Canada's Competition Bureau investigating the NHL's franchise relocation policies?

Ted Hoffman

The other Rick Zombo
Dec 15, 2002
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The NHL is an international company. I am by no means an expert, but considering the law in question is being disputed in Canada in regards to a franchise possibly moving to Canada (and being denied based upon what could breach anti trust laws) it is absurd to think that that particular issue would be argued in the US. If the law is being broken in Canada, the lawsuit is held in Canada.
Hence my qualifier about whether or not this is specified in the League By-Laws. If it is, then any further questioning about jurisdiction is moot. $500 says that if Balsille tried to file a lawsuit in Canada claiming the league is hindering his moving the team, it gets thrown out because Canada wouldn't have jurisdiction - the location where the dispute is originally taking place (Nashville) would.
 

WalterSobchak

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Hence my qualifier about whether or not this is specified in the League By-Laws. If it is, then any further questioning about jurisdiction is moot. $500 says that if Balsille tried to file a lawsuit in Canada claiming the league is hindering his moving the team, it gets thrown out because Canada wouldn't have jurisdiction - the location where the dispute is originally taking place (Nashville) would.

I agree, I doubt it is but I agree and defer to what it states. The question is what is the focus of the inquiry. Is it the Anti-trust based on allegations(sp?) that Toronto has some buffer zone that would imply unfair business practices or is the suit against the NHL in regards to stifling a teams owners ability to move a franchise from city to city at whim.

I've only heard the discussion focus on the Maple Leafs thus far. I do not deny that the instances could very well be entwined or at least the motivations would seem to be.
 

Jonjmc

Registered User
Feb 7, 2006
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True enough. However, what does it say to potential investors if they were to see a guy getting jerked around trying to join the club?

I think it sends a clear message, the same message the NHL sent in the whole Balsille/Pens fiasco. Its our league, play by our rules and don't rock the boat or we don't want you. While this may seem an odd attitude at first glance, it is in the leagues long term best interest.
 

Ted Hoffman

The other Rick Zombo
Dec 15, 2002
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"[NHL] policies appear to grant to individual teams...the ability to veto a move by another team to within an 80 kilometre radius of their markets, raising questions of whether that amounts to stifling competition.

"It's an entirely reasonable thing for the Competition Bureau to do," said Prof. Mihkel Tombak, director of the masters of management of innovation program at the University of Toronto.

"Anti-trust authorities in all sorts of other jurisdictions have looked at similar contracts for car dealerships and territories for beer distribution so this is entirely within their purview."

At issue is whether attempts to protect an existing team's turf amounts to an undue restriction of trade and whether that is in the public interest.

For the NHL, the question to be answered is whether the territorial exclusion is reasonable in protecting a team's legitimate economic interests and its owners investments.

...

In light of the overall market size, Tombak said the Leafs could face an uphill battle trying to show that the arrival of the Preds in Hamilton would cost them money or make the teams unsustainable."


http://canadaeast.com/ce2/docroot/article.php?articleID=7072

GHOST
Apaprently the CCB can scratch this off their list of things they're going to investigate.

http://hfboards.com/showpost.php?p=9493748&postcount=327

Would anyone like to suggest alternative red herrings that can be raised?
 

MayDay

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Oct 21, 2005
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I am by no means an expert, but considering the law in question is being disputed in Canada in regards to a franchise possibly moving to Canada (and being denied based upon what could breach anti trust laws) it is absurd to think that that particular issue would be argued in the US.

I am no expert, but considering that the team proposed to be relocated is based in the US (Nashville), and if moved would violate the territorial rights of another team based in the US (Buffalo), and that depends on the bylaws of a sports league headquartered in the US (New York City), it is absurd to think this particular issue would be argued in Canada.
 

MAROONSRoad

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Feb 24, 2007
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Globe & Mail's Shoalts speculates...

"Those familiar with how the Competition Bureau operates say it typically acts on complaints. It does not go looking for cases.

So who made the complaint?

No official answer was forthcoming yesterday, as all parties kept mum. Balsillie did not respond to a request for comment placed through his public-relations firm, although a spokesman told The Canadian Press that Balsillie will have no comment until the NHL approves the sale of the Predators.

.....

My next move is to call the Competition Bureau, naturally through a third party to avoid any awkward questions from the NHL, and file a complaint about unfair trade practices. After that, either I or one of my lackeys will call a newspaper and tell someone all about this complaint.

