Phoenix Bankruptcy Part XX: There Will Be Baum

[billy blaze]

Bill Daly at Washington Capitals fan forum- if Balsillie finds front door BOG might vote again

http://video.yahoo.com/watch/6076291?fr=yvmtf

kudo to Puck Daddy

 

[PeteZaTheHutt]

The NHL doesn't need a rich man to run a team in Southern Ontario, anybody can fill that role. They need a rich man to operate in a struggling market.

The problem is that rich men do not become rich by operating in a struggling market in the first place. They became rich by avoiding such a scenario. This is why people aren't "lining up around the block" to buy the Coyotes.

 

[KevFu]

Your argument, while common and not wrong on the surface completely ignores the past relationship between the two combatants... others assume it was Bettman's unwillingness to put a team in Hamilton and others may have different opinions. Neither position is absolutely provable until they both write their memoirs IMO.

Another fact is that the NHL is the only game in town. They have the Stanley Cup. IMHO they need an extremely strong argument to refuse membership or location requests. I haven't heard one yet.

Why not give Balsillie a Hamilton Franchise when it became apparent he wanted one years ago? I doubt money was an object. Last I heard Balsillie has 8 or 9 times as much wealth to call upon as the value of the leagues most valuable franchise. Businessmen make deals. Why wouldn't Bettman all those years ago when they had already accepted Balsillie as a member?

This is the question that isn't answered when one rails about the today and ignores the past. One of the flaws with the 'we get to pick who and where' argument.

Hamilton is a no-name city in a foreign country. How much would ESPN or NBC pay to cover a cup final that Hamilton was favoured to win or even a playoff series. That's the answer.

I don't think it ignores the past relationship at all. Even if the two of them were lovers, you simply have to fight JB's methods of acquiring a team thru bankruptcy. Justifying those means with "there's no other way to get a team in Hamilton" is a very narrow view.

Why does GB oppose a team in Hamilton? I don't know. I don't even know that he does. How many times do key players need to say "This isn't about Phoenix vs Hamilton" before people actually believe it?

Hamilton has submitted one bid to the NHL for expansion while the NHL was accepting bids under Bettman's tenure, and it did not have an owner attached. Hamilton's previous attempts were not under GB's tenure at all (Ottawa and Tampa were selected of Hamilton in December of 1990).

Is his "unwillingness" based out of contempt, or opposition to Hamilton as a market? Or is it merely a matter of timing and the desire to give every current market the chance to survive before accepting relocation?

Since GB has fought to keep EDM, OTT, BUF, PIT, NAS and now PHX, NYI where they are, it appears that those motives for denying NAS/PIT relocations is merely based on "stay put unless there's no local ownership and the arena situation is woeful."

Phoenix is the most ripe to move. Personally, I think he actually could have been successful moving PHX to HAM if he didn't go the bankruptcy route.

Pittsburgh has a long history. Their fans support them (how many straight sell outs?). Bettman said "All they need is a new arena. No reason to move."
Nashville hasn't had the opportunity to establish themselves yet, and Bettman wanted to give them the opportunity to do so. They needed an owner, but can be financially viable.

Phoenix? All JB had to say is "Look, I want to buy a team and move them to Hamilton. Look at the Coyotes. They are hemorrhaging cash, they lose ridiculous sums of money. You've already fronted them millions. And they are on their third owner. The TV ratings suck, they are contributing virtually nothing to the league but embarassing our best player."

The NHL's arguments for keeping a team in Phoenix, outside of JB's current means, would be EXTRAORDINARILY WEAK. But now, even if the NHL wants the Coyotes in Hamilton, they still have to fight the means by which JB is trying to get them there.

 

[Peter Puck]

I do not understand this - if he was granted an expansion team he would gladly pay 279M - right now he has offered 242M for the team, plus 50M to the NHL plus 50M to Glendale, etc - an expansion team would be a much cheaper way to go at 279M. As for the procedure - suck it up and chalk it up to experience - learn from the situation and move on.

The NHL wants $279 million in addition to the cost of a team. The team costs something like $140 million. They feel someone will pay something like this amount for a team in Phoenix or maybe Kansas City or Vegas. They feel they can get someone to pay an additional $279 million (suddenly I'm thinking maybe it was $179 million?) for the right to play in Hamilton. Balsillie's bids are not in the same ballpark range as the NHL feels they can get. Also I don't think the 50 million to Glendale is in addition to the $242 million.

