Balsillie/Phoenix Part VI

[Art.Vandelay]

it didn't help that the arena was forced to find other events in '04-05 DUE TO THE lockout; Jobing was scheduled to open that year.

Cancelling the all-star game at Jobing.com didn't help much either.

 

[kdb209]

this is not the way I remember it at all. Boots joined the local group after the initial offer was made so Leipold entered into an agreement with the local owners, not Boots.

Freeman's group started it's negotiations with Leipold before Boots' involvement. Boots was then recruited before the deal was finalized and the official $193M letter of intent signed.

 

[Jake16]

Yes, I actually believe he would.

.

That's ridiculous. Its not like Earl Scudder the recipient of the email, ever denied receiving it in early April. In fact, he admitted in his sworn declaration having the conversation with Bettman in April mentioning Winnipeg.

 

[kdb209]

That's ridiculous. Its not like Earl Scudder the recipient of the email, ever denied receiving it in early April. In fact, he admitted in his sworn declaration having the conversation with Bettman in April mentioning Winnipeg.

[tinfoil hat]
Ssssh - he's part of the conspiracy too.
[/tinfoil hat]

 

[New User Name]

No he took 40M less to sell the team to someone willing to buy the team right then, someone willing to sign a binding agreement.

Jims offer was to buy the Preds. He did sign a tentative agreement, the NHL demanded a no movement clause and Jim backed out.

Then the "Our Team Nashville" group with Boots Del Biaggio
bought the team. Interesting to note, no such "no movement clause" was included.

It is rumoured that Del Biaggio's long term goal was ownership of a club in Kansas City whether this team be the Predators, another existing team or an expansion franchise.

 

[SoCalPredFan]

Correct me if I'm wrong but the only real bid at this point is Balsillie's. Reinsdorf/NHL have not submitted the Reinsdorf bid to the court yet or the required 20 million dollar bid fee. The only option other than JB, if Reinsdorf backs out and there are no other bids, is for the NHL to take over the team and run it/pay for it's losses in Glendale, or contract the team (which will never happen), correct?

Correct. Though, technically, the auction hasn't yet started and the bidders don't know exactly what they're bidding on (i.e. is it a movable asset or not).

 

[SoCalPredFan]

It seems likely GB also was playing it as he needed a buyer desperately any buyer at that time Boots was not a logical 1st choice if he needed loans to make it happen and that means no vetting whatsoever was really done of a prospected owner at all other owners and GB should have had alarm bells going off all over he didnt care about what happened to the team all he cared and still does about his money and his expansion babies no matter who loses he wants to win no different than a few other guys we talk about in this forum hes just met one who will play as dirty as he does and i hope it takes him down

Thing is ... Boots wasn't buying it by himself. With Boots came a group of local owners... local owners who were committed to fixing a lot of the previous problems (i.e. utilizing the arena for more events, doing a better job of attracting local corporate sponsors,etc.). Boots had the final piece of finances needed (or so was thought), but the fact that a local ownership group came together is truly what saved the Predators in Nashville.

 

[SoCalPredFan]

Jims offer was to buy the Preds. He did sign a tentative agreement, the NHL demanded a no movement clause and Jim backed out.

Then the "Our Team Nashville" group with Boots Del Biaggio
bought the team. Interesting to note, no such "no movement clause" was included.

It is rumoured that Del Biaggio's long term goal was ownership of a club in Kansas City whether this team be the Predators, another existing team or an expansion franchise.

That is factually incorrect. There was a no-movement clause ... but there also was trigger-able "escape-clauses" tied to revenue and attendance thresholds.

The fundamental difference between the Local Group/Boots and Balsillie is that the former group was willing to genuinely try and make it work in Nashville. JB showed through his actions (illegally selling Hamilton Preds tickets, etc) that he would not.

