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The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, NHL revenues, relocation and expansion.

Phoenix bankruptcy/ownership Part XVI: Barbarian at the Gate

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Old
09-02-2009, 08:27 PM
  #251
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Quote:
Originally Posted by billy blaze View Post
won't happen unless agreement between Balsillie and NHL, can't see it, but anything is possible, team is in Phoenix no matter what for next year, it's just who picks up the tab.
Well if the judge delays his rulings until auction and then awards the team to Ice Edge then this may be done without an appeal. I don't think the NHL would appeal given that there likely wouldn't be a ruling against them in that scenario and they have at least publicly supported their bid. I don't see on what grounds JB could appeal as the antitrust issue would be irrelevant, it would be just that the judge decided Ice Edge bid was better.

If you have to ask me who the winner was today it may be Ice Edge. Given the potential litigation surrounding the JB and NHL bids they could be in the drivers seat.

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09-02-2009, 08:32 PM
  #252
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Originally Posted by CGG View Post
The point they try to make is that increasing overall revenues does not help all teams, since it drives up salary cap, etc. The very fact that some people (and possibly by extension, some owners) are actually arguing to have teams in crappy money-losing markets instead of prime revenue-generating markets in order to keep the salary cap down is a prime example of how screwed up this league really is.
Totally valid point, the teams at or near the bottom salary floor don't want it go up because they'll have to spend more just to reach the salary cap floor, ridiculous.
The teams that spend to the top of the salary cap may not mind an increase but that's Toronto and we all know that story.

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09-02-2009, 08:34 PM
  #253
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http://www.theglobeandmail.com/sport...rticle1272820/

I find it very interesting that 'more than a dozen' multi millionaires or billionaires, took a pass on the Coyotes at one point. I had no idea about the Aquilinis.

Also very interesting that it's mentioned that Rodier talks about writing Glendale a cheque to let the team leave, and also talks about inserting the AHL Hamilton Bulldogs as the tenant for Jobing.com to replace the Coyotes.

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09-02-2009, 08:56 PM
  #254
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09-02-2009, 09:18 PM
  #255
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09-02-2009, 09:19 PM
  #256
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Originally Posted by BigMac1212 View Post
http://twitter.com/brahmresnik

Coyotes BK: NHL atty says JB needs to think about getting team, keeping it here and THEN applying for relo.

I would be less angry if Mr. Basille did what the NHL attorney recommends.
I think everyone knows this is BS though, even if he took possession of the team in Phoenix, he'd be stuck there forever, he'll never get approved by the NHL for relo and outside of bankruptcy there's no way he gets out of that Glendale lease without huge bucks, this route is a dead end.

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09-02-2009, 09:30 PM
  #257
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Never got a chance to post it earlier....but interesting thought regarding why the NHL enterred the bidding process and the timing.

The only grounds under which Judge Baum can overrule the NHLs rejection of Balsillie as an owner is if they rule the consent agreement as a de-facto anti-assignment clause (which doesn't apply in bankruptcy). With Reinsdorf dropping out, they were in a position to put in a bona-fide offer without contingencies -- the ONLY one put forth to date.

Because there is at least 1 acceptable bidder with a real offer on the table, that cannot be viewed as an anti-assigment clause....and therefore their ruling with regards to Jim Balsilllie's removal must stand.

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09-02-2009, 09:36 PM
  #258
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Quote:
Originally Posted by Hammertown View Post
http://www.theglobeandmail.com/sport...rticle1272820/

I find it very interesting that 'more than a dozen' multi millionaires or billionaires, took a pass on the Coyotes at one point. I had no idea about the Aquilinis.

Also very interesting that it's mentioned that Rodier talks about writing Glendale a cheque to let the team leave, and also talks about inserting the AHL Hamilton Bulldogs as the tenant for Jobing.com to replace the Coyotes.
Asking price was $200M? And you're surprised?

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09-02-2009, 09:56 PM
  #259
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Quote:
Originally Posted by Wetcoaster View Post
Not quite as broad as you claim.

When the Canadian Competition Bureau examined ownership and relocation policies of the NHL re: the Nashville situation they said this:


If Balsillie can demonstrate that the policies were applied against him " in furtherance of a predatory, exclusionary or disciplinary purpose" then it changes things.

Also note why the alleged Maple Leafs veto is of critical importance - it would vitiate the previous CCB opinion:
Thanks for that. Do you have a link to the entire opinion?

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09-02-2009, 09:57 PM
  #260
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Quote:
Originally Posted by Wetcoaster View Post
Not quite as broad as you claim.

When the Canadian Competition Bureau examined ownership and relocation policies of the NHL re: the Nashville situation they said this:


If Balsillie can demonstrate that the policies were applied against him " in furtherance of a predatory, exclusionary or disciplinary purpose" then it changes things.

Also note why the alleged Maple Leafs veto is of critical importance - it would vitiate the previous CCB opinion:

I could be mistaken, but I believe this case is not in Canada and therefore is subject to US Law. Additionally, all of the parties: NHL, PSE, Ice Edge and Moyes are US entities. You may have forgotten but Balsillie's entity was formed as an LLC in Delaware.