 

[KevFu]

However as a secured creditor the NHL stands to recoup its money.

It's a loan. Moyes owes them that money. Getting it back isn't screwing over Moyes.

If anyone is screwing anyone in this situation, it's Moyes trying to screw over all his creditors.

 

[KevFu]

Well gee if I had bailed out the Bettman when the then Phoenix owner(s) wanted out I wouldn't appreciate it too much if Bettman et al spun that a money losing business lost more money because of my management of it. I'd be PO'd man. Dm Straight Bettman covered some of those losses while the guy waited patiently for him to find a new owner. I've read many posts where posters claim that when Moyes filed he just beat Bettman to the punch since he was just about to take the team over and leave Moyes with nothing. Even now he begrudgingly offers the man a pittance and Gretzky even less only because the Judge strongly hinted his bid was deficient.

OTOH if Moyes is such a terrible owner then that just goes to show how poor Bettman's judgement is at picking owners. Kinda puts the lie to his assessment of Balsillie. Of course it could be that a desperate Bettman sucked Moyes in.

As I said would you buy a new or used NHL franchise from this guy?
Governments might have to concoct a 'Lemon Law' for sports franchises after this fiasco from Phoenix.

I find this delusional.

Moyes is getting screwed by the NHL because Moyes bought the team, lost money, then the NHL claimed that Moyes ran the team into the ground?

The team's lost how many millions of dollars? How many millions of that are Moyes' expenses paid to his own travel company which far excede the Western Conference Average? How many are for office space from a building Moyes owns when Jobing.com Arena has ample space for team personnel?

What do you call a spade?

Bettman "begrudgingly offers the man a pittance" only because... MOYES violated league rules and put the team into bankruptcy! Bettman isn't making an offer if Moyes doesn't put the sale of the team in the hands of a bankruptcy judge and leave Bettman no choice. And the offers, by both the NHL and JB, are so low because Moyes actions severely damaged the value of the franchise.


Using the logic of "if Moyes is a bad owner, Bettman sucks at picking owners" doesn't work, either. You could also logically reason that if Moyes and other crappy owners passed the NHL's test to be come owners, how horrific would JB be, because it's obviously not a very selective process.


And look, I'm all formoving Phoenix to Hamilton (provided Buffalo is protected). Just not via these means.

 

[KevFu]

The NHL wants $279 million in addition to the cost of a team. The team costs something like $140 million. They feel someone will pay something like this amount for a team in Phoenix or maybe Kansas City or Vegas. They feel they can get someone to pay an additional $279 million (suddenly I'm thinking maybe it was $179 million?) for the right to play in Hamilton. Balsillie's bids are not in the same ballpark range as the NHL feels they can get. Also I don't think the 50 million to Glendale is in addition to the $242 million.

The findings of JB's "expert" for relocation fees is a complete and total joke.

Anaheim paid $25 million for entrance to the LA market in 1993. So he just added inflation and divided by two.

Why divide by two? If anything, it should be multiplied by two because you're infringing on two teams and doing more damage to more teams than entering a market served by one team.

And there's precedent. The Islanders paid $4 million to the Rangers. When the Devils came later, they didn't pay inflation on that and split it. They paid $23 million. So, basically, they inflated the $4 million and had to pay that number to BOTH the Rangers and Islanders; plus a little extra to Philadelphia for taking a slice of their market.

JB's bankruptcy isn't about "well, there's no other way in." The way in is far too expensive, so he's trying to take control of territorial fees out of the NHL's hands and put it in the hands of someone much less educated in the area of sports team relocation.

He's trying to buy a lucrative Hamilton expansion team (which would probably cost in the $400-$500 million range after territorial fees) and get it for the price of a bad team in a horrible market.

 

[KevFu]

Did I read this right? Are you comparing Canadian nationalism to the KKK and the Nazi's? I think you owe the Canadian people a serious apology. So when the Americans chant USA - that is ok, but when Canadians band together to support the movement of a team from Phoenix to Hamilton - we are the equivalent of Nazi's? Yikes!

I don't think you read it right. I think he meant "USA" is nazi-like hate-mongering. Either way, I think that's incorrect.