The relevant sections of the NHL constitution will be helpfully provided to the newspaper reporter. Miraculously, the story will have the same view as my lawyer on how the league may be forced to approve the move because the NHL has said that a move requires only a majority vote of the owners, even though the constitution says a team whose territory is invaded can veto a move. I'll even pack my lawyer off to sports radio to say much the same thing."


http://www.globesports.com/servlet/story/RTGAM.20070606.wsptshoalts6/GSStory/GlobeSportsHockey/home
 

Resolute

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Mar 4, 2005
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Exactly why Steve Moore's lawsuit was tossed out of court in Colorado, the incident occured in Canada. If I am correct Moore sued Bertuzzi, the Vancouver Canucks, Crawford and the NHL. I very well could be wron though.

FWIW, I don't believe Moore included the NHL itself in the suit. I believe that was noted with some interest when the lawsuit came down.
 

Resolute

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It certainly wasn't a Spungo-like, "Toronto gets 99% of their revenues from their TV/radio contract" but again - 28 owners aren't about to throw the 29th to the wolves. You never know when you'll need support for something you want, and if you've screwed over someone else in the process, ...

You mean like the one team - Toronto - that was practically waiving the white flag from the day the lockout was announced? The Leafs certainly did not have a great concern for the other teams in the NHL. That said, I don't believe that this issue is comparable. The other 27 teams may well see this as an opportunity to help grow the business, and a stronger NHL is a better NHL.

Regardless, I was trying to illustrate that Balsillie's efforts to get his ducks in a row with respect to moving to Hamilton or K-W isn't likely to be a show stopper when it comes to the BoG approving the sale. There are a lot of other factors at stake.
 

mouser

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Jul 13, 2006
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GHOST, why would you assume that it is Balsillie's side that is leaking the Copps and Competition inquiry matters? I strongly suspect people are making a big mistake assuming that.

I wouldn't be shocked to find out the city of Hamilton is behind it. However I don't think Balsillie and Hamilton are in lockstep. My take is Balsillie is simply using Hamilton for leverage and has a different final destination in mind.
 

Fourier

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Dec 29, 2006
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GHOST, why would you assume that it is Balsillie's side that is leaking the Copps and Competition inquiry matters? I strongly suspect people are making a big mistake assuming that.
I tend to agree. I don't see this as an advantage for Balsillie, at least not right now.
Getting the Competition Bureau mixed up in this could easily work against him.
I really believe that Hamilton is being used as a bargaining chip and as a means
of gaining financial commitment from the Region of Waterloo should the team not remain in Nashville.
 

WalterSobchak

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I am no expert, but considering that the team proposed to be relocated is based in the US (Nashville), and if moved would violate the territorial rights of another team based in the US (Buffalo), and that depends on the bylaws of a sports league headquartered in the US (New York City), it is absurd to think this particular issue would be argued in Canada.

The issue has nothing to do with Nashville as the law would also apply to a theoretical expansion franchise. The "veto" has been implied to come from Toronto and not Buffalo but both franchises can jump on and make it a bi-national lawsuit.

This might not be a fitting arguement but as someone living near the border in BC, Washington state was attempting to build a Power Plant near the Canadian border a few years back and don't quote me on where the pressure legally came from that nixed the plan but Canadian Government did leverage quite heavily with the American Government. The issue was polution to Canadian border towns and there were liberals on both sides of the border fighting against it but to say that the US or Canada won't have a say on the matter is all dependant on political pressure on either side of the border. Considering this involves money, I expect both to be involved in one form or another.
 

SoCalPredFan

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Apr 14, 2007
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All I know, is that the Pred Nation in Nashville is stepping up big time. Even if Balsillie "wants" to move to Hamilton or Waterloo or Timbuktu, there is a LEASE in Nashville that forces the team there. Should the fans drop the ball and provide the "out" by not getting enough fans in the stadium, then so be it ..... but is it possible, just possible, that Balsillie could STAY in Nashville.

Think about it:
--Fans get to 14k tickets, team is now locked in for at least the mid term (next 3-4 years).
--Support continues to swell, team does well, (a la Tampa, Carolina, Anaheim, etc)

Nashville is a viable market. Or, better stated, can be a viable market.

We may very well see the Preds in Nashville for a long, long time (since 2028 at least, when the lease expires).

