UPDATE 12/15 - Ottawa owner talks moving Senators: ‘If it becomes a disaster, yes’

mouser

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The Balsillie situation, if I recall, was approval of ownership, not approval of relocation. The league has the absolute right to approve or reject owners and to subject new owners to a set period not to relocate (I believe currently 7 years). Balsillie tried to circumvent the BoG by buying the Coyotes directly from Jerry Moyes out of bankruptcy. That was ultimately overturned and the league took over the Coyotes.

In the US, a team owner absolutely can relocate a team without league approval. The Raiders court decisions make this clear. I don't agree with that necessarily but it is what it is. I am not sure if this is the case in Canada of course since US court decisions don't apply there. However, the league is based out of NYC - if it is considered a US entity, it might be subject to our case law on relocation issues.

So if someone wants to relocate US team X to US city Y outside the 7 year period, there is nothing the league can do about it. Vet potential owners to ensure loyalty to a certain market - it's the best the league can do.

The league probably cannot block an existing owner without a 7 year relo clause from moving. It can however demand a relocation fee for doing so.
 

ottawah

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The Balsillie situation, if I recall, was approval of ownership, not approval of relocation. The league has the absolute right to approve or reject owners and to subject new owners to a set period not to relocate (I believe currently 7 years). Balsillie tried to circumvent the BoG by buying the Coyotes directly from Jerry Moyes out of bankruptcy. That was ultimately overturned and the league took over the Coyotes.

In the US, a team owner absolutely can relocate a team without league approval. The Raiders court decisions make this clear. I don't agree with that necessarily but it is what it is. I am not sure if this is the case in Canada of course since US court decisions don't apply there. However, the league is based out of NYC - if it is considered a US entity, it might be subject to our case law on relocation issues.

So if someone wants to relocate US team X to US city Y outside the 7 year period, there is nothing the league can do about it. Vet potential owners to ensure loyalty to a certain market - it's the best the league can do.

For the NFL it could depend on league bylaws, but Basille tried this with Pittsburgh, Nashville, and Pheonix and was denied in court. The ruling was fully against Baislle on a number of points.

Balsillie ends pursuit of Coyotes

"Baum sided with the NHL on three points — the right to approve membership; the right to control where teams play; and the right to a relocation fee — and, in doing so, avoided setting a legal precedent feared by all major professional sports leagues."


So the judge agreed the NHL decides its owners, where it plays, and relocation fees.

The NHL has all the power here.

Other articles indicated there was a relocation fee set by the league :

"More interesting is that the NHL relied on two consultants' reports to purport that Balsillie should pay as much as $195 million in relocation fees to transfer the Coyotes here."

And that was in 2009. Given whats been a 200% rise in team valuations in the last 10 years, 400M seems much more correct.
 

WingsMJN2965

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Somebody tell this dunce cap that people aren't showing up because you're not willing to retain your star players.

Nobody's going to pay you their hard earned money to watch a team that you deliberately manage into mediocrity.
 
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TheLegend

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The Balsillie situation, if I recall, was approval of ownership, not approval of relocation. The league has the absolute right to approve or reject owners and to subject new owners to a set period not to relocate (I believe currently 7 years). Balsillie tried to circumvent the BoG by buying the Coyotes directly from Jerry Moyes out of bankruptcy. That was ultimately overturned and the league took over the Coyotes.

In the US, a team owner absolutely can relocate a team without league approval. The Raiders court decisions make this clear. I don't agree with that necessarily but it is what it is. I am not sure if this is the case in Canada of course since US court decisions don't apply there. However, the league is based out of NYC - if it is considered a US entity, it might be subject to our case law on relocation issues.

So if someone wants to relocate US team X to US city Y outside the 7 year period, there is nothing the league can do about it. Vet potential owners to ensure loyalty to a certain market - it's the best the league can do.


Correct. The BK court in Arizona did not address the relocation question as the judge in the case did not want to step into that quagmire. It did rule however that the league had a right to determine who it could allow to own a franchise. And since Balsillie was rejected (unanimously) as an owner it made his bid to own the Coyotes moot.
 