Hate-mongering is booing an anthem (which is also ignorant, because teams may be located in one city/country; but players come from all over).

Crowds (especially when you add beer) do/say stupid things. Look at England. They riot, fight, chant racial slurs at players (including ape sounds at any black player with the ball, even though their team has black players).

Look, I'm all for clever insults at a game (Man City's Tevez chant was hilarious http://www.fanchants.com/football-songs/manchester_city-chants/tevez-2/ But now he's on THEIR team!) but there's a line you shouldn't cross.

Booing an anthem is classless and stupid. Chanting "USA" or "CANADA" or "Mexico" is not.

 

[Fugu]

Temporary lock while I clean up the thread. Not liking the turn of the discussion here.

Edit: Open for business-- and let's stick to exactly that, BUSINESS.

Thank you.

 

[Fugu]

How exactly is Bettman trying to screw Moyes out of money? You mean, by not offering Moyes a lot of money for a franchise he devalued dramatically by placing it into bankruptcy in violation of league rules?

If any of your rant had made sense, that would probably be forgotten when you remember that Bettman has loaned the Coyotes dozens of millions of dollars.

However as a secured creditor the NHL stands to recoup its money.

Stands to recoup and then some IF the team is relocated.

It was devalued by the time he placed it in bankruptcy. He couldn't sell the team where it was, had an ornery lease, and Bettman's best deal was to ask him to walk away so Reinsdorf could waltz in (less money than the subsequent bids) and take over, possibly with better concessions from Glendale! (Keep in mind that JR has real estate/development interests in Glendale too.)

Moyes choices were to hand over the keys and chalk up the $300 MM in losses to a good learning experience, or find another route alone (the league didn't give him 2 options) where he ~might~ stand a chance at getting some of his pennies back.

 

[Pinkfloyd]

Yes it does.

Uhh...no. It applies only to expansion franchises. It makes no reference to relocation at all and there is no way that you could pass off a relocated franchise as a new franchise.

 

[bbud]

i agree with Moyes taking the JB - BK route after GB brought a deal that did not come clse to paying back any investment , and the numbers can be argued but what cant be is he lost an awful lot GB knew it for a long time and then was willing to throw him off the boat with no life ring nice guy.
No small wonder he went to JB as a simple option you dump manure on my lawn ill dump some in yours and i do think much of this has become very personal between them all.

 

[TaketheCannoli]

Stands to recoup and then some IF the team is relocated.

It was devalued by the time he placed it in bankruptcy. He couldn't sell the team where it was, had an ornery lease, and Bettman's best deal was to ask him to walk away so Reinsdorf could waltz in (less money than the subsequent bids) and take over, possibly with better concessions from Glendale! (Keep in mind that JR has real estate/development interests in Glendale too.)

Moyes choices were to hand over the keys and chalk up the $300 MM in losses to a good learning experience, or find another route alone (the league didn't give him 2 options) where he ~might~ stand a chance at getting some of his pennies back.

This is all water "under the bridge," but what is your opinion of his postion once Moyes went to the NHL in November and said, "I'm done. I'm not putting another dime in to this team." and the NHL then began to finance the team?

It seems to me, if one walks away from an asset and corresponding liability, they cede control. If I walk away from a home and its mortgage, it's over I lose the house and likely lose any equity, once the State disposes of it at a distressed price.

I think the League's tactical error here was doing it quietly. The League could have said, " Hey, you can either keep the team afloat while you try to sell it, hand it over to the NHL in its entirety, or file bankruptcy."

 

[TaketheCannoli]

Since that is not the test as noted in the CCB opinion nor under the anti-competition case law, there is no need to show you the veto.

And again for I do not know maybe the 20th time:


In the case of Phoenix it would certainly seem to some observers that these "legitimate interests" are not compelling given what appears to be a non-viable market (as described by Jerry Moyes) and may well have been suborned to the practice of anticompetitive acts.

You may disagree.

Note the word "conduct" - it is certainly arguable that the NHL's conduct in the Phoenix case was undertaken for the purpose of preventing competition or for another anticompetitive purpose. Namely keeping a team out of MLSE territory in the guise of something else. It does not require any specific act and in many anti-trut and anti-competitive cases it is the conduct that gives rise to the finding not a single act.



