Can the NHL STOP Melnyk from moving to Quebec City ( or anywhere else )?

[Gil Gunderson]

While it’s happaned in the NBA and NFL, I don’t think either league has fought to stop teams from relocating like the NHL has under Bettman (providing the city has a suitable arena).

Bettman helped put a stop to the possibility of relocation for the Sens and Oilers and has been hanging on to the Coyotes for dear life.

Different circumstances, but yeah...

 

[branch]

I think the NHL would rather have the bigger market of Ottawa, and get the Bell TV dollars, while still collecting TVA revenues. Thing is the arena needs to be central. It has worked everywhere else in Canada. No one wants to deal with Melnyk. He can try the same thing that Moyes did, but the NHL controls where its markets are. The only way to get through that is lawsuit threats like ASG had. I don't think Melnyk can make it work. He has become a maverick and a polarizing owner. My guess is he is forced out of the club, and the NHL finds someone to work with in Ottawa. Quebec for its part, while it has the arena, faces the threat of economic instability, based on arm's length crown corporations being a main source of corporate revenue, and their equity is always at the mercy of a federal government that controls transfer payments.

Honestly, I keep seeing this, and I am not in law or finance but I remain cautiously optimistic that the league can do this, since I harbour a deep personal disdain of EM. But what mechanisms exists that the NHL and the BoG can "force" Eugene out of the club?

 

[Grudy0]

While it’s happaned in the NBA and NFL, I don’t think either league has fought to stop teams from relocating like the NHL has under Bettman (providing the city has a suitable arena).

Bettman helped put a stop to the possibility of relocation for the Sens and Oilers and has been hanging on to the Coyotes for dear life.

Different circumstances, but yeah...

Keep in mind that the relocations in the NFL last year did not involve a change in ownership.

The last time an NHL team was relocated by the existing owner was Peter Karmanos in Hartford then Carolina.

The NHL uses the only tool in their belt to stop a sale and relocation - reject approval of the potential new owner. It really is a different circumstance.

 

[GrantLemons]

Honestly, I keep seeing this, and I am not in law or finance but I remain cautiously optimistic that the league can do this, since I harbour a deep personal disdain of EM. But what mechanisms exists that the NHL and the BoG can "force" Eugene out of the club?

Probably nothing. EM is going to pack up his team, take it to a smaller market in Quebec City, where he doesn't own the arena and has to pay a 300 million relocation fee. There will be a press conference where Gary Bettman and Eugene Melnyk are like Batman and Robin cracking jokes, and will conclude with photos of them holding up a Nordiques jersey and smiling profusely. "Welcome to Quebec City, Eugene." says Gary.

The endgame is clear. Eugene needs to take his grocery store and move to Quebec. It would look great there.

 

[Marshy71]

Dont want to get my hopes up but... ive got my hopes up. Bring back the Nordiques!

 

[Grudy0]

Given that the NHL can't legally stop a move in the U.S. and maybe this law hasn't been tested in Canada, but would not stop a move hypothetically... then what is to stop the NHL ( Bettman ) from slapping down a $650,000,000 relocation fee on Melnyk? Because from what I have read, the commissioner can call for any relocation fee he sees fit to pull out of his ass... depending upon what he see the relocated market to be worth, again, in his opinion.

As MNNumbers points out, the relocation fee has to be based on a market-dependent forces. If the amount is too high, expect litigation...

Could not do that in US, because Melnyk would take the relocation fee to court. It's supposed to be as assessment of the difference between the 2 markets. The league would have to explain the difference, and a 650M difference would obviously NOT fly.

Again, as far as I know, this has not been fully tested in Canadian law.

But it doesn't have to be tested in Canadian law. The NHL is a US entity, and if I were Melnyk I'd be placing my bets in the US courts as they have case law from Raiders II as precedent.

It's the competition bureau. So basically they would get involved if the move was not in the interest of fair competition.

In the Balsillie case, the NHL argued that blocking him from buying the team was not a monopolistic act by the league because their was a legitimate number of benefits to keeping the team in arizona:

1. creating and enhancing spectator interest by preserving traditional team rivalries and fostering the development of new ones;
2. encouraging investment by private parties and municipalities in arena construction and related infrastructure;
3. respecting the investment made by private parties in the supply of refreshments, parking, transportation, and team and league paraphernalia relating to the franchise;
4. attracting spectators and corporate sponsors by showing a strong commitment to a local market and the league as a whole;
5. ensuring that the sport is being appropriately promoted and that the reputation and goodwill of the league and its individual teams are not being compromised; and
6. maximizing revenues generated by the league in the form of television and media coverage rights by promoting the overall stability of the franchises that constitute the league and creating an appropriate regional balance to ensure that the greatest number of spectators is reached.