 

[RR]

i know this has some impact but you and i can both hire 10 experts to give us forecats and id be surprised if each was same you me or Gb do not have crystal ball to future net gains or worth of a franchise and i could say some may make a case in the economy today it could actually decrease , that and the Habs with the arena as the Flagship franchise worth 420 does not make S Ont worth 400 it cant we would need the wall street logic that created the mortgage booms we saw decimate N American and other world economies as our guide ,we must work from conseravative terms about the dollar amounts because of that situaion and its not done yet see posts about food banks and thats not just here , theres lots to add and consider

Of course it's all forecasting (guessing is as good a term), all I'm saying is the value of a franchise in Hamilton TODAY is not $400M. But there are costs asociated with buying and moving them there.
1) The Judge accepting a bid that best takes of the creditors
2) If relocation, a reasonable fee is due the league, per ruling in Raiders 2
3) Indemnity to Toronto and Buffalo is up for debate
4) Damages to Glendale are up to debate
5) Damages to other vendors with contracts are up for debate

That's what can potentially push the opportunity cost above $400M, and anyone wishing to buy and move will have to decide if it's worth it.

I'm not sure why you keep talking about the value of Monteral because it is completely irrelevant in this case.

I'll say this again: Judge said in court, citing Raiders 2, that a reasonable relo fee is value of team in new location vs value in current location. So, four-part question:

1) What do you think the value of a Hamilton franchise is? Actual value, as if it was ready to compete in its first NHL season, and based on all the arguments for relocation by PSE.

2) What do you think the value of the Phoenix franchise is? Actual value, based on all the arguments put forth by PSE on why Phoenix is and never will be a viable hockey market.

3) What do you think the value of a Hamilton franchise is? Actual value, as if it was ready to compete in its first NHL season, and based on all the arguments against relocation by NHL.

4) What do you think the value of the Phoenix franchise is? Actual value, based on all the arguments put forth by NHL on why Phoenix is a viable hockey market.

Jot all those numbers down, look them over, and you should come up with a high-end and low-end number. The opportunity cost just to relocate to Hamilton is in there somewhere. Any other damages the judge awards is on top of that.

 

[David Singleton]

Jims offer was to buy the Preds. He did sign a tentative agreement, the NHL demanded a no movement clause and Jim backed out.

Then the "Our Team Nashville" group with Boots Del Biaggio
bought the team. Interesting to note, no such "no movement clause" was included.

It is rumoured that Del Biaggio's long term goal was ownership of a club in Kansas City whether this team be the Predators, another existing team or an expansion franchise.

Incorrect. As has been mentioned a couple of times, the Freeman group did not include Boots initially.

There is no solid proof whether a "no movement clause" was signed either way (to my knowledge). That said, I believe the NHL has testified that it is now standard for all franchise purchases (and was a standard for the Nashville sale). I do not believe that has been challenged as false.

There was an escape clause in the renegotiated lease with the city. It has yet to be triggered.

Thanks.

 

[LeftCoast]

Yeah people forget that and blame Bettman, it was JB that wouldn't put a binding offer in on Nashville allowing the local owners to make their own offer. Leipold took what he could get.

Nashville fans still hanging on this "non-binding" BS.

It was non-binding because JB didn't want a team stuck in Nashville that he couldn't move. It was contingent upon the BoG approving a relocation petition. This was a contingency that neither party (Leopold or Balsillie) was in a position to satisfy, so the offer had to be non-binding.

Let's say I want to buy a piece of property off of you in order to build a strip mall. It is currently zoned for agriculture or some other purpose. I am willing to pay a premium because as a strip mall it is worth a lot more than as a watermelon farm. So I ask you to apply for re-zoning and offer you a high price for the property contingent upon successful re-zoning. Only a fool would make a binding offer in this situation because neither party alone can satisfy the contingency.

 

[Hammertown]

Correct. Though, technically, the auction hasn't yet started and the bidders don't know exactly what they're bidding on (i.e. is it a movable asset or not).

Right, depending on if the team is relocatable or not, it will affects who bids and how much the bid is of course.

Question then, If Judge Baum decides that the franchise is not relocatable to Hamilton, as per Balsillie's original bid, does that mean it is not relocatable to any city and must remain in Glendale?