Again should the CCB conclude that in the Phoenix case NHL policies were "applied in furtherance of a predatory, exclusionary or disciplinary purpose" then that would be a matter for consideration.

The CCB also noted:


Note it is the entitlement to veto and subsequently MLSE has declared in writing that they do have such an entitlement. I agree with their position given the NHL Constitution.

I agree with Dr. Stephen Ross that the CCB has been less than zealous in its investigations to this point.

Help me understand why when quoting this portion of the CCB opinion, you fail to note a very important phrase

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.

Sounds like a veto would have to actually occur.

 

[Pure West]

Phoenix? All JB had to say is "Look, I want to buy a team and move them to Hamilton. Look at the Coyotes. They are hemorrhaging cash, they lose ridiculous sums of money. You've already fronted them millions. And they are on their third owner. The TV ratings suck, they are contributing virtually nothing to the league but embarassing our best player."

The NHL's arguments for keeping a team in Phoenix, outside of JB's current means, would be EXTRAORDINARILY WEAK. But now, even if the NHL wants the Coyotes in Hamilton, they still have to fight the means by which JB is trying to get them there.

Why do people keep forgetting that the only way to move the Coyotes is to take them to bankruptcy? Thats the only way out of the lease, aside from negotiating a buyout. Given that the city already turned down a 50 million dollar buyout I would tend to believe that this was the only option.

 

[KevFu]

Why do people keep forgetting that the only way to move the Coyotes is to take them to bankruptcy? Thats the only way out of the lease, aside from negotiating a buyout. Given that the city already turned down a 50 million dollar buyout I would tend to believe that this was the only option.

Yes, but they could do the league business first (approve JB, vote on sale/relocation/territory fees), and then use bankruptcy to void the lease and transfer ownership.


Or they could simply fold the franchise through bankruptcy, and give an expansion team to Hamilton

 

[CHRDANHUTCH]

Yes, but they could do the league business first (approve JB, vote on sale/relocation/territory fees), and then use bankruptcy to void the lease and transfer ownership.


Or they could simply fold the franchise through bankruptcy, and give an expansion team to Hamilton

it's already gone past the approval of JB, etc....Kev, the Board isn't going to hold a vote while they're focused on starting the season taking the limelight off either the Victoria Cup, the season openers Thursday, the European openers in Finland....

as long as the Coyotes are in bankruptcy, the franchise remains a member and the stay remains in effect as to termination of Phoenix as a league member, remember Daly stripped Moyes of his rights to represent PHX, as governor on league votes.

 

[CGG]

This is all water "under the bridge," but what is your opinion of his postion once Moyes went to the NHL in November and said, "I'm done. I'm not putting another dime in to this team." and the NHL then began to finance the team?

It seems to me, if one walks away from an asset and corresponding liability, they cede control. If I walk away from a home and its mortgage, it's over I lose the house and likely lose any equity, once the State disposes of it at a distressed price.

I think the League's tactical error here was doing it quietly. The League could have said, " Hey, you can either keep the team afloat while you try to sell it, hand it over to the NHL in its entirety, or file bankruptcy."

Well the team is in bankruptcy, so Moyes has ceded control. But at least he ceded control to a court instead of the group of [mod: deleted] (NHL) trying to throw him under a bus. Moyes has also walked away from all of the equity in the deal, it's no different than walking away from your house. All he is trying to do is recover some of the cash he has loaned to the team. Not equity. Debt. The NHL (surprise surprise) wants to pretend that Moyes never loaned money to the team in the first place, so they were trying to sell the asset (hockey team) to deliberately screw over one of the creditors (Moyes himself). If this wasn't the NHL's intention they wouldn't argue so vehemently against the notion that Moyes is a creditor.

Little wonder that Moyes tipped the team into bankruptcy instead of just sitting back and watching as one creditor (NHL) tried to backroom a deal through and force another creditor (Moyes) to get $0.

What I find appalling is the league then whining about Moyes' actions and trying to portray him as a villain, he who lost $300 million feeding the team amidst promises that Phoenix could be an NHL city. And whether the number is $300 million or $50 million, I don't care. It's a helluva lot of money. I see no harm in Moyes trying to use the law to his advantage to recover some of his debt through a bankruptcy sale. The fact that bankruptcy is "against the rules" in the NHL is further proof that their constitution is crap. The fact that the NHL is the only other bidder in this auction, and they are claiming absolute power to veto any other bidder, is a complete farce.

