Americans seem to prefer watching their Athletes block and catch TD passes and watch their favorite drivers careen at excessive speeds and crash.

True American hockey markets exist, and they have for quite some time and their niche is solid IMO; such as Chicago, Detroit, Minnessota (spelling?) among others so I do NOT dispute that there are some hockey mad Americans out there that do their fair share to live up to the stereotypical Canadian heartfelt view of Hockey; However, while everyone wants to make money, and I understand that and at the same time I admire Balsillie's tenacity as much as Bettman's determination, but in regards to Bettman's undying desire to tap into the Southern US market with the league seems like beating a dead horse, no?

Although, specifically when it comes to Vegas, a friend of mine and I both said that perhaps Bettman isn't far off from Bugsy Siegel; for EVERYONE laughed at Bugsy's dream and vision for what we now know and flock to in droves year after year, so who knows.

SeawaySensFan wrote:

504Heater wrote:I believe DW's post says it all. The NHL may listen to relocation plans for the Coyotes, but they'd like to see as many American teams as possible flourishing.

Bruckheimer's love for hockey is both odd and very fortunate for the NHL. I thing the Phoenix Coyotes have an excellent chance of becoming the Las Vegas Coyotes soon.

Plus the name fits.

I agree with my esteemed GM Hockey forum colleague.

The other question I have is how did the NHL remove Moyes from his position as owner? They clearly insisted they were not running the club just a few days ago...

The opinions fly fast and furious...Steve Simmons from The Toronto Sun:

Balsillie's not so wily

By STEVE SIMMONS THE TORONTO SUN Last Updated: 6th May 2009, 6:11am

Jim Balsillie is well on his way to becoming the dumbest, most stubborn, successful entrepreneur around.

How else to explain his latest hockey outburst -- his clumsy, all-too-public attempt to bully the National Hockey League into allowing him to purchase the now-bankrupt Phoenix Coyotes franchise and move it to southern Ontario.

If all he is attempting here is to find his name in the headlines, he is certainly accomplishing that.

But if he honestly believes he can pull an end-run on commissioner Gary Bettman, secure an NHL franchise, move it, and use a public website to drum up support for a seventh Canadian franchise, then he is either getting terrible advice or he is simply fond of banging his head against the wall. Because that's all he can accomplish here.

This is a war he may not be able to win.

Even if he's willing to overpay for the moribund Coyotes, which he is.

Even if he's wanting to put another franchise in southern Ontario, which makes too much sense, the NHL doesn't work this way. You have to have finesse to get into this club. You have to be subtle.

Balsillie, the Research In Motion boss, can't seem to operate that way.

He doesn't just want entrance into this exclusive club. He wants to bash down the doors.

He tried to get the Pittsburgh Penguins with a rather bullheaded approach. Then he went a step further by attempting to purchase and move the Nashville Predators to Hamilton, going so far as to put season tickets up for sale, much to the chagrin of the NHL head office.

Now comes this very public stance on Phoenix.

But understand this: The Phoenix franchise, once the Winnipeg Jets, is all but dead. The league has tried to find an owner for months and hasn't gotten close. There is next to no fan base in Phoenix, small ticket revenue number, and a lease that is no help at all.

Coyotes CEO Jerry Moyes says he has done everything he can to keep the franchise in Phoenix afloat. Yesterday, he applied for Chapter 11 bankruptcy. The NHL was unaware this was coming, unaware that Balsillie was waiting in the wings.

In some people's words, the league was ambushed yesterday, by both the Coyotes and by Balsillie's overt offer of $212.5 million US for a franchise some people wouldn't pay a dime for.

CONTROL

And this is where it gets a little messy. The league will say it has control over the franchise and any possible movement. They will say that, knowing also there is a long-term lease in Phoenix.

But what Moyes and Balsillie are banking on here is direction from the bankruptcy court: Once the court orders the Coyotes to accept the Balsillie offer, which is entirely possible considering there is unlikely to be another offer anywhere close, then Balsillie will pick up the franchise and attempt to move it, likely to Hamilton, with the NHL fighting it all the way.

This, almost certainly, will go to court, the way Al Davis had to go to court when he moved the Oakland Raiders to Los Angeles in the National Football League many years ago. Davis won his lawsuit against the NFL.

Balsillie is gambling he can win here.

Does a second NHL team in southern Ontario make sense? Yes.

Does Balsillie have the wherewithall to operate this team? Yes.

Is it in the NHL's best interest to have another team around Toronto? Yes.

But the reality is, the number of owners who have attempted to ambush the NHL and succeeded is zero.

STEVE.SIMMONS@SUNMEDIA.CA

Not so wily? Al Davis got what he wanted... I have a feeling Balsillie will too, but it's going to be ugly.

Let me address a bunch of these in one post. First I don't know why the owner's who I've heard want to get involved, haven't or were not called upon for the Nashville, Tampa, etc situations. I can only tell you what I've heard based on the people I get to talk to thanks to Dawg. That has only been for the last 9 months give or take a bit, so I'm not sure what happend or why prior to last Sept.

As for growing the game in the Southern US. I do believe it can happen. I spent several weeks in Dallas last year and found their fans are rabid hockey fans. The population is what something like 12 times what it is in Canada (across the entire us) so even if it seems like few people in the Southern US like hockey, the numbers are still pretty large.

Plus (this is just my opinion and I've posted it several times) if the NHL were to reach a backdoor agreement with Vegas casinos to do what they can to help them increase betting on the game, and in turn work out a an agreement with ESPN to televise more games on US tv, then I think you'll find the numbers grow quite quickly.

Get them betting and they will all watch, and it only takes one rabid fan to turn into 2 then 4 then 8...etc.

My point being the right TV contract with interest in people due to betting or other outside factors can quite quickly turn things around in the US. I never saw Phoenix as being a good place to play hockey, same with Tampa or Miami. The NHL simply went with the oportunity to get expansion fees, without thinking long term what the effect of struggling franchises would be on the league as a whole.

Oh, and Moyes has not been removed as Owner, just the league has stepped in (which is it's right) to ensure it's product is being represented properly. In this case it's in bankruptcy court, but it the NHL has stepped up before and made decisions for teams before.

My biggest question( thanks to Dawg) is why did the NHL allow an owner to walk away from his team in Nashville, but turn around and take over a team in Minnesota.

That to me is mind boggeling.