Balsillie/Phoenix part III

[eightyseven]

"There is no front door", remember?

 

[Jake16]

One thing I've been thinking about...

And isn't it true that he has no right to challenge the relocation process of the NHL based on anti-trust or otherwise until he is an actual owner?
.

My response would be Yes.

Under NBA v. SDC, the NHL rules themeselves do not violate antitrust laws - but particular application of those rules in a specific instance can. Here, Balsilie does not own the team yet, so, the league will argue, he cannot make a proper application for a team he actually owns to relocate from Phoenix to Hamilton. The league will likely argue he does not have standing to make a request to relocate until he actually owns the team free and clear in Phoenix and then makes the application. Once the application is received, the league can then make a decision (as the NBA did in the SDC case cited below) and if the grounds for denial are "reasonable" will not violate the antitrust laws. The league, however, will argue that Balsilies attempt to make such a request and to even file the antitrust case challenging the league rules is completely premature and he lacks standing to do so having not satisfied the conditions precedent neeeded to make such a claim (i.e., actual ownership; filing an actual request to relocate a team he owns; denial of that request based on application of unreasonable factors.)

Ninth Circuit court of Appeals in NBA v. SDC 815 F.2d 562, 568-69 (9th Cir. 1987) (the Clippers case) stated:

"Since a careful analysis of Raiders I makes it clear that franchise movement restrictions are not invalid as a matter of law, for the district judge to grant summary judgment against the NBA, he must have found that the NBA had adduced no facts upon which a reasonable jury could have found that NBA consideration of the Clippers' move was a reasonable restraint of trade. As we have demonstrated, antitrust analysis under Raiders I indicates that the question of what restraints are reasonable is one of fact. We believe that numerous issues of fact remain.


[7] The NBA asserts a number of genuine issues of fact: (1) the purpose of the restraint as demonstrated by the NBA's use of a variety of criteria in evaluating franchise movement, (2) the market created by professional basketball, which the NBA alleges is substantially different from that of professional football, and (3) the actual effect the NBA's limitations on movements might have on trade. The NBA's assertions, if further documented at trial, create an entirely different factual setting than that of the Raiders and the NFL. Further, as the NBA correctly notes, the antitrust issue here is vastly different than that in the Raiders cases: the issue here is “whether the mere requirement that a team seek [NBA] Board of Governor approval before it seizes a new franchise location violates the Sherman Act.†The NBA here did not attempt to forbid the move. It scheduled the Clippers in the Sports Arena, and when faced with continued assertions of potential antitrust liability, brought this suit for declaratory relief. Given the Raiders I rejection of per se analysis for franchise movement rules of sports leagues, and the existence of genuine issues of fact regarding the reasonableness of the restraint, the judgment against the NBA must be reversed.

Similarly, the district court's grant of summary judgment for antitrust declaratory relief to the defendants ignores genuine issues of fact and misinterprets Raiders I, and must be reversed. The district court granted the Clippers judgment on their Count I, which asserted that Article 9, Article 9A if effective, and any meeting of the NBA to consider the Clippers' move, all violate the antitrust laws. Raiders II, however, reemphasized that only the particular application of the franchise movement rules in that case violated antitrust law. The mere existence of Article 9, Article 9A, and various provisions for franchise movement evaluation, cannot violate antitrust law. Further, the NBA has adduced sufficient facts to create a genuine issue of the reasonability of the restraint.
"

 

[Egil]

No interesecting home territories without permission.

I still don't see anything saying that you for sure can't take out the offending part of the other teams territory. The entire thing is kindof moot though as JB clearly wants the Toronto TV market.

 

[King_Stannis]

"There is no front door", remember?

There's no front door right now. Who's to say that in 2-3 years the league won't expand, at which point he'd be able to offer up a detailed submission?

But like a spoiled rich boy he wants it right now. And he also wants it without having to pay the fee to the other spoiled rich boys.

Sorry, there's 30 of them and only one of him. Plus he pissed off their ringmaster, too. I hope Balsillie does fail so that it provides people with the lesson that money can't always buy you everything you want.

 

[Egil]

New TSN Article-Other NHL teams support leaving Balsillie out

Sigh.

I'd love to get actual numbers. The word "most" is so vague and certainly implies that Balsille has some support.

 

[Egil]

There's no front door right now. Who's to say that in 2-3 years the league won't expand, at which point he'd be able to offer up a detailed submission?

But like a spoiled rich boy he wants it right now. And he also wants it without having to pay the fee to the other spoiled rich boys.

Sorry, there's 30 of them and only one of him. Plus he pissed off their ringmaster, too. I hope Balsillie does fail so that it provides people with the lesson that money can't always buy you everything you want.