-t
 

WalterSobchak

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All I know, is that the Pred Nation in Nashville is stepping up big time. Even if Balsillie "wants" to move to Hamilton or Waterloo or Timbuktu, there is a LEASE in Nashville that forces the team there. Should the fans drop the ball and provide the "out" by not getting enough fans in the stadium, then so be it ..... but is it possible, just possible, that Balsillie could STAY in Nashville.

Think about it:
--Fans get to 14k tickets, team is now locked in for at least the mid term (next 3-4 years).
--Support continues to swell, team does well, (a la Tampa, Carolina, Anaheim, etc)

Nashville is a viable market. Or, better stated, can be a viable market.

We may very well see the Preds in Nashville for a long, long time (since 2028 at least, when the lease expires).

-t

absolutely he could buy the team and either be forced by the fans or just good business to stay. In fact if that were the case I am sure he would be just as happy, having the franchise become profitable and then sending it with the intention of lining up first for expansion.
 

GSC2k2*

Guest
However there is one fundamental difference between the NFL and the NHL - unlike the NHL, the NFL did not have exclusive territorial rights where a single team could veto a move unless satisfactorily compensated.

The NFL Rule on relocation and territorial rights (Rule 4.3 of Article IV of the NFL Constitution) that was challenged by Davis under anti trust grounds (LA Memorial Coliseum Commision v NFL) did not require a unanimous vote.



Compensation to the Rams was never an issue argued by the Raiders or the league when the Raiders moved to LA, nor was compensation to the 49ers ever an issue when the team returned to Oakland.

Davis never agrued that "there was no such thing as territorial rights" - he argued that the restriction on franchise moves was a violation of anti trust law. Both Rule 4.3 and the court arguments & decision in LA Memorial Coliseum Commission were silent on the issues of expansion. I do not beleive that the rulings in 1984 had any direct impact on the arguments and jury decision in 2001 that threw out Davis' conspiricy claims against the NFL w.r.t. the LA market - other than by creating a pool of angry owners who were more than happy to try to stick it to Al.

Fair point, kdb. I misspoke on matters that were, however, not germane to my point. My overarching point, however, was that, as a result of challenging the NFL's way of handling franchise moves and sticking himself in where he was not wanted, he wound up with the NFL (indirectly) threatening to drop another franchise in his lap. Which i believe is exactly what Balsillie should be worrying about, if he were to be as foolhardy as to challenge the NHL's policies.

PS - per Bill Daly tonight on the FAN590, the NHL does not have a veto, eitehr; it is majority vote.
 

Fourier

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Dec 29, 2006
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The franchises are already worth more. The bid itself did that. Balsille being approved as an owner makes no difference either way in franchise values..

I see this differently. I agree that the bid itself is a factor, but if it is turned down
there is a potential negative.

As I see it, there are two main reasons for someone to put up $200 mil for an NHL franchise:

1) They see it as a profitable business venture
or
2) they have a deep passion for the game and
want to be an insider.

In fact, those falling in the first group are likely also somewhat in the second and those in the second group are generally not willing to go broke following the dream.

There are very few teams today that should they decide to sell could count on local
ownership to pay the kind of money we are seeing for a franchise. This means looking for potential outside buyers must be an option or the investment is highly risky. Struggling franchises would have trouble attracting the first type of owner unless the option to move the team is availble if things don't turn around. Owners in the second group are very likely to want to have the team located somewhere close by. If it is not, then it is unlikely that they would be willing to sustain losses for long. Again the potential for relocation would be highly desirable.

It certainly seems that Balsillie is paying a premium for the Preditors to gain flexibility with respect to the long term location of the franchise. If the NHL says no outright
to Balsillie then this is a clear message that this flexibility is off the table. I think that
this would have a significant negative effect on the pool of potential franchise owners. A corollary would be that prices also decline.

All of this is a delicate balancing act. The BoG should be VERY careful in granting any franchise the right to relocate. Host cities deserve a chance to protect their investment. (If Nashville rises to the challenge then the Preds should stay). However,
the potential to relocate needs to be there.
 

SoCalPredFan

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Apr 14, 2007
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Portland, OR
I see this differently. I agree that the bid itself is a factor, but if it is turned down
there is a potential negative.

As I see it, there are two main reasons for someone to put up $200 mil for an NHL franchise:

1) They see it as a profitable business venture
or
2) they have a deep passion for the game and
want to be an insider.

In fact, those falling in the first group are likely also somewhat in the second and those in the second group are generally not willing to go broke following the dream.

