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Part X: Phoenix Coyotes - Between Scylla and Charybdis

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08-07-2010, 06:31 PM
  #701
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The Glendale mayor and politicians have a responsibility to the citizens of Glendale, and an interest in their own jobs. I think it would be perilous for them to go back on their word on this. What it means is that I think they need to get a deal done by August of September.

I am not sure what they will do if they are not able to find a buyer to keep the team in Glendale and assume the losses this year. It would be interesting to see how they would react if TNSE stepped in an offered an extra $25 million to "ease their pain".
I remember reading somewhere that one of the Glendale city councilors is now saying that they were "bullied" into this arrangement by the NHL. If that is true, they're already trying to do damage control.

I don't think it is realistic to think that TNSE will pony up 25 million, they do not throw money around like a certain Jim guy does. I thimk a deal is already in place with TNSE and if COG can't find a buyer then come December 31st, the Coyotes are a lame duck franchise...

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08-07-2010, 06:40 PM
  #702
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Ya, that was a well written article by Munson that was discussed here at length some months back. It still takes your breath away looking through the rearview.
hehe

nice one

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08-07-2010, 06:53 PM
  #703
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I remember reading somewhere that one of the Glendale city councilors is now saying that they were "bullied" into this arrangement by the NHL. If that is true, they're already trying to do damage control.

I don't think it is realistic to think that TNSE will pony up 25 million, they do not throw money around like a certain Jim guy does. I thimk a deal is already in place with TNSE and if COG can't find a buyer then come December 31st, the Coyotes are a lame duck franchise...
If this is true, and this all falls apart "officially", it's going to make a massive trainwreck you won't be able to avert your eyes from if/when it comes down. Wouldn't be surprised afterwards to see lawsuits thrown around by IEH, NHL, CoG, hell maybe even JR will get in the action and toss something in there.

I'd love to see one of those hockey cartoonists draw something along the lines of a Coyote waiting on the bench to get on the ice, while Characters of Bettman, Jones, and Cog Representative dukeing out on the ice.

I am STILL waiting for whether Aug 6 really was any particular day of significance no one officially has said boo about it-..though prolly not till Monday.

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08-07-2010, 07:03 PM
  #704
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I remember reading somewhere that one of the Glendale city councilors is now saying that they were "bullied" into this arrangement by the NHL. If that is true, they're already trying to do damage control.

I don't think it is realistic to think that TNSE will pony up 25 million, they do not throw money around like a certain Jim guy does. I thimk a deal is already in place with TNSE and if COG can't find a buyer then come December 31st, the Coyotes are a lame duck franchise...

Glendale will buy the team before that happens. This has nothing to do with hockey, but Luke AFB has all but ben granted the F 35 contract. That means billions and billions in revenue for Glendale. What would 150 million mean? It's like buying a big mac. Would the NHL approve a city as an owner, yes cause they know they would have the money and would save face. Glendale can sell the team or whatever. It cannot be understated what that contract means in $$$$$ revenue.

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08-07-2010, 07:14 PM
  #705
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As this gets closer to the deadline, I'm sure COG gets more nervous.

How far do you think the COG will go to secure the yotes? What is the most they will give up to keep the team?
I am a bit puzzled by the question "how far will Glendale go" to secure the Coyotes. They actually have limited financial options, when the issues are all financial. They can't just give the team money, or undue monetary concessions. So the best they can do is give them control over revenues at the Jobing.com arena and the area around it, and hope that other businesses in the area don't mind subsidizing the operation of the Coyotes through their own businesses. At the end of the day, I think this will rest more on the Westgate businesses and their ability and appetite to line Reinsdorf's pockets with the long-term hope that the team will become profitable and not require the CFD revenues from their patrons. Not having any control over Reinsdorf's longer term options and plans for the team must be disconcerting for them, and ironic for someone like Ellman who used to own the team.

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08-07-2010, 07:18 PM
  #706
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Glendale will buy the team before that happens. This has nothing to do with hockey, but Luke AFB has all but ben granted the F 35 contract. That means billions and billions in revenue for Glendale. What would 150 million mean? It's like buying a big mac. Would the NHL approve a city as an owner, yes cause they know they would have the money and would save face. Glendale can sell the team or whatever. It cannot be understated what that contract means in $$$$$ revenue.
I think it is fantasy to think that the City of Glendale ever could or would own the team....