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Gil Gunderson

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One thing not being discussed is the relocation fee if Melnyk keeps the team and moves it. How much is it and can't the NHL raise it as a way to stop it from happening? Coyotes' fee was said to be around 150 million a few years ago.

Are we supposed to believe this penny pincher will pay it? For all we know at this point it could cost the same as building the Lebreton arena from his own pocket.

There a lot of barriers if he wants to relocate. It's not as simple as closing shop in Ottawa and opening in QC the next week.

Edit: just saw it above
 
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Bjorn Le

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The NHL has processes in place to prevent, for lack of a better word, "bad" prospective owners from gaining a franchsie. It ought to have similar mechanisms in place to dealer with owners who become unable or unwilling to effectively manage their franchise. Melnyk has no money (or at least, no money he's willing to put into the team), cares more about his properties in Barbados than in Ottawa, publically derides the most important development plan the team has seen since it's inception, and wonders aloud about moving the franchise days after he says he has no interest in selling.

None of this looks good for the league. They need to rid themselves of this cretin once and for all.

Have you been living under rock for the past 25 years Hamilton economy is booming right now with billions of dollars in building permits being issued just in the past 5 years alone not mention the population of the city has ballooned to 767.000 & if you include the rest of the GHA. the population is around 1.4 million do to influx of people moving to Hamilton from Toronto for cheap housing & as for the price tag of an NHL. franchise in Hamilton you are looking at about $550 million - $650 million not a billion

It's not, and you're literally told this in every thread. Hamilton has a weaker economy than other Canadian cities half their size, and is increasingly becoming a bedroom community for the GTA proper. Not to mention "ballooning" is a clearly incorrect word for a city that is growing less than the national average (and has slowed from last census).
 
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cbcwpg

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Balsillie wasn't an owner at the time, that's why they were able to block him. Melnyk is a current owner. This is looking like the same situation as the North Stars to Dallas.

Technically yes, but they can't actually block him I believe.

According to bylaw 36 they can. It requires a majority vote.

http://www.cmaxxsports.com/misc/NHL Constitution.pdf

So as long as the majority don't want the team relocated it can't be... but in that case the owner could just throw the keys on Gary's desk and walk away.
 

ottawa

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He cant afford to stay in the LeBreton redevelopment and is running out of money to run the team-here or anywhere else.
.
A lot of the empty seats in Ottawa are because he is so disliked here.

There are people who want to buy the team but he claims he won't sell because its not easy to buy an NHL franchise and because he is having so much fun!

I wonder what Gary thinks of him coughing up this hairball just before the 100 th anniversary game and on this special weekend for Ottawa hockey.

People don't decide to not go to games because they dislike Melnyk. It's simply because Ottawa isn't a hockey city.

The go-to excuse is that the arena is too far usually. They didn't sell out a couple playoff games too IIRC. Getting rid of Melnyk won't fix this teams lack of fanbase...it sucks but it's just not there, regardless of the owner.
 

Killion

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And since Balsillie was rejected (unanimously) as an owner it made his bid to own the Coyotes moot.

Yep... And Eugene Melnyk one of the loudest voices in the room apparently against approving Balsillie as an owner. Seems even he had a falling out with RimJim at one point.
 

The Lewler

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People don't decide to not go to games because they dislike Melnyk. It's simply because Ottawa isn't a hockey city.

The go-to excuse is that the arena is too far usually. They didn't sell out a couple playoff games too IIRC. Getting rid of Melnyk won't fix this teams lack of fanbase...it sucks but it's just not there, regardless of the owner.

Did you just deny my personhood? I'm so triggered.

I and many other people have definitively stopped buying tickets because of Melnyk.
 

MNNumbers

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According to bylaw 36 they can. It requires a majority vote.

http://www.cmaxxsports.com/misc/NHL Constitution.pdf

So as long as the majority don't want the team relocated it can't be... but in that case the owner could just throw the keys on Gary's desk and walk away.

In which case Melnyk would sue and win. That's the problem.

Exactly right, MM. At least, by US case law that's how it would be.

The interesting thing would be....if he chose to move to QC, would US case law still apply?

I haven't heard any Canadian law experts chime in on this one, although I would love to hear such.
 