While some of these would also be achieved by starting a franchise to QC, moving the team from Ottawa would pretty much break every one of these the clauses above that the NHL used to block out Balsillie.

Does it still apply if Melnyk is moving on his own...maybe not?

But if any new buyer, or significant new financial partner was involved in moving the team to a same/worse market than Ottawa, when new local owners were willing to keep it in Ottawa...then it would be very hard for the NHL to make the case that they were not using Monopolistic power to choose the new market over the old market, because they would essentially have to argue against the exact points they provided to the bureau a decade ago.

Caveat...I am not a lawyer. if there is one out there, please clarify and correct.

You mentioned the Competition Bureau (CCB) allowing the NHL to block Balsillie. As your question mentions, none of the CCB's concerns apply to Melnyk as he's already an owner.

 

[topshelf15]

Meh ,seems more likely that a relocation of ARZ to Quebec is far more likely ...Ottawa,s problem isnt fan support,its support for its dead beat owner

 

[ponder719]

Honestly, I keep seeing this, and I am not in law or finance but I remain cautiously optimistic that the league can do this, since I harbour a deep personal disdain of EM. But what mechanisms exists that the NHL and the BoG can "force" Eugene out of the club?

The only mechanism I can see is threatening Melnyk and seeing what comes of it, and that's entirely dependent on what Melnyk's end game is. If his goal is to retain the team until he dies/pass it to his family, there's probably nothing they can do, but if he wants to sell for a profit at any point, they could attempt to strongarm him by threatening to never allow a sale. If he's afraid of losing more money, and thinks he needs to sell at some point in his life, he may be wary of a threat to block a sale, which could leave him on the hook for millions and millions in losses; if he doesn't plan to do that, then that threat is meaningless.

I can't think of anything more than that, unless there are some rules and regulations in place that are not public.

 

[Gil Gunderson]

The only mechanism I can see is threatening Melnyk and seeing what comes of it, and that's entirely dependent on what Melnyk's end game is. If his goal is to retain the team until he dies/pass it to his family, there's probably nothing they can do, but if he wants to sell for a profit at any point, they could attempt to strongarm him by threatening to never allow a sale. If he's afraid of losing more money, and thinks he needs to sell at some point in his life, he may be wary of a threat to block a sale, which could leave him on the hook for millions and millions in losses; if he doesn't plan to do that, then that threat is meaningless.

I can't think of anything more than that, unless there are some rules and regulations in place that are not public.

There have been several rumours (just rumours) over the last year of him missing or coming close to missing payroll. I assume the league could probably step in at that point, although it’s a little premature.

 

[Centrum Hockey]

From the NHL Constitution
4.2 Territorial Rights of League The League shall have exclusive control of the playing of hockey games by Member Clubs in the home territory of each member, subject to the rights hereinafter granted to members. The members shall have the right to and agree to operate professional hockey clubs and play the League schedule in their respective cities or boroughs as indicated opposite their signatures hereto. No member shall transfer its club and franchise to a different city or borough. No additional cities or boroughs shall be added to the League circuit without the consent of three-fourths of all the members of the League. Any admission of new members with franchises to operate in any additional cities or boroughs shall be subject to the provisions of Section 4.3.

Relocation bylaw is not binding for NFL owners
The Same could apply to the NHL in theory

 

[NorthCoast]

As MNNumbers points out, the relocation fee has to be based on a market-dependent forces. If the amount is too high, expect litigation...

But it doesn't have to be tested in Canadian law. The NHL is a US entity, and if I were Melnyk I'd be placing my bets in the US courts as they have case law from Raiders II as precedent.

You mentioned the Competition Bureau (CCB) allowing the NHL to block Balsillie. As your question mentions, none of the CCB's concerns apply to Melnyk as he's already an owner.

Agreed. The part I don't know about is what level of ownership change would warrant the CBB getting involved. If Melnyk takes on a minority owner to facilitate a relocation, and there were minority owners in Ottawa willing to help facilitate the Lebreton project...does that count? Does it have to be a complete ownership change? Does it have to be a controlling share?

Depending on the above it could still box him in significantly.

 

[edog37]

It is fairly well established that the League cannot prohibit an owner from moving. A new owner may be obliged to commit to stay in the location for a certain period, the League is rumored to request seven years’ commitment.

However, as well established in Coyotes/Basillie saga, the League has the right to approve or reject a new owner and thus Melnyk would not be able to sell Senators after the move without the League’s consent.

