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Balsillie/Phoenix Part VIII: It's dead, Jim

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Old
06-16-2009, 11:07 PM
  #1
LadyStanley
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Balsillie/Phoenix Part VIII: It's dead, Jim

Revenge of Baum







Previous thread: http://hfboards.com/showthread.php?t=650363

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06-17-2009, 12:00 AM
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http://www.montrealgazette.com/Busin...125/story.html

Montreal Gazette on ruling
Quote:
In his decision, Baum said Moyes and Balsillie failed in their argument that antitrust law could be used to circumvent the NHL constitution and allow the team to move against the league's will.
...
Ottawa-based sports business analyst Howard Bloom said despite Monday's ruling, the Coyotes are still on shaky ground. He said the league will likely be forced to operate the Coyotes next season with potential losses reaching $30 million — or a little more than $1 million for every other team in the league.

"The NHL is going to clearly have to show that the [alleged four] bids that they had were legitimate," said Bloom. "There aren't many people out there that believe those bids are legitimate or believe they have enough money to satisfy the creditors."
...
"Some teams that have filed for bankruptcy have come back stronger than ever," Coyotes president and chief operating officer Douglas Moss told reporters Monday night. "We saw signs of that Friday night in Pittsburgh. Three years ago, (the Chicago Blackhawks) had some of the lowest season-ticket bases in the National Hockey League. They've turned those franchises around and (we're) very confident we can turn this franchise around.

"There is no doubt in my mind that this franchise can and will be successful right here in Phoenix."

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06-17-2009, 12:19 AM
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It's dead, Jim
It's not over, until it's over -- i.e., Jim is still able to write a big cheque for an insolvent franchise that will satisfy all of the secured creditors with some money left over for the unsecured creditors. Jim can also write a few other big cheques to resolve some of the other issues.

Now it's time to see a) what the City of Glendale can come up with in terms of additional tax-payer funded subsidies for a new billionaire owner, and whether that will be politically acceptable, and b) whether the NHL can find an owner that wants to operate the franchise in Glendale.

In other words, the ball is now in Glendale's and the NHL's court.

GHOST

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06-17-2009, 12:29 AM
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ESPN legal analyst Roger Cossack says Jim Balsillie has the deep pockets, but he has to play nice. Money talks.
http://watch.tsn.ca/nhl/clip183680#clip183680

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06-17-2009, 01:11 AM
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Originally Posted by GHOSTofMAROONSroad View Post
It's not over, until it's over -- i.e., Jim is still able to write a big cheque for an insolvent franchise that will satisfy all of the secured creditors with some money left over for the unsecured creditors. Jim can also write a few other big cheques to resolve some of the other issues.

Now it's time to see a) what the City of Glendale can come up with in terms of additional tax-payer funded subsidies for a new billionaire owner, and whether that will be politically acceptable, and b) whether the NHL can find an owner that wants to operate the franchise in Glendale.

In other words, the ball is now in Glendale's and the NHL's court.

GHOST
Is it not true PHo is stuck with a watchdog group the GI who will have no part of a new less expensive lease on Glendales arena or sue , seems to me its losers as usual in Coyote land and just bigger creditor bills growing by the day , at this rate NHL wil have to give a local owner the team for a buck to pay the lease off , and JB is a bad guy lol

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06-17-2009, 01:19 AM
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Originally Posted by bbud View Post
Is it not true PHo is stuck with a watchdog group the GI who will have no part of a new less expensive lease on Glendales arena or sue , seems to me its losers as usual in Coyote land and just bigger creditor bills growing by the day , at this rate NHL wil have to give a local owner the team for a buck to pay the lease off , and JB is a bad guy lol
No, it is not true. You are wrong. The Goldwater Institute is an organization that likes to inject itself when it believes taxpayers are getting screwed. If it comes down to concessions to keep the team versus losing the team and getting LESS return on the investment already made by the taxpayers, they'll join the city's fight to keep the team here.

There are plenty of other straws to grasp, so drop GI. It doesn't help your argument unless your boy JB is going to pay Glendale $500M so he can go play in SO. Glendale will happily take that check and GI will find another fight.