Melrose Munch

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HOW, he is 'broke'
He claims to be. He does own the arena, which should put him in the black.
Exactly right, MM. At least, by US case law that's how it would be.

The interesting thing would be....if he chose to move to QC, would US case law still apply?

I haven't heard any Canadian law experts chime in on this one, although I would love to hear such.
Me too.
 

madhi19

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I think the coyotes are not the right example. First he own the arena, second I doubt Eugene own the NHL any money. Third the guy has been around forever, the country club mentality mean he get a majority of yes votes anyway. It's not going to be unanimous because it fair to say the rest of the Canadian owners will probably abstain from voting for marketing reason.

I don't see the league freaking out unless Melnyk get into his head to move somewhere touchy like Hamilton, downtown Toronto, or even downtown Montreal for that matter. By the way I don't see them moving at all, this is the extortion playbook 101.
 

gstommylee

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One issue if someone who already owns the team wants to move them and there is no lease keeping them there, there is nothing the league can do to stop it or face anti-trust lawsuit.
 

Setec Astronomy

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Correct. The BK court in Arizona did not address the relocation question as the judge in the case did not want to step into that quagmire. It did rule however that the league had a right to determine who it could allow to own a franchise. And since Balsillie was rejected (unanimously) as an owner it made his bid to own the Coyotes moot.

Al Davis, almost 40 years ago challenged the right of the rest of the NFL owners to block another team’s relocation under US antitrust law. Nevertheless, if the NHL wanted to do the same thing to block a US team from moving without league approval, the NHL would probably effectively win.

Basically, except for banning horizontal price fixing, US antitrust law is all over the map, but has basically moved to a point where courts will allow restraints on trade so long as they’re not bad for consumers. So the NHL could give a million reasons why it’s bylaws are different from the NFL, and why this situation is different, and you could drag the litigation on for a while until some settlement is reached, and that’s only if some owner, or perhaps a prospective buyer, tried to sue to relocate.
 

MNNumbers

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Al Davis, almost 40 years ago challenged the right of the rest of the NFL owners to block another team’s relocation under US antitrust law. Nevertheless, if the NHL wanted to do the same thing to block a US team from moving without league approval, the NHL would probably effectively win.

Basically, except for banning horizontal price fixing, US antitrust law is all over the map, but has basically moved to a point where courts will allow restraints on trade so long as they’re not bad for consumers. So the NHL could give a million reasons why it’s bylaws are different from the NFL, and why this situation is different, and you could drag the litigation on for a while until some settlement is reached, and that’s only if some owner, or perhaps a prospective buyer, tried to sue to relocate.

I don't think any owner would have to sue to relocate.

He would simply relocate.

The NHL would then tell him he can't.

And, he would say, effectively, 'How can you stop me.....?'

NHL would have to sue.

And, then, how does the league get around the existing US case law in Raiders I & II? It would seem to me, that, in spite of anti-trust law being all over the map, anti-trust law in regard to this matter is very settled.
1- Owners can move (provided they have no active lease requiring them to stay, or can buy out their lease)
2- Leagues can impose relocation fees.

Then, there is the matter of on-the-ground precedent. When Minnesota North Stars moved to Dallas, there was no vote about it, and no relo fee even.

How does the league argue that "now we have the right to vote on that....."

The only legal obstacle I can see to Melnyk (he has no lease, he owns CTC center) moving the team would be if Canadian law applies (even though the NHL is headquartered in NYC). And, I'm pretty sure that Bettman and the BOG don't want to see that go to court.

In the mean time, a simple sale of the team, without selling CTC and/or the rights to develop LeBreton is going to be voted down by the league (they do have that right, by US law). Reason being, if they allowed Melnuyk to sell without selling those rights, then the team COULD be forced out of market, and NHL won't allow that situation.

So, most likely here, you have "He just posturing for a better deal on LeBreton."
Next is, "He is losing money and beginning to be desperate and trying to get the fans to cover his losses."