There are very few teams today that should they decide to sell could count on local
ownership to pay the kind of money we are seeing for a franchise. This means looking for potential outside buyers must be an option or the investment is highly risky. Struggling franchises would have trouble attracting the first type of owner unless the option to move the team is availble if things don't turn around. Owners in the second group are very likely to want to have the team located somewhere close by. If it is not, then it is unlikely that they would be willing to sustain losses for long. Again the potential for relocation would be highly desirable.

It certainly seems that Balsillie is paying a premium for the Preditors to gain flexibility with respect to the long term location of the franchise. If the NHL says no outright
to Balsillie then this is a clear message that this flexibility is off the table. I think that
this would have a significant negative effect on the pool of potential franchise owners. A corollary would be that prices also decline.

All of this is a delicate balancing act. The BoG should be VERY careful in granting any franchise the right to relocate. Host cities deserve a chance to protect their investment. (If Nashville rises to the challenge then the Preds should stay). However,
the potential to relocate needs to be there.


Wow, I agree with this 100%

As a former Nashvillian and die hard Preds fan, my heart clings to the possibility that the Preds Fan and corporate supporters rise to the challenge and prove that Nashville is a viable market.

But, I agree, the "ability" to relocate should that not pan out should be available to an outside owner. That seems fair to both parties, really.

-t
 

mudcrutch79

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I don't like to play the "I have a law degree" card just for ***** and giggles, and I don't think that it's the end all and be all in legal discussions - there are people without law degrees working in specific areas who know more about the law as it relates to that specific area than I ever will. I don't want to have some huge moronic pissing contest about this but a lot of what you're saying doesn't pass the smell test. At the very least, I'd think that it'd be subject to some caveats.

If the League By-Laws require any lawsuit to be filed in the U.S., then any lawsuit must be filed in the U.S. Period.

I'm kind of on board with this, at least insofar as it relates to choice of forum, if not choice of law. That said, I have a harder time thinking that you can contract out of Canadian competition law, which is what you're effectively suggesting. Contract law, at least in Canada, is always subject to the law of the land. If you're an expert in jurisdictional law, I'll defer to you on this point and I'm too lazy to research it at the moment, but I've got serious difficulties in thinking that Canadian law is simply irrelevant in a situation like this. This isn't like choosing what state's law will govern a transaction. Otherwise, you'd think that NHL teams would agree that all of their disputes would be subject to the law of Russia, or some state where there is no competition law and then just do whatever the **** they wanted.

When purchasing a team, prospective owners must sign various papers - one of which is a document stating that the prospective owners agrees to abide by all of the By-Laws. Balsille won't be able to sign that paper, then claim "Oh - I didn't know that provision was there" or "Hey - that's not fair, I don't like it ... I want it thrown out." It's an "all or nothing" deal, and considering the NHL is a privately-controlled entity, it can choose who gets to own a team and under what conditions.

Sort of. It gets to choose who owns a team, sure. As for the conditions, those are of course subject to the law of the land. In Canada, at least, an illegal contract is unenforceable. If there are provisions on relocation that contravene the Competition Act, than they're out of the contract.

See above. Even though Citibank may have offices in all 50 states and in countries around the world, the "terms and conditions" you get when you sign up for one of their credit cards clearly states that if you decide to file a lawsuit against the company, it must be filed in ____ location. You get a card, you agree to that provision. It's that simple - which ... again, if the League By-Laws spell out where a lawsuit is to be filed, reduces any discussions about it to trivial ones.

You're confusing choice of forum and choice of law again. There's a distinction. From my experience with those sorts of things, they generally contain a provision that says anything inconsistent with the laws of the province where the person lives are void. Of course, that's not a great analogy here because the policy considerations in adhesionary contracts are different than something like this.

Re-read my comments ... the lease would in fact be a separate issue - one that would have to be argued in the U.S. since the dispute would be originating from there. You can't rent from a landlord in Maryland, move to Texas, and then sue your landlord there - the dispute took place in Maryland, so that state has jurisdiction.

Sure, the lease is a separate issue. The litigation relating to the lease has nothing to do with any potential litigation relating to the NHL. I see no reason why he couldn't sue to be let out of his lease in Nashville while simultaneously challenging the NHL's policies in Ontario. There's no connection between the two.

Disagree all you want - the fact is, if the NHL spells out where lawsuits must be filed, any ruling by the CCB will carry little if any weight in a U.S. court for the reasons I described above.

