Phoenix bankruptcy/ownership Part XVIII: Is that a pale horse in the distance?

[PeaSouper]

This also kills the Buffalo TV market. How do you regain that for the NHL?

But if the Buffalo/Rochester keeps shrinking and in absolute terms fewer and fewer people live there, the market becomes less and less significant.

I'm from Buffalo and live in Austin. There's a reason Austin isn't on the radar for a major sports team. The Icebats couldn't afford to keep playing. Sure the Stars are moving a farm team here, but we'll see how that goes. The arena is way out leander way a lovely hour+ long traffic jam away from the city itself.

I'm not trying to say that Austin should have a major sports team - the joke around here, of course, is that we do have a pro football team, except they play on Saturdays. The City of Austin will never do anything that threatens the Longhorns. Hell, that's why that AHL arena got built out in Cedar Park.

This is neither here nor there - the point that I was making is that when you say that the Buffalo is much larger than it appears because of nearby Rochester, the same can likely be said for every potential destination for an expansion or relocated pro sports team - i.e. Hamilton, which has only 700,000 in its statistical metro area, but is in a larger market of roughly 10 million.

Buffalo is making money. It's profitable. Why would you move a profitable team that's making money? Why would you move a team into direct competition into a market you know can't support two teams. There's no *reason* to move the Buffalo franchise to Hamilton.

You might want to spend some more time on thinking about it.

Buffalo is fine today. The fact is, though, the market is on a trend towards being not fine as far as having two major pro sports teams go. Like I said earlier, it's debatably the smallest market in North America with two pro sports teams.

If you're of the opinion that the "Golden Horseshoe" market of ten million or so people can't support two NHL teams, I think you're in the minority. While many people in this debate are anti-Balsillie for one reason or another, I've yet to hear one of them justify their objection by seriously suggesting that the Southern Ontario market cannot support two NHL teams.

 

[popaclay]

It is about time!

http://www.thestar.com/sports/hockey/article/694707

 

[New User Name]

I'm sure I've read that the lease in Glendale is one of the best in the league.
The worst thing about it is the "out" clause(s)

Then why did Daly say it's not workable if they have every intention to find a buyer to keep the Yotes in AZ.

I'll suggest it's only not workable if they want an out.

Does anyone know who holds the bonds for the arena?

 

[Wetcoaster]

I'm sure I've read that the lease in Glendale is one of the best in the league.
The worst thing about it is the "out" clause(s)

Then why did Daly say it's not workable if they have every intention to find a buyer to keep the Yotes in AZ.

I'll suggest it's only not workable if they want an out.

Please no logic. It does not accord with the Balsilliephobes want to believe.

 

[kdb209]

It is about time!

http://www.thestar.com/sports/hockey/article/694707

And as was pointed out when this was spun earlier - a theoretical veto is not sufficient, it must be proved to be actually used - just as Judge Baum has stated.

Taylor would not go so far as to say the Competition Bureau would definitely investigate the Coyotes case.

"We have to be presented with an anti-competitive act, not the possibility of an anti-competitive act," he said.

"We can't go off pre-emptively and stop something that hasn't happened yet just because it may happen, just because the Leafs say they have a veto, and just because many people believe they will exercise it. We have said and continue to say that if a veto is exercised that effectively blocks a team coming into another team's territory, we will look at it and that includes using all our powers to investigate it and determine whether it violates our act."

So, basically nothing has changed from the CCBs POV since their last investigation - unless a definitive smoking gun of a Leafs veto can be proven. Nothing shown so far rises to that level.

 

[Lorenzo1000]

It is about time!

http://www.thestar.com/sports/hockey/article/694707

If the Leafs abstained from voting on Balsillie's application how could they have used this "supposed veto"?

 

[Fourier]

I have been looking for the links. Not found yet. More than one quote that I have read over time and they were on the web. They were owner interviews and opinions, not stats. Also personal observation. From casual observation, the major population centers like NY and LA are quicker. Also, competitive success hastens acceptance (again observation).

Take a look at the teams in the league right now that began in their current cities after 1966. Then try and see if you have a feel for when they established a firm foot hold in their markets. How many of these took 30 years?

 

[Wetcoaster]

And as was pointed out when this was spun earlier - a theoretical veto is not sufficient, it must be proved to be actually used - just as Judge Baum has stated.