Does that then prohibit Reinsdorf from moving the team in a year or two due to the court order prohibiting the team from moving and would he withdraw his bid if it was not relocatable?
Say the judge awards Reinsdorf the franchise on the premise that he's keeping the team in Glendale and his alleged 130 million dollar bid is the best, based on lease concessions, no damages to Glendale, no relocation fee etc and Reinsdorf pulls a fast one and applies to move it after a few seasons anyways, effectively damaging Glendale anyways. Is the existing non relocatable judgement still in place at that time. What's to stop JB from doing the same thing if it is no longer in effect after the sale?

I don't think the court/NHL can just say to JB, the team just isn't relocatable by you, or to Hamilton. It would not be relocatable by anyone to any city.

Thoughts?

 

[Ward Cornell]

Right, depending on if the team is relocatable or not, it will affects who bids and how much the bid is of course.

Question then, If Judge Baum decides that the franchise is not relocatable to Hamilton, as per Balsillie's original bid, does that mean it is not relocatable to any city and must remain in Glendale?

Does that then prohibit Reinsdorf from moving the team in a year or two due to the court order prohibiting the team from moving and would he withdraw his bid if it was not relocatable?
Say the judge awards Reinsdorf the franchise on the premise that he's keeping the team in Glendale and his alleged 130 million dollar bid is the best, based on lease concessions, no damages to Glendale, no relocation fee etc and Reinsdorf pulls a fast one and applies to move it after a few seasons anyways, effectively damaging Glendale anyways. Is the existing non relocatable judgement still in place at that time. What's to stop JB from doing the same thing if it is no longer in effect after the sale?

I don't think the court/NHL can just say to JB, the team just isn't relocatable by you, or to Hamilton. It would not be relocatable by anyone to any city.

Thoughts?

If the Judge rules that the team cannot move then they only option if the losses continue that the team will need to fold entirely!

The team will need to be able to move!

 

[BogsDiamond]

Cancelling the all-star game at Jobing.com didn't help much either.

Great observation. That might have attracted a lot more potential fans.

As a Canadian I want more teams in the great white north, but I can't help but wonder if Phoenix wouldn't have been more successful if they built the arena in Scottsdale.
By all accounts from Phoenix residents, this seems to be the case.

I'm ignorant to the facts, but didn't Bettman help push the arena deal in Glendale after Scottsdale balked at building a new facility?

 

[David Singleton]

If the Judge rules that the team cannot move then they only option if the losses continue that the team will need to fold entirely!

The team will need to be able to move!

Understand that this is complete speculation on my part. I am nowhere near a legal expert.

I suspect, given that the NHL will continue to fund the team, that two options may exist: (1) the NHL could push the angle that they have control of the team and pull the team from bankruptcy (this was never forcibly pushed to the point of obtaining a ruling to my knowledge), or (2) the NHL itself could potentially buy the franchise provided they cover the creditors.

Either case would result in the team remaining in Phoenix (at least for a short time). The second option has precedent with MLB and the Expos, but nothing in the leagues Constitution, By-Laws, or Rules actually has any guidelines for going that far (to my knowledge).

Both options also effectively remove the team from bankruptcy and allows the NHL to fully control the next steps with the team.

 

[Ward Cornell]

Understand that this is complete speculation on my part. I am nowhere near a legal expert.

I suspect, given that the NHL will continue to fund the team, that two options may exist: (1) the NHL could push the angle that they have control of the team and pull the team from bankruptcy (this was never forcibly pushed to the point of obtaining a ruling to my knowledge), or (2) the NHL itself could potentially buy the franchise provided they cover the creditors.

Either case would result in the team remaining in Phoenix (at least for a short time). The second option has precedent with MLB and the Expos, but nothing in the leagues Constitution, By-Laws, or Rules actually has any guidelines for going that far (to my knowledge).

Both options also effectively remove the team from bankruptcy and allows the NHL to fully control the next steps with the team.

I don't dispute that could be an option that the GB could be considering but do you think all the other owners will be willing to throw their money into this situation while they are struggling themselves?