How is the league going to expand? The fans don't want it, and there are too many distressed teams. Until Balsille started banging on the door, expansion to SO wasn't even an item for discussion. When you factor in them not having been successful at expansion in the past, saying he should just wait on expansion is non-sensible.

 

[TaketheCannoli]

How is the league going to expand? The fans don't want it, and there are too many distressed teams. Until Balsille started banging on the door, expansion to SO wasn't even an item for discussion. When you factor in them not having been successful at expansion in the past, saying he should just wait on expansion is non-sensible.

Please explain two things:

How do you know the fans don't want expansion? Do you believe SO fans would rather have an expansion team vs. no new team?

Why is waiting "non-sensible"?

When you factor in them not having been successful at expansion in the past

who?

 

[Hawkscap]

I still don't see anything saying that you for sure can't take out the offending part of the other teams territory. The entire thing is kindof moot though as JB clearly wants the Toronto TV market.

Each member shall have control of the playing of hockey games within its home territory, including, but not being limited to, the playing in such home territory of hockey games by any teams owned or controlled by such member or by other members of the league...
No other member of the League shall be permitted to play games (except regularly scheduled road games with the home club) in the home territory of the member without the latter member's consent. No franchise shall be granted for a home territory within the home territory of a member, without the written consent of such a member.

plus the 50 mile cirlcle from city limits how can you read this any other way?

 

[GSC2k2*]

I still don't see anything saying that you for sure can't take out the offending part of the other teams territory. The entire thing is kindof moot though as JB clearly wants the Toronto TV market.

Again, read the definition of "home territory".

 

[GSC2k2*]

I'd love to get actual numbers. The word "most" is so vague and certainly implies that Balsille has some support.

Agreed that the article is really meaningless.

 

[Egil]

Please explain two things:

How do you know the fans don't want expansion? Do you believe SO fans would rather have an expansion team vs. no new team?

Guaranteed if you took a poll of NHL fans that they would be against expansion. SO would prefer an expansion team to no team tough.

Why is waiting "non-sensible"? who?

Waiting is non-sensible because there has been no announced expansion plans, with numerous teams in financial trouble in a recession. The idea that expansion is going to occur "soon" seems insane to me.

As for "who" hasn't been succesful in the past, that would be Hamilton.

 

[Egil]

Again, read the definition of "home territory".

Two things:

#1 I don't see anything forcing a team to play in their "home" city. So like you could say that London was your city, and then play somewhere else inside your 50 mile radius (I believe that is allowed).

#2 The 4.3 section saying no home territory shall be granted in an existing home territory suggests that a cut out section is allowed. I also see no language forbidding a club from giving up part of its territory, which again, would allow for a cut out portion.

 

[Noldo]

Would the Leafs or Buffalo dare veto a move to Hamilton? At the end of the day I can't imagine Buffalo vetoing the move and likely wants some one-time compensation. The Leafs very well might but if they harpoon another team in the 5th largest market in North America the PR blowback would be more than significant. Not sure they would care though.

This is just personal speculation, by my take would be that Leafs are most likely THE organisation that is against allowing Balsillie to move Phoenix to Hamilton/Southern Ontario.

Considering how Balsillie tries to present his pursue in pro-canadian flavour, what kind of media storm would arise, if the canadian media would find out that Maple Leafs are the primarily party opposing the move (as I suspect), and anti-canadian Bettman is just spokesperson, acting, as his role is, as the voice of the owners, that in turn are listening very carefully Toronto's opinion.

I would assume that there is at least 3 teams with very strong reasons to directly oppose Balsillie's pursue for relocation:
- Buffalo, because it would eat into their territory. Most likely team that could be bought out though
- Toronto, the key to Southern Ontario and most likely the party calling many of the shots here. If Toronto were to find agreement with Balsillie, I would not be surpsired to see all proposals to be accepted very quickly. But currently Toronto IS the party that can sell Southern Ontario market (the lucrative asset Moyes has tried to sell) and I suspect they would like to have quite large part of the pie to themselves
- Detroit, twofold interest. First of all, Ontario is just close to their market (although clearly outside their territory) but more importantly, having any new teams in eastern time zone, not to talk about relocation of team from further west is drawback to Detroit's hope to return East.

Just my speculation, but I would love to see the media reactions, if Toronto is really the main opposing party (just my personal speculation)

 

[SoCalPredFan]

"There is no front door", remember?

There most certainly is a front door. It just require a would-be-owner to actually play by the rules and procedures as set by the by-laws --- those same by-laws that every other team abides by.