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06-17-2009, 01:33 AM
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Coyotes season ticket prices for 2009-10

Here are the season ticket prices for the vast majority of the seats available (see the link below, where they advertise much higher prices for the first two rows and a few select club seats -- why anyone would assume sitting in the first two rows is better than sitting in the tenth row on the blue line of the 2 period offensive zone for the home team is beyond me, but I digress...).

For the 98% or whatever of tickets available:

Lower bowl:
Red Club (centre ice btw blue lines): $80 per game
Lower level (from blue line to goal line): $60 per game
Lower level (tickets behind goal line): $40 per game

Upper bowl:
Upper level centre (btw blue lines): $20 per game
Upper level sides and ends (most of the upper bowl tickets): $15 per game
Upper level ends last 4 rows: $9 per game

Link:

http://coyotes.nhl.com/tickets/season_tickets.htm

The hockey fans in Phoenix have a pretty sweet deal, especially since only 10,900 fans actually showed up for each game on average last year. With about 7,000 empty seats on average per game you'd suspect they could get a cheap season ticket package, as low as $9 or $15 a game, and move to a better location. And the best part, all of that comes with free parking!

You won't find ticket prices anywhere near that cheap for any of the Canadian teams or any of the teams in more established US markets.

GHOST

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06-17-2009, 01:55 AM
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Originally Posted by RousselRising View Post
No, it is not true. You are wrong. The Goldwater Institute is an organization that likes to inject itself when it believes taxpayers are getting screwed. If it comes down to concessions to keep the team versus losing the team and getting LESS return on the investment already made by the taxpayers, they'll join the city's fight to keep the team here.

There are plenty of other straws to grasp, so drop GI. It doesn't help your argument unless your boy JB is going to pay Glendale $500M so he can go play in SO. Glendale will happily take that check and GI will find another fight.
Why would JB pay $500mm to Glendale when he could, if he wanted, probably buy the arena from Glendale for much, much less -- i.e., their remaing obligations on the bonds?

He'd then own the arena and could hire AEG to run it with more concerts, etc., and place an AHL team there or whatever. That's a hypothetical question. I'm not suggesting Balsillie would do that or that Glendale's liquidated damages claim of $500mm would be upheld in court.

Now on to the Goldwater Institute:

Quote:
In a filed declaration, former Coyotes chief executive officer Jeff Shumway claims Beasley tried to keep a letter about the team’s financial condition from becoming public. Coyotes officials also claimed Beasley agreed to $14.6-million in annual subsidies for a new team owner, while he was saying publicly there would be no such financial help.

Beasley has denied doing anything improper.

City council also has to worry about drawing a lawsuit from the Goldwater Institute, a non-profit watchdog group based in Phoenix. The group monitors public spending and has successfully sued municipalities that spend taxpayers’ money improperly.

In a letter sent this month to Glendale Mayor Elaine Scruggs and Beasley, the Goldwater Institute said it will be watching what city council does with the Coyotes and warned of legal action. The letter noted that city revenue is expected to decrease by 12.5 per cent from 2008 to 2010, and it cannot afford to give large subsidies to private companies.

“If it comes down to it, we will do what we need to do,” said Carrie Ann Sitren, a lawyer with the Goldwater Institute.
Doesn't sound like they are in favour of tax payer subsidies for private companies, does it?

Link:

http://www.theglobeandmail.com/sport...rticle1184893/

GHOST


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06-17-2009, 02:16 AM
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Quote:
Originally Posted by GHOSTofMAROONSroad View Post
Why would JB pay $500mm to Glendale when he could, if he wanted, probably buy the arena from Glendale for much, much less -- i.e., their remaing obligations on the bonds?

He'd then own the arena and could hire AEG to run in with more concerts, etc., and place an AHL team there or whatever. That's a hypothetical question. I'm not suggesting Balsillie would do that or that Glendale's liquidated damages claim of $500mm would be upheld in court.

Now on to the Goldwater Institute:



Doesn't sound like they are in favour of tax payer subsidies for private companies, does it?