Yes, but in that case the idea was a sale to Basillie to move the team. In this circumstance, the team already would have moved. Plus, I'm pretty sure the BoG would be glad to get rid of Melnyk, so if he moved them & he sold, they could probably go with that scenario....

 

[edog37]

Relocation bylaw is not binding for NFL owners
The Same could apply to the NHL in theory

Case law only applies to the NHL (& all sports leagues for that matter). There is little the NHL could do to stop a move by an existing owner.

 

[edog37]

Melnyk has butted heads with Bettman a few times in the past, so it wouldn't exactly be out of character for him to try to make a move against the league's wishes. Although if he does decide to go rogue, wouldn't it be more profitable for him in the long run to relocate to Hamilton or somewhere else southern Ontario? He is after all a Toronto boy.

The league (& Leafs/Sabres) do not want a team in Hamilton. Plus, no viable arena exists in Hamilton currently. Copps (or whatever it's called now) is too old & I don't think there are any plans to replace it.

 

[justafan22]

The league (& Leafs/Sabres) do not want a team in Hamilton. Plus, no viable arena exists in Hamilton currently. Copps (or whatever it's called now) is too old & I don't think there are any plans to replace it.

I remember Friedman saying there's a rich guy out there who wants a team in Markham/upper GTA area. Sabres wouldn't be able to block that, only the leafs would.

 

[Centrum Hockey]

I remember Friedman saying there's a rich guy out there who wants a team in Markham/upper GTA area. Sabres wouldn't be able to block that, only the leafs would.

Jacobs has interests in Buffalo its not only a leafs and sabers issue

 

[justafan22]

Jacobs has interests in Buffalo its not only a leafs and Sabres issue

Jacobs wouldn't block a markham team

 

[Bookie21]

I can't see Quebecor going behind the NHL's back, and trying to lure the Senators. It would be quite the rogue move, not quite Balsille like, but enough to blackball Quebecor. If the NHL has enough of Melnyk, you could see them approach Quebecor regarding a relocation, but with local ownership lines up in Ottawa, that doesn't seem likely

 

[NorthCoast]

There have been several rumours (just rumours) over the last year of him missing or coming close to missing payroll. I assume the league could probably step in at that point, although it’s a little premature.

Missing payrol is one of the specified reasons listed in the NHL constitution for taking a team away from an owner.

 

[Melrose Munch]

True, but.....

Also, as far as US publicity goes, no one here really cares much about either Ottawa or Quebec. One would think that it would promote a view of the NHL as being unstable as a league, etc.... But in reality, it's well possible that no one here would even bat at eye at the move.

On the other hand, north of the border, everyone who cares knows the story of Melnyk, etc.... So, again, no problem.

It's well understood that NHL is not expanding to Quebec, so the whole "relocation vs Expansion" argument doesn't really play there.

I maintain that most posters here are correct: The Sens aren't going anywhere.

But I'm not at all sure about that....

I'm not sure quebec won't be expansion, the league has not indicated one way or another.

 

[gstommylee]

I'm not sure quebec won't be expansion, the league has not indicated one way or another.

so you think quebec will suddenly come up with the canadain amount of 650m US dollars or even higher? I doubt it. they didn't give quebec expansion 2 years ago what makes anyone think that'll change now.

 

[Flamesjustwin]

Sorry, but this is absolutely blowing smoke. Bettman and Jeremy Jacobs will never allow Ottawa to relocate to Quebec City without, first finding a buyer to keep the team in Ottawa, and I've heard there are willing buyers out there. No way this will ever happen.

And Minnesota moving to Dallas? That is EXACTLY what the league wanted back then, Sun Belt expansion. If Norm Green tried to move the North Stars to Hamilton, Ontario, I would have NEVER happened.

Bettman and Jacobs ALWAYS get what they want.

Non story here.

You are so wrong. Bettman and Jacobs CAN'T stop Melnyk from relocating the Sens if he wants. They don't have a legal leg to stand on.

 

[Melrose Munch]

so you think quebec will suddenly come up with the canadain amount of 650m US dollars or even higher? I doubt it. they didn't give quebec expansion 2 years ago what makes anyone think that'll change now.

i didnt say that, i'm just saying i don't think just relocation is an option for quebec

 

[gstommylee]

i didnt say that, i'm just saying i don't think just relocation is an option for quebec

Relocation is more likely than quebec agreeing to pay US dollars of 650m+ for a hypethically expansion spot that won't ever exist in any time soon.

 

[Bookie21]

You are so wrong. Bettman and Jacobs CAN'T stop Melnyk from relocating the Sens if he wants. They don't have a legal leg to stand on.

I think you're wrong here, as Quebecor will not deal with Melnyk unless they have the BOGs approval.