Again, I disagree with you here. If you're a lawyer or someone with expertise in jurisdictional issues, by all means say so. I just did a CanLii search and found many Canadian decisions discussing the application of foreign law in Canada, in situations where it was appropriate to do so. In Canada at least, you plead the foreign law and then prove it. If there are American lawyers who can share the procedure there, by all means do so.

The question is whether or not Buffalo's market is infringed. Even if the destination is Canada, the originating and affected markets are in the U.S., and as such a U.S. court would have every ability to make a ruling on whether or not Buffalo's market was harmed in any move.

Again, and I say this with the greatest of respect, I think that you're out of your depth on this. I acknowledge that I'm out of my depth as well, by the way - I'm not trying to be a dick. There are issues relating to sovereignty at play here - in determining whether Buffalo's market is infringed, you need to ask whether the NHL's provisions are legal. That question necessarily involves a consideration of both Canadian and American law, as part of the territory lies in Canada. Assuming, for the sake of argument, that the Competition Bureau were to say that the rules violate the Competition Act, I would assume that, if the dispute were handled in the US, Balsillie's people would plead that the rules are in violation of Canadian law and, thus, unenforceable insofar as they relate to Canada.

Now, I don't even know the legal effect of a ruling from the Competition Bureau in Canada, whether it's law in the sense of a judgment or subject to challenge or what so there are a lot of open questions here. I think that goes for everyone in this discussion though and for anyone to be making blanket statements is a bit much.
 

Ted Hoffman

The other Rick Zombo
Dec 15, 2002
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This is one of those rare times I really wish I had a copy of the League's By-Laws, because I'm certain they spell out a lot of this.

Without responding to all 23 (or however many it is - I'm not splitting them all out) of your points, I think you're going to be shocked and disappointed when you find out that even if the CCB decides against the NHL on everything fathomable, it's not going to hold water in much (certainly the early part, which is going to be the most significant) of any proposed move from a U.S. market to a Canadian market. Any factor that they're going to rule on is going to be at best secondary, and I bet it becomes completely moot long before then.

In fact, I'll bet that before Balsille (or any other prospective owner) gets approval from the Board of Governors, the NHL gets his signature on a document setting forth a list of legally binding terms in exchange for approval of the sale of the franchise (one of which is that he agrees to abide completely and fully with the League's By-Laws in their entirety) and states that he agrees to those terms in exchange for such approval; in that document, it'll even state that he agrees not to be a party in any legal action (whether directly or indirectly) against the NHL or any of its member Clubs for any reason at any time, and the potential penalties he faces for breaching the agreement - one of which will include forfeiture of the Club.

The NHL isn't full of lawyers who got their degrees from Cracker Jack U., they'll have every conceivable angle covered so there's no way Balsille or anyone else can cry 'foul' after the fact - and it'll all be completely legal. But if you think Balsille, the CCB, or Canadian courts can pull and end-around to get what they want, NHL By-Laws be damned, ... :lol:
 
Last edited:

mudcrutch79

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...I bet it becomes completely moot long before then.

This, I agree with although the fact that you've just decided that you're above commenting on the substantive portion of my post kind of makes the point I was driving at anyway in terms of your capacity to have a strong opinion on the jurisdictional issues raised here. I think Balsille is trying to stir the pot and create some leverage.

In fact, I'll bet that before Balsille (or any other prospective owner) gets approval from the Board of Governors, the NHL gets his signature on a document setting forth a list of legally binding terms in exchange for approval of the sale of the franchise, and states that he agrees to those terms in exchange for such approval; in that document, it'll even state that he agrees not to be a party in any legal action (whether directly or indirectly) against the NHL or any of its member Clubs for any reason at any time, and the potential penalties he faces for breaching the agreement - one of which will include forfeiture of the Club.

Are you a lawyer? Do you think what you're suggesting is legal? ****, I'd suspect that even trying to make that a condition of a sale would raise competition law issues.

The NHL isn't full of lawyers who got their degrees from Cracker Jack U., they'll have every conceivable angle covered so there's no way Balsille or anyone else can cry 'foul' after the fact - and it'll all be completely legal. But if you think Balsille, the CCB, or Canadian courts can pull and end-around to get what they want, NHL By-Laws be damned, ... :lol:

Nope, and their lawyers will advise them "You're probably going to have a tough time making parts of this stick." They'll weigh the advice that they get from their lawyers and they'll weigh the $220MM that Balsille has on the table.