Link:

http://www.theglobeandmail.com/sport...rticle1184893/

GHOST
Its easy to file a lawsuit: trust me, its alot tougher to win one. There are ways to structure a deal and ways not to - both having the same result at the end of the day. Local governments do things to promote/finance/save existing businesses every day in every state. Obviously Glendale will be very careful here as to how they structure whatever they decide to do for the Coyotes. I'm no municipal law expert, but the easiest way could be to give Reinsdorf $X million in free rent and other concessions at the new baseball park Glendale just built for White Sox and Dodger spring training. (You guys who haven't seen it - its a beaut.)

Plus the City North case was already accepted for discretionary review by the Arizona Supreme Court suggesting that they find something at least questionable with the Court of Appeals decision that could be reversed.

You guys who aren't even from AZ suddenly seem to bow down to the Goldwater Institute like its some sort of Darth Vader just because Shoalts decided to write an article on it (knowing very little about it). Its just some ultra right wing "public interest" group. Did a great job ruining City North development for the Phx. taxpayers so that now they have a proposed mall with 3 empty anchor department stores. (Gee that's economic progress.) But many other projects wit government assistance have passed muster. The key is how the deal is structured and what mechanisms they use. In any event, my hunch is that the Supreme Court reverses the City North decision.

And finally, regardless of what "side" you're on here (Hamilton v. Phoenix; Bettman v. Balsilie; rules count v. we just want and we deserve; the Leafs' and Sabres have rights v. no they don't), haven't you guys, at least now, figured out that Rodier is not the best legal strategist in the world. He's more of a blowhard: alot of talk; alot of ego; little substance. While the judge punted on some issues to be decided at a later time, he flately rejected some pretty major issues from's Rodier's blueprint for structuring this deal:

1. Who owns the asset. PSE clearly lost this huge one. Judge held that NHL owned Hamilton territory, not Moyes.
2. No relocation fees are due the league or any team. PSE lost on this one - Judge said league has right to be paid for their asset ("expansion opportunity") under Raider's II.
3. Application of NHL rules requiring consent to ownership transfers and relocations. PSE lost. Judge held league rules apply.
4. The clause in the consent degree where there team agrees to play in Glendale counts and PSE can't "cherry pick" terms they don't like when assuming a contract in bankrupcty.
5. Antitrust lawsuit will cause team to be able to moved immediately due to "bona fide dispute." Judge disagreed and was suspicous of the entire claim - being filed after the bankrupcty filing and before an ownership transfer application had even been filed, let alone rule on by the NHL.
6. On the merits of the antitrust lawsuit - Judge rejected PSE's position there too finding that the claim wasn't even ripe to be heard since the NHL had not even acted on their rules yet. Plus, Judge held that under the applicable 9th Circuit caselaw there was no per se violation of te antitrust laws due to the leagues relocation rules. Instead the matter, (if even pursued by PSE or Moyes) would obviously involve a factual dispute - to be resolved after significant discovery and a trial (i.e. delay).
7. A rushed timeline forcing a relocation of a team in a matter of 6 weeks can't be done.

Depsite acting like he's Sandy Koufax at these "press conferences," Rodier's throwing a lot more balls than strikes.


Last edited by Jake16: 06-17-2009 at 02:54 AM.
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06-17-2009, 06:12 AM
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No, it's not over.

JB's bid is still the only one out there. As judge Baum has pointed out, all others are speculation, nothing concrete. One of the parties interested in purchasing the Coyotes is the group that owns the Toronto Argonauts of the CFL. These are people that would have trouble affording a pair of seasons tickets to the Coyotes, even at those insanely low prices.

It was reported in today's Toronto SUN that Argonaut owners Cynamon and Sokolowski were loaned money by David Braley (owner of the BC Lions) in order to cover the $2M price tag when they purchased the team.

Braley has also loaned them money to help cover the Argo's annual operating costs.

http://www.torontosun.com/sports/foo...22386-sun.html

These are people that Bettman and Daly actually introduced in bankruptcy court as potential owners of the Coyotes? How could these guys come up with a bid to satisfy the creditors? They can't afford $2M to buy the Toronto Argonauts. How are they going to get two hundred million to buy the Coyotes? Can't you just see them covering the $30-35M in yearly losses?

Too funny!