Then, it would be (in order of likelihood), "He threatens to move the team himself." And, the only likely place is Quebec. In that case, Quebecor, which runs the new arena there, plays its cards very close to the vest and doesn't negotiate AT ALL, because they don't want to be on Bettman's bad side.... So the situation simmers. And, the league pushes for a sale of ALL NHL related assets in Ottawa (CTC + rights to LeBreton). If such a sale can't happen, then the relocation to Quebec happens. And, more than likely, that's followed in a year or tow by a sale to Quebecor.
 

blueandgoldguy

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Why would Melnyk be humming and hawing about the arena and development proposal at Lebreton Flats after his group, the RLG, worked so hard to have it approved by the NCC last year? Now he decides to come out and suggest the team may not be better off with a new arena at the downtown location because much of their season ticket base is in western Ottawa and Kanata? He didn't research this before submitting a proposal for a massive development at Lebreton Flats that would include a new arena? It doesn't add up...

Oh, and these statements seem to contradict those recently made by the commissioner who stated that a new downtown arena was important for the long-term stability of the Senators.

I think Melnyk still wants an arena downtown but is trying to negotiate a better deal with the city to extract more public subsidies...or he is in so much debt that he can no longer afford this downtown development. Remember when this arena proposal originally came out and it was suggested it would be privately funded? Yeah, right!

I doubt Melnyk would move the team to a new location like Quebec City or Houston as he would be a tennant and not privy to all the revenue streams the arena would provide - suites, advertising, naming rights, parking, concerts and other events. He wouldn't be any better off financially. He would have to sell the Sens to one of these outside interests in order for the team to move from Ottawa ... and I don't see that happening, not with the likelihood of ownership groups interested in keeping the team in Ottawa...and likely having the capital available to develop Lebreton Flats.
 
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Setec Astronomy

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I don't think any owner would have to sue to relocate.

He would simply relocate.

The NHL would then tell him he can't.

And, he would say, effectively, 'How can you stop me.....?'

NHL would have to sue.

And, then, how does the league get around the existing US case law in Raiders I & II? It would seem to me, that, in spite of anti-trust law being all over the map, anti-trust law in regard to this matter is very settled.
1- Owners can move (provided they have no active lease requiring them to stay, or can buy out their lease)
2- Leagues can impose relocation fees.

Then, there is the matter of on-the-ground precedent. When Minnesota North Stars moved to Dallas, there was no vote about it, and no relo fee even.

How does the league argue that "now we have the right to vote on that....."

The only legal obstacle I can see to Melnyk (he has no lease, he owns CTC center) moving the team would be if Canadian law applies (even though the NHL is headquartered in NYC). And, I'm pretty sure that Bettman and the BOG don't want to see that go to court.

In the mean time, a simple sale of the team, without selling CTC and/or the rights to develop LeBreton is going to be voted down by the league (they do have that right, by US law). Reason being, if they allowed Melnuyk to sell without selling those rights, then the team COULD be forced out of market, and NHL won't allow that situation.

So, most likely here, you have "He just posturing for a better deal on LeBreton."
Next is, "He is losing money and beginning to be desperate and trying to get the fans to cover his losses."

Then, it would be (in order of likelihood), "He threatens to move the team himself." And, the only likely place is Quebec. In that case, Quebecor, which runs the new arena there, plays its cards very close to the vest and doesn't negotiate AT ALL, because they don't want to be on Bettman's bad side.... So the situation simmers. And, the league pushes for a sale of ALL NHL related assets in Ottawa (CTC + rights to LeBreton). If such a sale can't happen, then the relocation to Quebec happens. And, more than likely, that's followed in a year or tow by a sale to Quebecor.

I can’t speak to how things would work if we were talking about a Canadian team moving or if Canadian law otherwise applies. But if a US based team wanted to do it without league approval, and the NHL were inclined to not want it to happen, I bet the league could get an preliminary injunction until the matter was sorted out by a court, something that would take years. The only thing that might tip the balance in a particular case is if the PA came out on the side of the owner that wanted to move the team, but that’s kind of doubtful.
 

MNNumbers

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I can’t speak to how things would work if we were talking about a Canadian team moving or if Canadian law otherwise applies. But if a US based team wanted to do it without league approval, and the NHL were inclined to not want it to happen, I bet the league could get an preliminary injunction until the matter was sorted out by a court, something that would take years. The only thing that might tip the balance in a particular case is if the PA came out on the side of the owner that wanted to move the team, but that’s kind of doubtful.