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08-07-2010, 07:30 PM
  #707
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I think it is fantasy to think that the City of Glendale ever could or would own the team....

Why would you think that fantasy? They have millions already invested and by them putting up 25 mil more of their own $$$, they stand to loose the most. I'm not saying they would own the team for years, but it's not a stretch. This is a unique situation and as we have learned, anything in this case is possible.

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08-07-2010, 08:01 PM
  #708
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What would 150 million mean? It's like buying a big Mac.
That argument cuts the other way just as sharply.

 
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08-07-2010, 08:14 PM
  #709
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Glendale will buy the team before that happens. This has nothing to do with hockey, but Luke AFB has all but ben granted the F 35 contract. That means billions and billions in revenue for Glendale. What would 150 million mean? It's like buying a big mac. Would the NHL approve a city as an owner, yes cause they know they would have the money and would save face. Glendale can sell the team or whatever. It cannot be understated what that contract means in $$$$$ revenue.

Can you explain how this would translate to revenues for Glendale? I suppose the R&D, and manufacturing would happen somewhere else. Maintenance and training personnel? New runways??

 
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08-07-2010, 08:14 PM
  #710
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That argument cuts the other way just as sharply.

Yes, thats completely understood. I really do think that after last years run, there is NO WAY Glendale just lets the team go. I hope you Canadians get the team you want, but this team will be here in AZ.

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08-07-2010, 08:58 PM
  #711
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I think it is fantasy to think that the City of Glendale ever could or would own the team....
Its not without precedent nor outside of the realm of possibilities Whilee. Bay Area municipalities (among others) are seriously exploring this option, as they too are being held hostage by their teams (though in this case for new facilities). Beyond the Green Bay Packers, their are 5 or 6 community owned teams in minor league baseball & one in hockey, the Rochester Red Wings.

In a book entitled "Field of Schemes; How the Great Stadium Swindle turned Public Money into Private Profit", the authors advocate for the "Municipalization" of the franchises themselves, as its rarely the arena/stadium that makes the decent money but the team itself. Though its unlikely the Coyotes would be turning a profit for at least 5-8yrs, if run as a not for profit, held in a Municipally Owned Enterprises' Trust, profits derived down the road can be funneled into general revenues to pay for roads, sewers etc. As the city itself owned the team, it could impose things through the CFD that it couldnt at the behest of an IE/JR 3rd party private owner, returning the power to the taxpayers & fans who have so much invested.

I think we'll see a lot more of this actually happening in the future, and had I been advising Glendale, it'd already be done. And no, Im not a "Socialist". LOL...


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08-07-2010, 09:05 PM
  #712
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Its not without precedent nor outside of the realm of possibilities Whilee. Bay Area municipalities (among others) are seriously exploring this option, as they too are being held hostage by their teams (though in this case for new facilities). Beyond the Green Bay Packers, their are 5 or 6 community owned teams in minor league baseball & one in hockey, the Rochester Red Wings.

In a book entitled "Field of Schemes; How the Great Stadium Swindle turned Public Money into Private Profit", the authors advocate for the "Municipalization" of the franchises themselves, as its rarely the arena/stadium that makes the decent money but the team itself. Though its unlikely the Coyotes would be turning a profit for at least 5-8yrs, if run as a not for profit, held in a Municipally Owned Enterprises' Trust, profits derived down the road can be funneled into general revenues to pay for roads, sewers etc. As the city itself owned the team, it could impose things through the CFD that it couldnt at the behest of an IE/JR 3rd party private owner, returning the power to the taxpayers & fans who have so much invested.

I think we'll see a lot more of this actually happening in the future, and had I been advising Glendale, it'd already be done.
I might be wrong, but I doubt that the BOG would like to have a partner that represented politicians. Publicly owned (a la Packers) is different from municipally-owned. Municipalities tend not to like the risks involved in this sort of enterprise, especially one that is as small as Glendale (pop. 250k?). A couple of bad years with losses of $20-25 million would put a huge burden on the municipality. As it is, they are going to have to rope in a bunch of businesses through a CFD to subsidize the team. Imagine the conflict of interest inherent in doing that if the city owned the team. It might look feasible on paper, but I just don't see it happening. If it was going to happen, I expect it would have been floated by now.