Lawyers, even the smartest ones, aren't miracle workers. The law is what the law is and sometimes what the lawyers have to tell the business people is not what the business people want to hear. There's some things that you can't do, even with brilliant lawyers. I'm not saying that this is such an occasion and I'm not saying that it isn't; I am saying that it's considerably more complex than you're making it out to be, it involves issues that you aren't considering and the entire discussion is beyond your (and, I can't emphasize enough, my own) expertise.
 

Jonjmc

Registered User
Feb 7, 2006
1,498
1
I see this differently. I agree that the bid itself is a factor, but if it is turned down
there is a potential negative.

As I see it, there are two main reasons for someone to put up $200 mil for an NHL franchise:

1) They see it as a profitable business venture
or
2) they have a deep passion for the game and
want to be an insider.

In fact, those falling in the first group are likely also somewhat in the second and those in the second group are generally not willing to go broke following the dream.

There are very few teams today that should they decide to sell could count on local
ownership to pay the kind of money we are seeing for a franchise. This means looking for potential outside buyers must be an option or the investment is highly risky. Struggling franchises would have trouble attracting the first type of owner unless the option to move the team is availble if things don't turn around. Owners in the second group are very likely to want to have the team located somewhere close by. If it is not, then it is unlikely that they would be willing to sustain losses for long. Again the potential for relocation would be highly desirable.

It certainly seems that Balsillie is paying a premium for the Preditors to gain flexibility with respect to the long term location of the franchise. If the NHL says no outright
to Balsillie then this is a clear message that this flexibility is off the table. I think that
this would have a significant negative effect on the pool of potential franchise owners. A corollary would be that prices also decline.

All of this is a delicate balancing act. The BoG should be VERY careful in granting any franchise the right to relocate. Host cities deserve a chance to protect their investment. (If Nashville rises to the challenge then the Preds should stay). However,
the potential to relocate needs to be there.


I understand this point, but I dont think the message being sent by not approving Balsille is that relocation is off the table. I believe the message is relocation to anywhere the NHL doesnt approve is off the table. I believe this is an important distinction. Removing the threat of relocation entirely would put a club in a difficult position in terms of things like public arena financing.

They didnt seem to have a problem with relocation of the Pens to KC, at least not publicly. And if the expansion rumors are to be believed, then KC is being rewarded for playing the game that the NHL wanted them to play.

I freely admit that I am just trying to connect the dots like anyone else and my take on all of this could be completely wrong. The lack of any real facts in this whole situation makes even educated guesses difficult.
 

Ted Hoffman

The other Rick Zombo
Dec 15, 2002
28,859
8,113
... although the fact that you've just decided that you're above commenting on the substantive portion of my post kind of makes the point I was driving at anyway in terms of your capacity to have a strong opinion on the jurisdictional issues raised here. I think Balsille is trying to stir the pot and create some leverage.
Actually, I chose not to respond to the "substantive portion of my post" because I really didn't feel like spending 45 minutes cutting and pasting a response to everything you said. However, I'm sure gs will be along later to oblige you if you'd like.

Are you a lawyer? Do you think what you're suggesting is legal? ****, I'd suspect that even trying to make that a condition of a sale would raise competition law issues.
I thought about that - I'm sure some of that stuff would be in the League By-Laws (which Balsille would have to agree to abide by as part of being approved) - which means that a court would have to strike down part of the By-Laws as being illegal; considering the NHL is a private entity, there's no way in hell that's going to happen.

And thus, my post was edited.

So you're right - they won't have to spell it all out in the agreement and risk a court getting involved. It'll simply be covered in the League By-Laws, and accepting the By-Laws in their entirety will be a mandatory requirement of being approved by the Board of Governors ... thus effectively putting any resulting dispute with the league out of the hands of any court to decide. Of course, I'm sure you'll say "... and the courts will still be able to rule on it" but as I said ... I guarantee the NHL will have every 'i' dotted and 't' crossed to prevent a new owner from racing to the courts when they don't get what they want.

And if the NHL says, "sorry - you're not in" do you think Balsille will have legal standing to go run to the courts and claim that the conditions asked of him were unfair and onerous? Again ... the NHL is a private entity - they can decide who will and who won't own an NHL team, and whether or not it's going to move. They can shoot this proposal down in June, and there's not a damn thing anyone can do to overturn it - which is why it really behooves everyone on the outside looking in to play by the NHL's rules, whether they like it or not.

Nope, and their lawyers will advise them "You're probably going to have a tough time making parts of this stick." They'll weigh the advice that they get from their lawyers and they'll weigh the $220MM that Balsille has on the table.