 

[David Singleton]

I don't dispute that could be an option that the GB could be considering but do you think all the other owners will be willing to throw their money into this situation while they are struggling themselves?

They are already willing to fund the team for next season. If they actually purchase the team (and leave it in Phoenix), the only real creditor left is Moyes himself provided they pay all of the bills.

How much would they have to purchase the team for to satisfy the Judge?

 

[Art.Vandelay]

Great observation. That might have attracted a lot more potential fans.

As a Canadian I want more teams in the great white north, but I can't help but wonder if Phoenix wouldn't have been more successful if they built the arena in Scottsdale.
By all accounts from Phoenix residents, this seems to be the case.

I'm ignorant to the facts, but didn't Bettman help push the arena deal in Glendale after Scottsdale balked at building a new facility?

The location of the arena is a sore spot here. There are people that complain about the drive from the East valley to Jobing.com and there are those that say it shouldn't matter. Bottom line, there are people that would drive 30 minutes to a game, but won't drive 45-60. I think it's indicative of the type of fans in AZ and I think it has impacted attendance.

I'm not condemning anyone that does not want to drive that far, but I personally don't have any issue with the commute. I've lived in New York and Dallas, so having to drive/commute 60+ minutes to an event is just something I'm used to.

I don't recall Bettman pushing Glendale in particular. I think he just wanted a new arena.

 

[Jake16]

If the Judge rules that the team cannot move then they only option if the losses continue that the team will need to fold entirely!

The team will need to be able to move!

Thats not true. Then they will be sold to Reinsdorf or Breslow albeit for alot less than $212.5.

 

[Ward Cornell]

Thats not true. Then they will be sold to Reinsdorf or Breslow albeit for alot less than $212.5.

Do you think there actually be a buyer with "zero" chance to relocate?

IMHO any potential owner will need that door open for them to even be close to being interested!

 

[LadyStanley]

How much would they have to purchase the team for to satisfy the Judge?

One story I read/posted in the last couple of days was an estimate of $120m to satisfy the creditors (for a stationary asset).




Toronto GM Brian Burke was just on XM (In the Slot). He would not comment on the situation of moving to Hamilton (and he's a guy who hates not to comment) because he couldn't afford the fine. But he did say that the issue of moving a franchise is a legal issue that has great ramifications. (In so many words: ) "The building and territory are two of the most important assets a franchise has."

 

[mouser]

Right, depending on if the team is relocatable or not, it will affects who bids and how much the bid is of course.

Question then, If Judge Baum decides that the franchise is not relocatable to Hamilton, as per Balsillie's original bid, does that mean it is not relocatable to any city and must remain in Glendale?

Does that then prohibit Reinsdorf from moving the team in a year or two due to the court order prohibiting the team from moving and would he withdraw his bid if it was not relocatable?
Say the judge awards Reinsdorf the franchise on the premise that he's keeping the team in Glendale and his alleged 130 million dollar bid is the best, based on lease concessions, no damages to Glendale, no relocation fee etc and Reinsdorf pulls a fast one and applies to move it after a few seasons anyways, effectively damaging Glendale anyways. Is the existing non relocatable judgement still in place at that time. What's to stop JB from doing the same thing if it is no longer in effect after the sale?

I don't think the court/NHL can just say to JB, the team just isn't relocatable by you, or to Hamilton. It would not be relocatable by anyone to any city.

Thoughts?

It's a non-issue for the Judge. In your hypothetical scenario Reinsdorf would need to deal with Glendale in a future legal spat. It would be outside the Judge's responsibility in this case.

 

[CGG]

One story I read/posted in the last couple of days was an estimate of $120m to satisfy the creditors (for a stationary asset).

Only if Moyes himself is somehow no longer a creditor.

 

[RR]

Only if Moyes himself is somehow no longer a creditor.

I believe the $120M estimate is if the team stayed put and all secured creditors were made whole. Moyes is an unsecured creditor.

 

[Fugu]

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