Not arguing, especially since my guess is you have a legal background, but I don't see a way around Raiders I & II. Please elaborate....

I rather think that the way the league would operate would be to set such a high relo fee as to make it financially unwise for the owner to move.

(And, all of this is assuming that there are arena options available in the current market). If there are NO arena options available (for example, the possibility of Islanders if they lose Belmont - although NYC is obviously a big fish... or Florida in 8 years, when the current lease (with its subsidy) expires), then the league would be fine with a relo, since the relo happening puts further pressure on all markets with teams to "pony up or we leave....."

Again, my curiosity is piqued here. What is there about Raiders 1 and 2, which might give a league a legal way to deny relocation rights to a present owner (especially one whose ownership exceeds the usual 7-year clause)?
 

madhi19

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Why would Melnyk be humming and hawing about the arena and development proposal at Lebreton Flats after his group, the RLG, worked so hard to have it approved by the NCC last year? Now he decides to come out and suggest the team may not be better off with a new arena at the downtown location because much of their season ticket base is in western Ottawa and Kanata? He didn't research this before submitting a proposal for a massive development at Lebreton Flats that would include a new arena? It doesn't add up...

Oh, and these statements seem to contradict those recently made by the commissioner who stated that a new downtown arena was important for the long-term stability of the Senators.

I think Melnyk still wants an arena downtown but is trying to negotiate a better deal with the city to extract more public subsidies...or he is in so much debt that he can no longer afford this downtown development. Remember when this arena proposal originally came out and it was suggested it would be privately funded? Yeah, right!

I doubt Melnyk would move the team to a new location like Quebec City or Houston as he would be a tennant and not privy to all the revenue streams the arena would provide - suites, advertising, naming rights, parking, concerts and other events. He wouldn't be any better off financially. He would have to sell the Sens to one of these outside interests in order for the team to move from Ottawa ... and I don't see that happening, not with the likelihood of ownership groups interested in keeping the team in Ottawa...and likely having the capital available to develop Lebreton Flats.

It might be a case of the project going belly up for all sorts of other reasons. Real estate cooling off, liquidity issues... It sound like Melnyk won the battle to build his project only to lose the war because he can't afford that kind of play anyway.
 

mouser

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Not arguing, especially since my guess is you have a legal background, but I don't see a way around Raiders I & II. Please elaborate....

I rather think that the way the league would operate would be to set such a high relo fee as to make it financially unwise for the owner to move.

(And, all of this is assuming that there are arena options available in the current market). If there are NO arena options available (for example, the possibility of Islanders if they lose Belmont - although NYC is obviously a big fish... or Florida in 8 years, when the current lease (with its subsidy) expires), then the league would be fine with a relo, since the relo happening puts further pressure on all markets with teams to "pony up or we leave....."

Again, my curiosity is piqued here. What is there about Raiders 1 and 2, which might give a league a legal way to deny relocation rights to a present owner (especially one whose ownership exceeds the usual 7-year clause)?

Raiders 1 & 2 don't say the NFL can never block a team from moving. On the movement issue it essentially said the NFL can't arbitrarily block an owner from moving. There has to be some set of objective standards/process/metrics the league uses when deciding to deny a team relocation. The NFL didn't apply such standards when voting on the Raiders move, and Al Davis won his lawsuit. The NFL has since implemented a more defined process they're supposed to use when considering a team move. However we haven't seen a legal challenge since Davis to establish whether those new standards would be enough to allow the NFL to block a move and not be in violation of anti-trust law.
 

Melrose Munch

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“I think it was exaggerated in terms of the significance of the comments,” said Daly. ” I’d also say it’s very important to understand that everything that’s done in the NHL, vis-a-vis franchises and potential relocations are done through the board of governor and 30 other franchises.
“No individual owner has the ability to say he’s leaving a market and going to a new market. That is ultimately a decision for the board of governors.”
Bill Daly understand Melnyk’s frustration, but is confident Senators will stay in Ottawa


Daly says this. I wonder if the answer is somewhere in the middle.
 

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