Lawyers, even the smartest ones, aren't miracle workers. The law is what the law is and sometimes what the lawyers have to tell the business people is not what the business people want to hear. There's some things that you can't do, even with brilliant lawyers. I'm not saying that this is such an occasion and I'm not saying that it isn't; I am saying that it's considerably more complex than you're making it out to be, it involves issues that you aren't considering and the entire discussion is beyond your (and, I can't emphasize enough, my own) expertise.
:rolleyes: I didn't realize I was supposed to be quoting chapter and paragraph in everything here - if we were to start down that road, everyone else (save gs and maybe a couple of others) would be utterly and completely bored to tears. However, I stand by my assertion that there's not nearly the wiggle room for non-owners that you'd like to think there might be - and that any agreement signed with the NHL as part of purchasing a team will be more than sufficiently ironclad enough to stand up in any court of law.
 

FissionFire

Registered User
Dec 22, 2006
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The thing really lost here is that no matter what happens in Canada, if a U.S. court makes a ruling then Balsille will have to abide by it if he wants to do business in the United States. He can't simply thumb his nose at the judgements and expect to be allowed to bring his team into the US can operate as a business (play games) if he's willingly ignoring the ruling. It's also possible that if he crossed the border he'd get arrested for contempt.
 

WalterSobchak

Blues Trololol
Mar 11, 2004
11,659
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Where men chunder
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And if the NHL says, "sorry - you're not in" do you think Balsille will have legal standing to go run to the courts and claim that the conditions asked of him were unfair and onerous? Again ... the NHL is a private entity - they can decide who will and who won't own an NHL team, and whether or not it's going to move. They can shoot this proposal down in June, and there's not a damn thing anyone can do to overturn it - which is why it really behooves everyone on the outside looking in to play by the NHL's rules, whether they like it or not.

I would love to see what happens if the NHL franchise trying to sell the franchise to someone (Balsille for example in this instance) is veto'd by the league. I imagine the NHL has all their "I's dotted and T's crossed" in this regard...hopefully better than the latest CBA...but you have to figure there is some concern with NHL franchise owners getting large offers for their franchise and having it nixed by the League.

I'd love someone who has the answers to that for sure because the NHL (as any other sports league is) is an interesting society of conflicting interests.
 

Fourier

Registered User
Dec 29, 2006
25,444
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Waterloo Ontario
I understand this point, but I dont think the message being sent by not approving Balsille is that relocation is off the table. I believe the message is relocation to anywhere the NHL doesnt approve is off the table. I believe this is an important distinction. Removing the threat of relocation entirely would put a club in a difficult position in terms of things like public arena financing.

They didnt seem to have a problem with relocation of the Pens to KC, at least not publicly. And if the expansion rumors are to be believed, then KC is being rewarded for playing the game that the NHL wanted them to play.

I freely admit that I am just trying to connect the dots like anyone else and my take on all of this could be completely wrong. The lack of any real facts in this whole situation makes even educated guesses difficult.

The KC situation is an interesting twist. However, I am not sure that someone like
Balsillie would see this to be an attractive alternative given the fact that there
are local interests in KC that could make a move very complicated.I guess my real point is that the NHL needs to be careful about how much control it exercises in managing a franchise in trouble. As the value of these franchises increase individual
owners will demend much more say in what happens to their investment.
 

Wetcoaster

Guest
This is one of those rare times I really wish I had a copy of the League's By-Laws, because I'm certain they spell out a lot of this.

Without responding to all 23 (or however many it is - I'm not splitting them all out) of your points, I think you're going to be shocked and disappointed when you find out that even if the CCB decides against the NHL on everything fathomable, it's not going to hold water in much (certainly the early part, which is going to be the most significant) of any proposed move from a U.S. market to a Canadian market. Any factor that they're going to rule on is going to be at best secondary, and I bet it becomes completely moot long before then.

In fact, I'll bet that before Balsille (or any other prospective owner) gets approval from the Board of Governors, the NHL gets his signature on a document setting forth a list of legally binding terms in exchange for approval of the sale of the franchise (one of which is that he agrees to abide completely and fully with the League's By-Laws in their entirety) and states that he agrees to those terms in exchange for such approval; in that document, it'll even state that he agrees not to be a party in any legal action (whether directly or indirectly) against the NHL or any of its member Clubs for any reason at any time, and the potential penalties he faces for breaching the agreement - one of which will include forfeiture of the Club.