To even mention those guys as potential owners smacks of desperation. Bettman and Daly made complete ***** of themselves.


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06-17-2009, 07:41 AM
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Heard on the Fan 590 that the NHL will soon present a "firm" offer from the Reisdorf group. This should be good.

I don't get the reasoning that a lot of people here seem to think there will be an auction / sale process set up ONLY for people who want to keep the team in Phoenix. No one with any authority has actually stated this will happen, it's only the NHL's dream scenario, since it would allow them to ignore JB and any other potential buyer that wants to move the team to Hamilton / Toronto / Quebec / Kalamazoo. The court would be foolish and irresponsible to only consider those offers that keep the team in Phoenix. More offers means a better chance of maximizing returs to creditors.

JB will certainly make another offer so it's far from over. He's not gonna run away just because his timeline got pushed back. He's been approved as an owner in the eyes of the court. The judge is strongly recommending mediation between JB and the NHL. If the NHL ever makes a decision on Hamilton (seems they will have to at some point) that opens the door for all the anti-trust hoopla. In the interim JB can make noise about Tampa or any other sad sack franchise.

Anyone who thinks that Monday's ruling spells the end for JB as an owner, or keeps the Coyotes in Phoenix for the long term is kidding themselves.

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06-17-2009, 07:48 AM
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Heard on the Fan 590 that the NHL will soon present a "firm" offer from the Reisdorf group. This should be good
Yup, I too am looking forward to the "firm" offer probably worth 100M$ less than Balsillie's at the end of the day... AND then look forward to finding out 2-3 years from now that the league office, with some other NHL owner(s) in love with the commish, helped foot half the bill.

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06-17-2009, 07:52 AM
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And finally, regardless of what "side" you're on here (Hamilton v. Phoenix; Bettman v. Balsilie; rules count v. we just want and we deserve; the Leafs' and Sabres have rights v. no they don't), haven't you guys, at least now, figured out that Rodier is not the best legal strategist in the world. He's more of a blowhard: alot of talk; alot of ego; little substance. While the judge punted on some issues to be decided at a later time, he flately rejected some pretty major issues from's Rodier's blueprint for structuring this deal:
Although I would be the first to point out that Rodier does not seem to be the best legal mind that money could buy, you're going on the assumption that the details of the bid (no relocation fees, anit-trust stuff, etc) was JB's final position, and that all these "losses" in court actually are a deathblow to his attempt to buy an NHL team. I don't believe this is the case at all. I don't think JB actually thought that his offer would be rammed through exactly as outlined in the bid, or even that he would ultimately be successful.

I think the main reason for JB's actions were to force the NHL to deal with him and with the idea of putting a team in Hamilton. If it cost more than $212 million to do so, by paying territorial and infringement fees, then so be it, as long as they were reasonable. If by some miracle JB got his bid accepted as-is, then great, even better.

Whatever happens here, I think a team in Hamilton is a lot closer now than it was two months ago.

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06-17-2009, 08:01 AM
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There is going to be two auctions, the first one for those who are commited to staying in Phoenix and those who are not. The first auction will determine if the second is needed. I want the league to expand two more teams and as I have been saying, Balls needs to make an ownership commitee of outstanding citizens to get an expansion team. Will he pay through the nose? Yup, but he will get his team.

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06-17-2009, 08:05 AM
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Um, if i got it right all the judge decided was that there has to be a relocation fee and that the timetable of Balsillie can not be solved... Or have I missed something?

Plus JB's offer still stands and he will continue on fighting for NHL hockey in Hamilton...

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06-17-2009, 08:05 AM
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, Balls needs to make an ownership commitee of outstanding citizens to get an expansion team.
What Balls needs to do is start his own league with a bunch of his multi-millionaire friends and stick it to the NHL.

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06-17-2009, 08:08 AM
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There is going to be two auctions, the first one for those who are commited to staying in Phoenix and those who are not. The first auction will determine if the second is needed.
You are completely wrong, as are many other in this thread who assume the above is correct. The idea of two auctions is simply that, an idea. The judge, who's in charge of this whole mess, has not agreed to go with the dual auction idea, it has only been proposed by the NHL.