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08-07-2010, 09:06 PM
  #713
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I am a bit puzzled by the question "how far will Glendale go" to secure the Coyotes. They actually have limited financial options, when the issues are all financial. They can't just give the team money, or undue monetary concessions. So the best they can do is give them control over revenues at the Jobing.com arena and the area around it, and hope that other businesses in the area don't mind subsidizing the operation of the Coyotes through their own businesses. At the end of the day, I think this will rest more on the Westgate businesses and their ability and appetite to line Reinsdorf's pockets with the long-term hope that the team will become profitable and not require the CFD revenues from their patrons. Not having any control over Reinsdorf's longer term options and plans for the team must be disconcerting for them, and ironic for someone like Ellman who used to own the team.
I don't see how this deal lines Reinsdorf's pockets. It certainly takes the risk out of it for him. But the only way his pockets get lined is if the team makes money, no? Something that most here say is impossible.

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08-07-2010, 09:10 PM
  #714
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Why would you think that fantasy? They have millions already invested and by them putting up 25 mil more of their own $$$, they stand to loose the most. I'm not saying they would own the team for years, but it's not a stretch. This is a unique situation and as we have learned, anything in this case is possible.
As desperate as the situation is, I think it is a real stretch to say that "anything in this case is possible". There are a bunch of bottom lines that have already been drawn here, including:

- City of Glendale refusing to guarantee the bank loan for IEH.
- City of Glendale insisting that they will not pay any of the $25 million, but instead force the new owners to do so.
- NHL keeping firm on the purchase price.
- Glendale insisting on having the new owners continue to pay the city to pay off the arena.

Any flexibility on any of these would have facilitated a deal. The fact that a deal has not yet been struck at this very late date suggests to me that there are some fairly hard limits in reality to what each of the parties can or will do to ensure the team stays in Glendale.

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08-07-2010, 09:23 PM
  #715
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Its not without precedent nor outside of the realm of possibilities Whilee. Bay Area municipalities (among others) are seriously exploring this option, as they too are being held hostage by their teams (though in this case for new facilities). Beyond the Green Bay Packers, their are 5 or 6 community owned teams in minor league baseball & one in hockey, the Rochester Red Wings.

In a book entitled "Field of Schemes; How the Great Stadium Swindle turned Public Money into Private Profit", the authors advocate for the "Municipalization" of the franchises themselves, as its rarely the arena/stadium that makes the decent money but the team itself. Though its unlikely the Coyotes would be turning a profit for at least 5-8yrs, if run as a not for profit, held in a Municipally Owned Enterprises' Trust, profits derived down the road can be funneled into general revenues to pay for roads, sewers etc. As the city itself owned the team, it could impose things through the CFD that it couldnt at the behest of an IE/JR 3rd party private owner, returning the power to the taxpayers & fans who have so much invested.

I think we'll see a lot more of this actually happening in the future, and had I been advising Glendale, it'd already be done. And no, Im not a "Socialist". LOL...
I can just see GI with that one......


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I might be wrong, but I doubt that the BOG would like to have a partner that represented politicians. Publicly owned (a la Packers) is different from municipally-owned. Municipalities tend not to like the risks involved in this sort of enterprise, especially one that is as small as Glendale (pop. 250k?). A couple of bad years with losses of $20-25 million would put a huge burden on the municipality. As it is, they are going to have to rope in a bunch of businesses through a CFD to subsidize the team. Imagine the conflict of interest inherent in doing that if the city owned the team. It might look feasible on paper, but I just don't see it happening. If it was going to happen, I expect it would have been floated by now.
The packers are owned by the city of green bay. They sold shares but they do not mean anything.


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Why would you think that fantasy? They have millions already invested and by them putting up 25 mil more of their own $$$, they stand to loose the most. I'm not saying they would own the team for years, but it's not a stretch. This is a unique situation and as we have learned, anything in this case is possible.
AZ state laws prohibit subsidies, this would be the biggest subsidy of all.

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08-07-2010, 09:34 PM
  #716
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In a book entitled "Field of Schemes; How the Great Stadium Swindle turned Public Money into Private Profit", the authors advocate for the "Municipalization" of the franchises themselves, as its rarely the arena/stadium that makes the decent money but the team itself. Though its unlikely the Coyotes would be turning a profit for at least 5-8yrs, if run as a not for profit, held in a Municipally Owned Enterprises' Trust, profits derived down the road can be funneled into general revenues to pay for roads, sewers etc. As the city itself owned the team, it could impose things through the CFD that it couldnt at the behest of an IE/JR 3rd party private owner, returning the power to the taxpayers & fans who have so much invested.