The NHL isn't full of lawyers who got their degrees from Cracker Jack U., they'll have every conceivable angle covered so there's no way Balsille or anyone else can cry 'foul' after the fact - and it'll all be completely legal. But if you think Balsille, the CCB, or Canadian courts can pull and end-around to get what they want, NHL By-Laws be damned, ... :lol:

Under the Competition Act dealing with foreign directives:
46. (1) Any corporation, wherever incorporated, that carries on business in Canada and that implements, in whole or in part in Canada, a directive, instruction, intimation of policy or other communication to the corporation or any person from a person in a country other than Canada who is in a position to direct or influence the policies of the corporation, which communication is for the purpose of giving effect to a conspiracy, combination, agreement or arrangement entered into outside Canada that, if entered into in Canada, would have been in contravention of section 45, is, whether or not any director or officer of the corporation in Canada has knowledge of the conspiracy, combination, agreement or arrangement, guilty of an indictable offence and liable on conviction to a fine in the discretion of the court.

The CCB has the authority on its own account to investigate matters pertaining to its mandate. It does not matter what the NHL bylaws say, the CCB can determine that the policy, practise whatever is anti-competitive regardless of what NHL owners may have agreed to.


The NHL has already responded to pressure from the CCB previously on this matter. The issue now is whether or not Bylaw 36 actually cured the anti-competitve practise as the NHL contends.
However, sources told the Post the Competition Bureau is reviewing a section of the NHL's constitution that deals with the "territorial rights" of the league and its member clubs.

According to Article 4.1 of the league's constitution, "each member shall have exclusive territorial rights in the city in which it is located and within 50 miles of that city's corporate limits," known as the club's "home territory."

Section 4.2 of the NHL's rules sets out an absolute prohibition over the proposed relocation of existing franchises by declaring that "No member shall transfer its club and franchise to a different city or borough."

Section 4.3 also grants each team exclusive control over its "home territory," and each club can prohibit hockey games from being played in its "home territory" without their consent.

More importantly, section 4.3 states that "no franchise shall be granted for a home territory within the home territory of a member, without the written consent of such member." In other words, existing hockey teams have the individual right to veto the relocation of other clubs within an 80-kilometre radius of their own market.
...............
According to insiders, the competition bureau is reviewing whether the territorial rights and vetoes ascribed to the league and its individual members in its constitution contravene civil sections of the Canadian Competition Act that deal with abuse of dominant position and market restriction provisions. The watchdog is attempting to determine whether the NHL and its member teams are engaged in anti-competitive practices that substantially lessen competition in a market, or, are likely to do so.

In July, 2006, the bureau launched a similar investigation into the NHL's relocation practises and expressed interest in "how those procedures might be applied with respect to a proposed relocation to southern Ontario," sources say.

However, after meeting with NHL officials to discuss the territorial rights, the watchdog discontinued its probe and recommended against further action last December.

According to insiders familiar with events, the bureau made the decision because the NHL provided written assurance that while "relocations generally had required a unanimous board vote," the league has enacted bylaw 36 in response to a series of U.S. court decisions in the 1980s that ruled sports league franchise relocation rules were in violation of American anti-trust laws.

The NHL's bylaw 36 deals with transfer of locations outlined in section 4.2 of the league's laws and provides that in the event that a specific proposed relocation raised anti-trust or competitive concerns, the issue could be determined by a majority vote of the league's board of governors.

Apparently, the competition bureau decided that if the NHL were to confirm in writing its position that a proposed move to Southern Ontario would be subject to a majority vote - not a unanimous one - it would discontinue its investigation and recommend against further action.

The NHL complied and the governors were told on Dec. 4, 2006 that the matter was closed.

However, sources say Mr. Balsillie's ill-fated attempt to purchase the Pittsburgh Penguins and transfer the club renewed the watchdog's interest in the NHL's relocation practices.

Mr. Balsillie withdrew his US$175-million offer to purchase the money-losing Penguins on Dec. 19 after the NHL tried to impose a series of 11th-hour conditions on the sale of the team, including a clause that would have prevented him from moving the Penguins for at least seven years.

According to insiders familiar with the competition watchdog's current inquiry, the regulator is now attempting to assess whether bylaw 36, which is intended to cure the NHL's anti-competitive practises, is in effect a veto all but in name.

There is no doubt the CCB has the reach and jurisdiction to deal with these matters.
 

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