JB wants his team, his way, and on his timeline. A sports business is a collective and, by its very design, has to create by-laws in which to govern the league less it falls apart. There simply is no way around this.

 

[Bitterman]

Neither the Leafs or the Sabres can technically veto a move - see my post from Bylaw 36 above - but it is VERY unlikely that you would get a majority vote of the BoG without consent from Toronto/Buffalo and appropriate territorial fees paid.

I was going by this:

Each member shall have control of the playing of hockey games within its home territory, including, but not being limited to, the playing in such home territory of hockey games by any teams owned or controlled by such member or by other members of the league...

No other member of the League shall be permitted to play games (except regularly scheduled road games with the home club) in the home territory of the member without the latter member's consent. No franchise shall be granted for a home territory within the home territory of a member, without the written consent of such a member.

So Bylaw 36 now trumps the existing written consent clause which in effect gave a Veto?

 

[TaketheCannoli]

Guaranteed if you took a poll of NHL fans that they would be against expansion.

Unless someone can cite an actual credible poll, this is just your hunch. Additionally, the outcome of the poll could easily be dependent upon how the question is worded.

Everybody knows or something like that is not validation.

Waiting is non-sensible because there has been no announced expansion plans, with numerous teams in financial trouble in a recession. The idea that expansion is going to occur "soon" seems insane to me.

As for "who" hasn't been succesful in the past, that would be Hamilton.

When did a Hamilton group approach the League, enter into negotiations and SATISFY MLSE and the Sabres and apply for an expansion franchise? If I remember correctly, a Hamilton group did apply for expansion, but didn't agree to paying the fees upfront, which was a condition, didn't cut a deal with MLSE or Buffalo. You can't succeed if you don't actually try.

 

[Gulvorn]

Well there's no way the Yotes are getting moved to Southern Ontario now. The two New York senators have come out today to say this team shouldn't be moved to Hamilton because it would hurt Buffalo because 20% of their profits come from across the border. I really don't see how you can get past Charles Schumer. And everyone knows New York is going to trump Ontario every time so I think the political pressure by the US government is going to keep the Yotes from moving.

 

[kdb209]

I was going by this:



So Bylaw 36 now trumps the existing written consent clause which in effect gave a Veto?

Correct. If the Counsel hired by the league determines that the Article 4 restrictions violate anti-trust law.

 

[KevFu]

I find it humorous that we're looking at the NHL constitution for home territory information when one of the most intriguing parts of this ordeal is on page 31 of that PDF.

The NHL Constitution states that membership in the league shall "terminate automatically" if the owner of a franchise files a petition of bankruptcy.

To me, all the talk of what the bankruptcy court will do in a bidding process is premature. The NHL's hearing with the court is claiming the Coyotes cannot be placed into bankruptcy and the court should NOT take jurisdiction over the team for a sale.

But according to the NHL Constitution, the Coyotes are now an independent hockey club, losing their affiliation the second Moyes filed for bankruptcy.

Now, because the NHL is committed to Phoenix, they are trying to get the court to refuse jurisdiction over the Coyotes and turn the team over to the league, not kick out the Phoenix Coyotes.

(It's important to note that I'm not speaking as if these bylaws are legally sound or will be applied by the NHL at all. It would appear that these bylaws are probably in place as a means to prevent teams from going the bankruptcy route. The language being a threat. The actual bylaws make little, if any, sense for the league if bankruptcy is actually carried out; as their only path possible by following their constitution is the dispersal of the Coyotes players and reducing the number of teams in the league to 29. That would open up all kinds of lawsuits and look horrible for the league. The NHL can find themselves in a really embarrassing situation, arguing that the league has rules that must be followed, while the rules of their league clearly state the Phoenix Coyotes membership automatically terminated).


However, the NHL can play this membership termination as a trump card: informing the court that if it takes possession of the team, the Coyotes are no longer an NHL team and the court will be trying to sell an essentially worthless property: a professional hockey team with no league affiliation and no players.


Long story short, the NHL is looking to settle this matter in a way that keeps the team in Phoenix, but their own language works for and against them in court, and leads me to believe that the only thing preventing them from strong-arming Basillie and the court is the desire to avoid any potential lawsuits that using their own bylaws would all but ensure.


Note: I'm not saying the termination of the franchise will EVER take place; or that it's realistically possible, only that the threat of it is.

Also, I am not a lawyer, and since some of you are, I'll concede right now that any words/terms I used which appear to be of legal nature (most notably "jurisdiction") are being used in a layman's context and not as a legal term.