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06-17-2009, 08:13 AM
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Here are the season ticket prices for the vast majority of the seats available (see the link below, where they advertise much higher prices for the first two rows and a few select club seats -- why anyone would assume sitting in the first two rows is better than sitting in the tenth row on the blue line of the 2 period offensive zone for the home team is beyond me, but I digress...).

For the 98% or whatever of tickets available:

Lower bowl:
Red Club (centre ice btw blue lines): $80 per game
Lower level (from blue line to goal line): $60 per game
Lower level (tickets behind goal line): $40 per game

Upper bowl:
Upper level centre (btw blue lines): $20 per game
Upper level sides and ends (most of the upper bowl tickets): $15 per game
Upper level ends last 4 rows: $9 per game

Link:

http://coyotes.nhl.com/tickets/season_tickets.htm

The hockey fans in Phoenix have a pretty sweet deal, especially since only 10,900 fans actually showed up for each game on average last year. With about 7,000 empty seats on average per game you'd suspect they could get a cheap season ticket package, as low as $9 or $15 a game, and move to a better location. And the best part, all of that comes with free parking!

You won't find ticket prices anywhere near that cheap for any of the Canadian teams or any of the teams in more established US markets.

GHOST
Those prices are crazy. If they can't get more than 11,000 arses in the seats with prices like that, they don't deserve an NHL team. $9 wouldn't even cover the sales tax on a ticket in most Canadian arenas.

Nine dollars! Free parking! And they still can't sell them!

Anyone Coyotes fan gullible enough to think Bettman and co. are trying to save hockey in Phoenix probably bought oceanfront property in Arizona too.

Bettman wants to move your team to KC. Or maybe Vegas.

Face facts...it's over.

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06-17-2009, 08:29 AM
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Quote:
Originally Posted by GHOSTofMAROONSroad View Post
It's not over, until it's over -- i.e., Jim is still able to write a big cheque for an insolvent franchise that will satisfy all of the secured creditors with some money left over for the unsecured creditors. Jim can also write a few other big cheques to resolve some of the other issues.
So, I guess the "Star Trek: Wrath of Khan" reference was too subtle?

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06-17-2009, 08:39 AM
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http://twitter.com/brahmresnik/statuses/2200501363
"NHL will be very careful releasing offer(s). League, city favor Reinsdorf. Others might step in. None will come close to JB."

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06-17-2009, 08:46 AM
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Although I would be the first to point out that Rodier does not seem to be the best legal mind that money could buy, you're going on the assumption that the details of the bid (no relocation fees, anit-trust stuff, etc) was JB's final position, and that all these "losses" in court actually are a deathblow to his attempt to buy an NHL team. I don't believe this is the case at all. I don't think JB actually thought that his offer would be rammed through exactly as outlined in the bid, or even that he would ultimately be successful.

I think the main reason for JB's actions were to force the NHL to deal with him and with the idea of putting a team in Hamilton. If it cost more than $212 million to do so, by paying territorial and infringement fees, then so be it, as long as they were reasonable. If by some miracle JB got his bid accepted as-is, then great, even better.

Whatever happens here, I think a team in Hamilton is a lot closer now than it was two months ago.

All I'm going on is the contract he signed with Moyes and the motion papers filed with the court demanding those terms. I guess if he was bluffing no-one bothered to tell the judge. Even now, his "emergency" timeline forcing all these issues on the court or on threat that he would walk seems like a hoax.

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06-17-2009, 08:48 AM
  #22
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Originally Posted by gc2005 View Post
You are completely wrong, as are many other in this thread who assume the above is correct. The idea of two auctions is simply that, an idea. The judge, who's in charge of this whole mess, has not agreed to go with the dual auction idea, it has only been proposed by the NHL.
I would say that you're right, that there's definitely no certainty that there will be a second auction. But, as I asked near the end of the last thread, what do you, and everyone else, believe are the necessary results of a first auction in order that the court will be satisfied and not call for a second auction? And, will the potential of what a second auction could offer in comparison to the first have any influence on the courts decision, assuming that a second auction could present much better results for the creditors?

