Phoenix bankruptcy/ownership Part XVII: Wake Me Up When September Ends
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09-08-2009, 11:01 AM
Join Date: Nov 2006
Originally Posted by
Why do you call Balsille upping the ante and giving the COG a BS offer?
What do you consider the NHL offer that has an out clause after 1 year?
An attempt to distract everyone from the real question at hand. The real issue is: Does the NHL have the right to deny PSE's application to become an NHL franchise owner and partner in the Joint Venture?
In Fishman v. Estate of Wirtz 807 F.2d 520, 543-45 (7th Cir.,1986), the Seventh Circuit Court of Appeals held that it was not an antitrust violation for the league to vote "no" to a prospective owner of the Chicago Bulls, holding:
"The NBA does effectively have the power to pick its members since it can reject everyone selected by the incumbent until the right new owner comes along....It is clear that the second step-the act of voting the rejection-cannot by itself give rise to an antitrust violation.....While it is true that the antitrust laws apply to a professional athletic league, and that joint action by members of a league can have antitrust implications this is not such a case. Here the plaintiffs wanted to join with those unwilling to accept them, not to compete with them, but to be partners in the operation of a sports league for plaintiffs' profit."
The situation in the Fishman v. Wirtz case did not involve a move to a new city but two competing bidders for the Bulls to remain and play in Chicago Stadium - then the only acceptable arena in Chicago. The winning bidder made a deal with the arena for exclusive rights and may even have had the lower bid dollar wise. The winning bidder, however, lobbied the other NBA team to vote 'yes' for him and 'no' for the other party (Fishman). Essentially a boycott of the Fishman group occured where the winning bidders, contacted each team and "invited" them to boycott the Fishman group and refuse to vote 'yes' on the franchise transfer to them despite them having entered into a contract to purchase with the existing owner. So the situation was somewhat similar to here where the BOG rejected making Balsilie their "partner" by voting no to his ownership application.
The losing bidder (Fishman) was sucessful on some claims related to the activity shutting him out of the ability to lease the Chicago Stadium. On the issue pertinent to the Coyotes/Balsilie case, however, the 7th Circuit Court of Appeals held there was nothing wrong with, or in violation of the antitrust laws, for the NBA BOG's to vote 'no' to an owner they simply did not like or were "invited to boycott". Case seems to support a 'no' vote on Balsilie by the NHL BOG's without violating any antitrust laws.
Court followed Levin v. NBA decided a few years earlier where the federal district court in New York reached the same result with regard to a 'no' vote to a prospective owner of the Boston Celtics, who then claimed that the NBA's conduct rejecting his application violated the antitrust laws.
Here, the NHL would appear to have grounds for rejected balsilie even if 'just cause" were required. His actions to date show that completely unwilling to consent to the terms of the NHL's Constitution, Bylaws and rules. Those bylaws provide that a team owner only owns the right to operate a team in a given territory and they they must follow certain procedures should they wish to apply for relocation and pay relocation fees etc.. Balsilie, through his conduct, has thumbed his middle finger to those rules. I think that under the Fishman v. Wirtz case a 'no' vote would be justified by any team without violating any antitrust laws.
In Fishman, the court made clear that personal dislike of a prospective owner (or preference of another bidder) leading to a 'no' vote by the BOG did not equate to anti-competitive conduct that would establish a Sherman Act anti-trust violation.
Then there is precedence against requiring movement or expansion Mid-South Grizzlies v. NFL 550 F. Supp. 558 (E.D. PA 1982). In this the Memphis Southmen of the WFL renamed themselves the Mid-South Grizzlies and sought to have their team taken in to the NFL as an expansion franchise. When the NFL refused, Mid-South Grizzlies sued in federal court. The Memphis owners lost on the same principles as Levin; the decision to expand as well as the decision as to who receives a franchise is that of the existing NFL owners alone.The court ruled the NFL could not be compelled to expand to Memphis.
Then there are several additional precedents cited by the League in Court filings. PSE did not file any precedent to support taking the right of approval away from JVs or partnerships. in fact when directly asked in open court by Judge Baum to cite ANY precedent, PSE attorney Mr. Kessler admitted there was none.
That means unless this Judge wants to create new precedent that will surely be appealed, and likely overturned, I believe it doesn't matter if PSE offers $100 Billion for the Coyotes and $200 million to Glendale he is likely to lose.
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