On to precedent. I read through posts here on this topic as well as additional information from a number of sources. I have included comments from these:

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 relcoation and pay relocation fees etc.. Balsilie, through his conduct, has thumbed his middle finger to those rules. I think that under teh fishman v. Wirtz case a 'no' vote would be justifed 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.

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Old
09-02-2009, 10:02 PM
  #261
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Originally Posted by RousselRising View Post
Asking price was $200M? And you're surprised?
Not surprised at all, 200 million was too steep with that lease and to keep the team in Glendale. I did find it interesting that 12 rich groups even bothered to sniff around, not surprised they walked away after what they saw.

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09-02-2009, 10:31 PM
  #262
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There is additional 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.

I believe this is one of the precedents cited in the NHL's response to the PSE filings.


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09-02-2009, 10:35 PM
  #263
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Judge Baum's quote of the day?

Quote:
"The court would be very reluctant - very, very reluctant - to discourage anybody who wanted to make a bid from doing so," Baum said. "There's an awful lot here that the various parties and their attorneys dispute and disagree on. But I don't think anybody disputes that the Coyotes, and the companies affiliated with them that lost a lot of money for a lot of years, have got serious financial problems."
Link:

http://www.nationalpost.com/sports/s...tml?id=1956299

Seems to contradict what Mr. Bettman had previously stated around the time of the All Star game:

Quote:
But Bettman brushed away talk that the Coyotes are in serious trouble.

"There are some issues out there," Bettman said. "They are not, I repeat not, on life support. There are issues we are helping them with."

Bettman said the league had not made any loans to the franchise, that the team's gate receipts and attendance were up over last season and that he was not worried about having to move the Coyotes.
Link:

http://slapshot.blogs.nytimes.com/20...y-to-fight-on/

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09-02-2009, 10:46 PM
  #264
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Originally Posted by leek View Post
I could be mistaken, but I believe this case is not in Canada and therefore is subject to US Law. Additionally, all of the parties: NHL, PSE, Ice Edge and Moyes are US entities. You may have forgotten but Balsillie's entity was formed as an LLC in Delaware.
Neither Nashville or Pittsburgh are in Canada yet the CCB looked at the relocation to Hamilton.
Quote:
As a result of media reports, the Competition Bureau (the "Bureau") commenced an inquiry on June 14, 2007 to determine whether the National Hockey League's ("NHL") policies for the approval of transfers of ownership and relocation of franchises were in violation of the Competition Act (the "Act"). In particular, the inquiry focused upon whether the NHL's policies as applied to the attempted acquisition of the Nashville Predators by Mr. James Balsillie constituted a practice of anti-competitive acts that lessened or prevented competition substantially in a relevant market, contrary to section 79 of the Act.
...
Investigation by the Bureau

The Bureau conducted interviews and obtained relevant records, including emails and letters, from numerous parties, such as prospective purchasers and vendors of NHL franchises, NHL governors and senior NHL officials, for the purpose of examining the policies applied by the NHL and determining the circumstances surrounding the proposed acquisition of the Nashville Predators. In addition, the Bureau considered the circumstances relating to an earlier attempt by Mr. Balsillie to purchase the Pittsburgh Penguins franchise in 2006. The Bureau also consulted the NHL's Constitution, By-Laws and applicable policies in order to gain a greater understanding of the processes applicable to requests for transfers of ownership or relocation of NHL franchises.

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09-02-2009, 10:47 PM
  #265
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So it looks like Baum may just allow the 3 bids to go to auction on the 10th without ruling on anything, therefore he avoids an appeal/stay by the NHL if he rules now on JB being a valid bidder or not. I think it said somewhere today he'd rule on that finally on Sept. 11th.

Could you imagine, he awards JB the franchise on the 10th and then schedules a hearing on the 11th to settle all the unsettled issues. It'll be alot harder for the NHL to get a stay after JB has already been awarded the franchise by the court.

So if JB was awarded the franchise, and of course the NHL appeals, and MLSE files suit to block the move to Hamilton, doesn't JB immediately turn around and file suit based on MLSE's suit and the anti-trust argument he's been arguing all along. Wouldn't MLSE filing suit play right into JB's hands?

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09-02-2009, 10:49 PM
  #266
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Originally Posted by GHOSTofMAROONSroad View Post
Thanks for that. Do you have a link to the entire opinion?

GHOST
Here you are:
http://www.competitionbureau.gc.ca/e...eng/02640.html

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09-02-2009, 10:58 PM
  #267
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Originally Posted by Wetcoaster View Post
Neither Nashville or Pittsburgh are in Canada yet the CCB looked at the relocation to Hamilton.
That may be, but I'm pretty sure the CCB has no standing in Baum J.'s courtroom. This decision belongs to the US Bankruptcy Court, District of AZ. The CCB looked at this in relation to a possible MLSE veto of a move to Hamilton in the failed Nashville sale, which was not in a US Court at all.