So, basically nothing has changed from the CCBs POV since their last investigation - unless a definitive smoking gun of a Leafs veto can be proven. Nothing shown so far rises to that level.

Actually it could be less than that.

If the CCB believes that the rejection of Balsillie was not for a legitimate NHL business purpose but was done to avoid a showdown with MLSE that may well constitute the act that effectively blocked the relocation to Hamilton.

The prior opinion notes:

(T)he Bureau recognizes that properly circumscribed restrictions on the relocation of sports franchises imposed by the NHL and other professional sports leagues serve legitimate interests, such as preserving rivalries between teams, attracting a broader audience, providing new franchises with an opportunity to succeed and encouraging investment in sports facilities and related infrastructure by local municipalities. The Bureau concluded that the policies implemented by the NHL were in furtherance of such legitimate objectives and did not constitute a practice of anticompetitive acts.
...
The Bureau's inquiry focused upon the ownership transfer and relocation policies of the NHL and the application of these policies in the particular circumstances of the proposed Nashville Predators transaction. In short, the Bureau found that, in the present circumstances, the NHL policies were not applied in furtherance of a predatory, exclusionary or disciplinary purpose. Rather, such policies were implemented in furtherance of the legitimate business interests of the NHL.

Thus an act that is cloaked a legitimate business interest but in fact was applied in furtherance of a predatory, exclusionary or disciplinary purpose could be subject to scrutiny. In other words the CCB is entitled to look at what underlies the act to determine if effectively it was veto.

The opinion also notes:

The Bureau determined that a non-relocation covenant would not raise concerns under the Act where the predominant purpose of such a covenant is not to limit or prevent competition, but to ensure that the owner is committed to promoting the franchise within the local community.

There well may be sufficient evidence that the promotion of "the franchise in the local community" has passed the stage where a reasonable business person could see any hope of carrying on with a reasonable expectation that the enterprise will be profitable at some point in the foreseeable future. Jerry Moyes says it is not possible and one would have to give some deference to his opinion on this point. It is little wonder than Bettman reacted so vehemently to his comments.

Further on the relocation issue the CCB says:

The Bureau found no instance where a "veto" was exercised by an incumbent team to protect its local territory from entry by a competing franchise. Since at least 1993, no franchise has been permitted to exercise a veto to prevent a team from entering into its local territory. Further, under the NHL's rules and procedures, in respect of the proposed relocation of a franchise to Southern Ontario, the NHL would not permit any single team to exercise a veto, but would only require a majority vote. The Bureau may have concerns under the Act if a single team were entitled to exercise a veto to prevent a franchise from entering into its local region within Canada, but such concerns would have to be evaluated having regard to the facts and law applicable at the time such an event occurred.

This comes back to my point of a de facto or disguised veto. Note the wording "entitled to exercise a veto to prevent a franchise from entering into its local region within Canada". In this case MLSE seems to be of the opinion that it is entitled to do so.

One way to ameliorate this issue for the NHL would be to remove the veto clause entirely from its Constitution.

Somehow I cannot see MLSE agreeing to this and I understand that it would require a unanimous vote to remove the veto.

IMHO the smoking gun need not be MLSE actually using its veto.

 

[Major4Boarding]

I wish Rogers would pick that up. I'm guessing the Leafs would be against it

I miss Empire.

 

[Wetcoaster]

If the Leafs abstained from voting on Balsillie's application how could they have used this "supposed veto"?

Vote it down or we file a lawsuit challenging your ability to grant the relocation to Hamilton request?

Does the BOG really want to go to war with MLSE (and maybe the Sabres) on this issue or is it better to reject Balsillie on other grounds gambling that he will have a difficult time challenging what they have done?

The question is given what the NHL knows about Hamilton as amarket and its asset and revenue generation value, why would you not have franchise there? The evidence tendered in Phoenix makes it clear that Hamilton would be a top five team immediately.

That has to raise red flags for a competition watchdog.

Maybe it is time for a Commons Committee to open hearings on this matter and compel witnesses under oath and compel production of documents from the NHL.

 

[Fugu]

I'm pulling admin privilege here (I think I deserve it after putting up with 18 of these threads, and counting......).....

I have to leave, but the next thread is on me, so I'll close this one at just shy of 1000.