I think we'll see a lot more of this actually happening in the future, and had I been advising Glendale, it'd already be done. And no, Im not a "Socialist". LOL...
We're all socialists of various ilks, Killion, just that some choose to live in denial about it. However, I digress...

When I first heard about Reinsdorf's offer, I remember stating somewhat off-the-cuff that if Glendale was going to fork over that kind of money, they'd be better off buying the team. At least if there ever were a profit to be made, they'd benefit from that as well.


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I might be wrong, but I doubt that the BOG would like to have a partner that represented politicians. Publicly owned (a la Packers) is different from municipally-owned. Municipalities tend not to like the risks involved in this sort of enterprise, especially one that is as small as Glendale (pop. 250k?). A couple of bad years with losses of $20-25 million would put a huge burden on the municipality. As it is, they are going to have to rope in a bunch of businesses through a CFD to subsidize the team. Imagine the conflict of interest inherent in doing that if the city owned the team. It might look feasible on paper, but I just don't see it happening. If it was going to happen, I expect it would have been floated by now.

I agree that it's perhaps the NHL that would be the bigger obstacle than it being in Glendale's interest to buy the team outright. The NHL turned down the group involved with the Panthers and their public stock offer scheme. If I recall, the reason given was that they wouldn't really have control over the ownership-- even if there were a designated owner rep. The sands could easily shift with personal fortunes and interests in new investments. Just as the mood shifts in the investment market, so too would it in the political spectrum (although this one has two poles and not much betwixt and between).

 
Old
08-07-2010, 09:35 PM
  #717
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I think it is fantasy to think that the City of Glendale ever could or would own the team....
I've always been under the impression that there was something in the NHL's By-Laws or constitution that specifically prohibited public ownership of franchises.

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08-07-2010, 09:36 PM
  #718
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I think it is fantasy to think that the City of Glendale ever could or would own the team....
I agree.. Of historical note: One of the last ideas floated around to keep the Jets in Winnipeg was to have the City of Winnipeg or the Province of Manitoba ( gov'ts in otherwords ) own the team. At the time this was given a resounding NO. Not just by taxpayers, but by the NHL. They are not comfortable with gov'ts owning the teams. Buildings fine, but not the teams.

Now the NHL can do whatever they want, but their own constitution says:

3.2 Eligibility. Any person, firm, association or corporation that meets the criteria for membership set from time to time by the Board of Governers may be eligible for membership.

One reason the NHL doesn't like gov't owned teams is because they are elected and serve term positions. It would be like selling the team and having a new ownership group every few years.

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08-07-2010, 09:37 PM
  #719
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AZ state laws prohibit subsidies, this would be the biggest subsidy of all.
Actually, this would likely be just fine under the AZ Gift Clause.

They are not subsidizing a private business - they are purchasing one.

As long as what they are paying is justifiable, they are receiving consideration (ownership of an NHL Franchise) that is commensurate with their payment.

Now, the NHL By-Laws on the other hand ...

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08-07-2010, 09:37 PM
  #720
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I can just see GI with that one......
No, GI doesn't want public money going to someone else, to line a private individual's pocket. If the city were to buy something (or pay for an arena), they would be the owners and operating something they own.

Edit: I would have kdb beat if I hadn't been so long-winded in the post above. Pffffft.

 
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08-07-2010, 09:38 PM
  #721
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I might be wrong, but I doubt that the BOG would like to have a partner that represented politicians. Publicly owned (a la Packers) is different from municipally-owned. Municipalities tend not to like the risks involved in this sort of enterprise, especially one that is as small as Glendale (pop. 250k?). A couple of bad years with losses of $20-25 million would put a huge burden on the municipality. As it is, they are going to have to rope in a bunch of businesses through a CFD to subsidize the team. Imagine the conflict of interest inherent in doing that if the city owned the team. It might look feasible on paper, but I just don't see it happening. If it was going to happen, I expect it would have been floated by now.
If set-up as a hands-off entity like the CFD with a Board of Directors, their would be little difference between the structure of a Municipally Owned Enterprise & as an example, the Ontario Teachers Pension Fund in relation to the Leafs & the NHL. This would ameliorate your suggestions of conflict of interest. Secondly, the "risk" is that Glendale will be without an anchor tenant, the city on the hook to pay down the bonds on its own for the next 1/4 century. Going this route would negate the vagaries of ownership, though like you, I doubt very much if any thought has been given to its feasibility. As for the NHL "not liking it"?. Very dangerous to reject Glendale as an owner. Serious ramifications. It would empower municipalities in all sports to take back ownership of its buildings & mitigate future hardballing tactics by ownership groups.