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09-02-2009, 11:00 PM
  #268
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Originally Posted by leek View Post
That may be, but I'm pretty sure the CCB has no standing in Baum J.'s courtroom. This decision belongs to the US Bankruptcy Court, District of AZ. The CCB looked at this in relation to a possible MLSE veto of a move to Hamilton in the failed Nashville sale, which was not in a US Court at all.
The evidence that comes out in the court can be tendered to the CCB.

Because the NHL operates in Canada it has to meet Canadian laws as well.

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09-02-2009, 11:00 PM
  #269
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Originally Posted by Hammertown View Post
So it looks like Baum may just allow the 3 bids to go to auction on the 10th without ruling on anything, therefore he avoids an appeal/stay by the NHL if he rules now on JB being a valid bidder or not. I think it said somewhere today he'd rule on that finally on Sept. 11th.

Could you imagine, he awards JB the franchise on the 10th and then schedules a hearing on the 11th to settle all the unsettled issues. It'll be alot harder for the NHL to get a stay after JB has already been awarded the franchise by the court.

So if JB was awarded the franchise, and of course the NHL appeals, and MLSE files suit to block the move to Hamilton, doesn't JB immediately turn around and file suit based on MLSE's suit and the anti-trust argument he's been arguing all along. Wouldn't MLSE filing suit play right into JB's hands?

You can bet the house MLSE will not file a lawsuit against the NHL to block a move.

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09-02-2009, 11:04 PM
  #270
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Originally Posted by Wetcoaster View Post
The evidence that comes out in the court can be tendered to the CCB.

Because the NHL operates in Canada it has to meet Canadian laws as well.
Unless PSE can prove a veto which I sincerely doubt, the CCB will not be involved. US legal precendence is what it is. I can cite additional rulings but in the end, the courts have sided with the right of JVs and even LPs to reject partners for any reason except a violation of the Civil Rights Act of 1964.

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09-02-2009, 11:08 PM
  #271
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Originally Posted by leek View Post
Unless PSE can prove a veto which I sincerely doubt, the CCB will not be involved. US legal precendence is what it is. I can cite additional rulings but in the end, the courts have sided with the right of JVs and even LPs to reject partners for any reason except a violation of the Civil Rights Act of 1964.
That is not necessarily the case based upon what was written in the previous opinion.

The CCB is not bound by US law, they are sovereign.

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09-02-2009, 11:10 PM
  #272
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Originally Posted by leek View Post
That may be, but I'm pretty sure the CCB has no standing in Baum J.'s courtroom. This decision belongs to the US Bankruptcy Court, District of AZ. The CCB looked at this in relation to a possible MLSE veto of a move to Hamilton in the failed Nashville sale, which was not in a US Court at all.
The CCB's ruling doesn't have standing in anybody's court room. If they decide that tehre is something illegal going on, they prosecute such individuals through the court system. For the CCB to have any effect, they would have to decide that the NHL did something wrong that they want to have overruled. They would then go to court and the judge there would hear the CCB and NHL's side of things. The CCB ruled that they didn't have evidence of anything innapropriate going on which would justify filing suit against the NHL.

Its called due process. A government body cannot make law without it passing through teh judiciary or parliament.

In order for them to get involved, Balsillie has to find himself the owner of the coyotes, get denied to relocate (or potentially forced to sell), get the CCB to think that there is something illegal going on, get teh CCB to proseute teh NHL in canadian anti-trust courts, get a court to rule that the NHL doesn't have the power to dictate the location of franchises AND get a court to decide that the leafs veto right is illegal).

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09-02-2009, 11:14 PM
  #273
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Quote:
Originally Posted by leek View Post
Unless PSE can prove a veto which I sincerely doubt, the CCB will not be involved. US legal precendence is what it is. I can cite additional rulings but in the end, the courts have sided with the right of JVs and even LPs to reject partners for any reason except a violation of the Civil Rights Act of 1964.
I wanted to respond to your previous post about the US vs Canadian legal aspects of this case.

The areas of law I would suspect might come into play in this until now US dispute are a) conflict of laws and b) Canadian competition law (relocation/territorial rights).

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09-02-2009, 11:15 PM
  #274
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Originally Posted by jfried View Post
The CCB's ruling doesn't have standing in anybody's court room. If they decide that tehre is something illegal going on, they prosecute such individuals through the court system. For the CCB to have any effect, they would have to decide that the NHL did something wrong that they want to have overruled. They would then go to court and the judge there would hear the CCB and NHL's side of things. The CCB ruled that they didn't have evidence of anything innapropriate going on which would justify filing suit against the NHL.

Its called due process. A government body cannot make law without it passing through teh judiciary or parliament.
The hearing would be before the Canadian Competition Tribunal if the CCB decides to move forward. The CCB investigates complaints and decides whether to proceed with the filing of an application to the Competition Tribunal.

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09-02-2009, 11:15 PM
  #275
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You can bet the house MLSE will not file a lawsuit against the NHL to block a move.
I tend to agree with you, they'll let the NHL do their bidding rather than file suit and give JB the anti trust basis he needs.

Where it gets interesting is if the NHL decides at some point they do want to go into the Hamilton/Southern Ontario market (for the right large price and the right buyer) and they're no longer going to be MLSE's lackey.

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