 

[TaketheCannoli]

This is just personal speculation, by my take would be that Leafs are most likely THE organisation that is against allowing Balsillie to move Phoenix to Hamilton/Southern Ontario.

Considering how Balsillie tries to present his pursue in pro-canadian flavour, what kind of media storm would arise, if the canadian media would find out that Maple Leafs are the primarily party opposing the move (as I suspect), and anti-canadian Bettman is just spokesperson, acting, as his role is, as the voice of the owners, that in turn are listening very carefully Toronto's opinion.

I would assume that there is at least 3 teams with very strong reasons to directly oppose Balsillie's pursue for relocation:
- Buffalo, because it would eat into their territory. Most likely team that could be bought out though
- Toronto, the key to Southern Ontario and most likely the party calling many of the shots here. If Toronto were to find agreement with Balsillie, I would not be surpsired to see all proposals to be accepted very quickly. But currently Toronto IS the party that can sell Southern Ontario market (the lucrative asset Moyes has tried to sell) and I suspect they would like to have quite large part of the pie to themselves
- Detroit, twofold interest. First of all, Ontario is just close to their market (although clearly outside their territory) but more importantly, having any new teams in eastern time zone, not to talk about relocation of team from further west is drawback to Detroit's hope to return East.

Just my speculation, but I would love to see the media reactions, if Toronto is really the main opposing party (just my personal speculation)

I have to believe one could add Nashville, Pittsburgh and Columbus to the no votes. Nashville and Pittsburgh for obvious reasons, Columbus because they want to be on the Eastern Conference, among other things.

If Jerry Moyes has Phoenix's vote, right now that would be a yes. If the NHL has the Phoenix cote, I suspect they would recuse themselves.

 

[TaketheCannoli]

Well there's no way the Yotes are getting moved to Southern Ontario now. The two New York senators have come out today to say this team shouldn't be moved to Hamilton because it would hurt Buffalo because 20% of their profits come from across the border. I really don't see how you can get past Charles Schumer. And everyone knows New York is going to trump Ontario every time so I think the political pressure by the US government is going to keep the Yotes from moving.

Please cite real proof.

"Everybody knows" is meaningless and honestly aggravating. Everyone doesn't know.

 

[Gulvorn]

Please cite real proof.

"Everybody knows" is meaningless and honestly aggravating. Everyone doesn't know.

Associated Press

BUFFALO, N.Y. -- U.S. Sens. Charles Schumer and Kirsten Gillibrand of New York are opposed to the Phoenix Coyotes relocating to southern Ontario because it would have a potential "crippling" effect on the Buffalo Sabres.

In a letter sent to NHL commissioner Gary Bettman on Thursday, the two Democrats sided with the league in its bid to prevent Canadian businessman Jim Balsillie from purchasing the bankrupt Coyotes and moving them to Hamilton, Ontario, located about 45 minutes west of Buffalo.

The Sabres, one of the NHL's strongest U.S. small-market franchises, generate about 20 percent of their revenue from across the border.

The NHL has asked a bankruptcy judge to uphold the league's right to determine who owns a franchise and where it plays.



And if you want evidence of how it would pan out if Charles Schumer gets involved all you would have to do is take a look at how deep his pocket book is.

 

[Bitterman]

New TSN Article-Other NHL teams support leaving Balsillie out

Sigh.

Dreger ignores a key fact. MBL maintained a skeleton Expos with minimal financing until an owner could be found. Relocation was a given. Nobody would buy the team without the ability to move the franchise.

So, how can the NHL absorb huge losses to keep a team in Phoenix when at the end of the day it'll have to be moved by whoever buys it anyway? Knowing the team is failing and likely will be moved is a poison pill for locals who will invest even less money and emotion into something they see is going no matter what making the losses for the coming season(s) even worse. That's what made the Expos move a self-fulfilling prophecy.

Would/could the NHL go that far just to keep JB from becoming an owner? If GB goes that route just to deny Canadians another team there will be a very high price to pay as well as collusion charges in court.

 

[Artyukhin*]

New TSN Article-Other NHL teams support leaving Balsillie out

Sigh.

funny tho majority already once voted him in.....

 

[The Pouzar]

Well there's no way the Yotes are getting moved to Southern Ontario now. The two New York senators have come out today to say this team shouldn't be moved to Hamilton because it would hurt Buffalo because 20% of their profits come from across the border. I really don't see how you can get past Charles Schumer. And everyone knows New York is going to trump Ontario every time so I think the political pressure by the US government is going to keep the Yotes from moving.

It doesn't matter what the senators from NY want as they have no jurisdiction in Canada. It could be argued that Buffalo's territorial rights stop at the U.S., Canada border.