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08-07-2010, 09:44 PM
  #722
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The COG is never going to purchase the team nor would the NHL allow it. Time to talk about something remotely realistic?

GHOST

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08-07-2010, 09:46 PM
  #723
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I don't see how this deal lines Reinsdorf's pockets. It certainly takes the risk out of it for him. But the only way his pockets get lined is if the team makes money, no? Something that most here say is impossible.

Well, he'd be the sole beneficiary of increases, while the city would have put up ~40% of the money for his purchase and covered what would most likely be the majority of any losses ($100m over 5 yrs). They wouldn't have much to say about how the team would be run/managed, and JR would be 100% the owner.

One area where I'm not clear on, regarding the JR bid, was that he'd get at least the first $104m of any proceeds from a sale of the team. What if there was more than that?

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The COG is never going to purchase the team nor would the NHL allow it. Time to talk about something remotely realistic?

GHOST

GHOST, relax. It's Saturday in August and we're in a hockey forum. What else are we going to talk about? Heck, it's not like the GM's are signing players or making trades, like the good ol' days.

 
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08-07-2010, 09:46 PM
  #724
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If set-up as a hands-off entity like the CFD with a Board of Directors, their would be little difference between the structure of a Municipally Owned Enterprise & as an example, the Ontario Teachers Pension Fund in relation to the Leafs & the NHL. This would ameliorate your suggestions of conflict of interest. Secondly, the "risk" is that Glendale will be without an anchor tenant, the city on the hook to pay down the bonds on its own for the next 1/4 century. Going this route would negate the vagaries of ownership, though like you, I doubt very much if any thought has been given to its feasibility. As for the NHL "not liking it"?. Very dangerous to reject Glendale as an owner. Serious ramifications. It would empower municipalities in all sports to take back ownership of its buildings & mitigate future hardballing tactics by ownership groups.
Judging from what kdb implied a few posts above (perhaps kdb could enlighten us as to the bylaws?), this isn't "dangerous to reject", this would amount to possibly breaking rules. Now some may say "well, rules are made to be broken, they're the NHL, ect", but what you do by doing that is set precident, and you break some by laws for Phoenix, where does it stop? Because I'm willing to wager dollars to donuts that if laws start being broken "for the better good", in Phoenix, how long until someone attempts to place a franchise in Hamilton and in response to By Laws about territorial rights "Hah. You broke them for Phoenix, you can break them for me."

That's a damnably slippery slope IMO.

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08-07-2010, 09:52 PM
  #725
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If set-up as a hands-off entity like the CFD with a Board of Directors, their would be little difference between the structure of a Municipally Owned Enterprise & as an example, the Ontario Teachers Pension Fund in relation to the Leafs & the NHL. This would ameliorate your suggestions of conflict of interest. Secondly, the "risk" is that Glendale will be without an anchor tenant, the city on the hook to pay down the bonds on its own for the next 1/4 century. Going this route would negate the vagaries of ownership, though like you, I doubt very much if any thought has been given to its feasibility. As for the NHL "not liking it"?. Very dangerous to reject Glendale as an owner. Serious ramifications. It would empower municipalities in all sports to take back ownership of its buildings & mitigate future hardballing tactics by ownership groups.
Judging from what kdb implied a few posts above (perhaps kdb could enlighten us as to the bylaws?), this isn't "dangerous to reject", this would amount to possibly breaking rules. Now some may say "well, rules are made to be broken, they're the NHL, ect", but what you do by doing that is set precident, and you break some by laws for Phoenix, where does it stop? Because I'm willing to wager dollars to donuts that if laws start being broken "for the better good", in Phoenix, how long until someone attempts to place a franchise in Hamilton and in response to By Laws about territorial rights "Hah. You broke them for Phoenix, you can break them for me."

That's a damnably slippery slope IMO.
I posted this higher up:

The NHL constitution says:

3.2 Eligibility. Any person, firm, association or corporation that meets the criteria for membership set from time to time by the Board of Governers may be eligible for membership.

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