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06-17-2009, 08:49 AM
  #23
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http://slam.canoe.ca/Slam/Hockey/NHL...24841-sun.html
Quote:
The bottom line, reiterated Rodier, is that Balsillie is the only person or group to submit a concrete offer for the team and that, eventually, the creditors, the NHL and its owners will reach the conclusion that the best move is to sell to Balsillie, who has offered $212.5 million US for the franchise. Basically, the "money talks" argument.

"To defy the laws of economics is like defying the laws of gravity. It can't be done," Rodier said.
...
Said NHL deputy commissioner Bill Daly: "We believe mediation of any relocation issue is entirely premature."

Even if the sale was finalized in September, Rodier said that doesn't rule out relocation before next season.

"Look at the Seattle Pilots' case where a judge, five days before a season started, said this team can relocate, and five days later they started the baseball season," Rodier said. "In each case, you have to move some equipment, and off you go."
Rodier -- get off the Pilots' precedence. Baum didn't like the reference and with TV contracts and travel plans set well in advance, There will be at least 14 teams and the league who would seek an injunction to prevent such a move.

And even if you hire 2-3 moving crews (just to un/pack) and 2-3 sets of drivers for each truck (so no stopping except for fuel), I don't see how you can even move *cross-continent* and cross-border in a week. (Imagine the hassle at the border trying to get the moving trucks through customs.)


Edit: Yeah, right... Auction 9/10. Training Camp starts circa 9/12 (for vets; rookies are usually there a week before that). No *way* a move can happen in two days.

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06-17-2009, 08:52 AM
  #24
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Overall Judge Baum's decision is pretty much as should have been expected. Judge refused to overturn NHL constitution and allow Balsillie to cherry pick favorable clauses from contracts. But at the same time the situation remains unresolved because there are no offers for Judge to decide on.

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Originally Posted by no13matssundin View Post
Yup, I too am looking forward to the "firm" offer probably worth 100M$ less than Balsillie's at the end of the day... AND then look forward to finding out 2-3 years from now that the league office, with some other NHL owner(s) in love with the commish, helped foot half the bill.
Depending on the value Judge Baum will give to City of Glendale's claim of damages, it is very plausible that Balsille would need to pay at least 200-300 million dollars more than bidder seeking to keep the team in Glendale in order to have the best bid. As a matter of fact, if Judge upholds Glendale's entirle claim of damages (500 million) [unlikely] and relocation fee is set to 200 million [plausible], Balsillie would need to overbid local bidders by 500-700 million dollars in order to get the team.

And this is in case Judge decides to hold single auction for bidders in Glendale as well as bidders that have applied for relocation (I would conisder such course of action reasonable, as it would most likely give best result for creditors). Balsillie can win it by writing a cheque, but it is up to Judge Baum (and Glendal's claim for damages) to determine how big a cheque would be needed.

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06-17-2009, 09:01 AM
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LadyStanley
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http://www.thestar.com/article/651850
Quote:
The billionaire, however, chose not to show up for a news conference called on his behalf yesterday, letting others do his speaking for him when it comes to his continued pursuit of the Phoenix Coyotes.

"His commitment remains completely unchanged," said Balsillie spokesman Bill Walker, noting his boss was busy with work as co-founder of Research in Motion on the day after a judge rejected his $212.5 million (U.S.) offer to buy and relocate the team. "He's committed to Hamilton, he's committed to Copps Coliseum.
Guess those comments/concerns about Balsillie paying too much attention to the hockey acquisition to the neglect of his "day job" must have hit home.

Quote:
But the judge laid out a series of hurdles that Balsillie must overcome. First, the judge said there is nothing in antitrust law that says the bankruptcy court has the power to move the team against the wishes of the league.

And the judge also suggested that contracts the Coyotes have with the City of Glendale and the company that runs the concessions may not be broken, forcing the Coyotes to remain at the Jobing.com arena.
...
Rodier said the Balsillie camp would welcome direct negotiations with the league, especially on a relocation fee, but no talks are set. Rodier believes a fair offer on relocation is the difference between the value of a team in Hamilton minus the value of a team in Phoenix.

At one point yesterday, however, Rodier said the team in Phoenix was worthless because nobody is willing to buy it and keep it there.

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