 

[KevFu]

it's already gone past the approval of JB, etc....Kev, the Board isn't going to hold a vote while they're focused on starting the season taking the limelight off either the Victoria Cup, the season openers Thursday, the European openers in Finland....

as long as the Coyotes are in bankruptcy, the franchise remains a member and the stay remains in effect as to termination of Phoenix as a league member, remember Daly stripped Moyes of his rights to represent PHX, as governor on league votes.

I know this. We were referring to the whole "back door" vs "front door" thing. There is a front door.

 

[BAdvocate]

Phoenix is the most ripe to move. Personally, I think he actually could have been successful moving PHX to HAM if he didn't go the bankruptcy route.

Pittsburgh has a long history. Their fans support them (how many straight sell outs?). Bettman said "All they need is a new arena. No reason to move."
Nashville hasn't had the opportunity to establish themselves yet, and Bettman wanted to give them the opportunity to do so. They needed an owner, but can be financially viable.

Why do you say Nashville hasn't had the opportunity to establish themselves yet, but Phoenix has? They had a crappy arena/lease agreement in Phoenix, Glendale agreed to pay $180 million to build a hockey arena (after Scottsdale refused) and now 5 years later (which includes a cancelled NHL season, including the all-star game at Glendale, and an economic crash) they've had all the opportunity they need to establish themselves?

I don't think so....Let's give this up & coming team a chance. They've been through the rebuilding, and they've survived the economy...The Phoenix Coyotes will rise..

A note for everyone on the whole USA/Canadian bashing....just because each country has some idiots, doesn't mean we should start bashing each other....those idiots would be just the same if they were living in any country....Don't blame the country....in this case blame the messenger.

 

[Jaym3000]

Help me understand why when quoting this portion of the CCB opinion, you fail to note a very important phrase



Sounds like a veto would have to actually occur.

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.

I think you are reading that wrong - the veto doesn't have to occur - and they are referring to the laws in effect when the "event" occurs. The event would be if a single team were entitled to prevent a franchise from entering its local region - hence the "concern".

 

[CHRDANHUTCH]

Well the team is in bankruptcy, so Moyes has ceded control. But at least he ceded control to a court instead of the group of [mod: deleted] (NHL) trying to throw him under a bus. Moyes has also walked away from all of the equity in the deal, it's no different than walking away from your house. All he is trying to do is recover some of the cash he has loaned to the team. Not equity. Debt. The NHL (surprise surprise) wants to pretend that Moyes never loaned money to the team in the first place, so they were trying to sell the asset (hockey team) to deliberately screw over one of the creditors (Moyes himself). If this wasn't the NHL's intention they wouldn't argue so vehemently against the notion that Moyes is a creditor.

Little wonder that Moyes tipped the team into bankruptcy instead of just sitting back and watching as one creditor (NHL) tried to backroom a deal through and force another creditor (Moyes) to get $0.

What I find appalling is the league then whining about Moyes' actions and trying to portray him as a villain, he who lost $300 million feeding the team amidst promises that Phoenix could be an NHL city. And whether the number is $300 million or $50 million, I don't care. It's a helluva lot of money. I see no harm in Moyes trying to use the law to his advantage to recover some of his debt through a bankruptcy sale. The fact that bankruptcy is "against the rules" in the NHL is further proof that their constitution is crap. The fact that the NHL is the only other bidder in this auction, and they are claiming absolute power to veto any other bidder, is a complete farce.

Moyes still has somewhat control, CGG, until the franchise emerges from bankruptcy... only then does Moyes cede control over all team/personnel matters...

 

[TaketheCannoli]

Well the team is in bankruptcy, so Moyes has ceded control. But at least he ceded control to a court instead of the group of [mod: deleted] (NHL) trying to throw him under a bus. Moyes has also walked away from all of the equity in the deal, it's no different than walking away from your house. All he is trying to do is recover some of the cash he has loaned to the team. Not equity. Debt. The NHL (surprise surprise) wants to pretend that Moyes never loaned money to the team in the first place, so they were trying to sell the asset (hockey team) to deliberately screw over one of the creditors (Moyes himself). If this wasn't the NHL's intention they wouldn't argue so vehemently against the notion that Moyes is a creditor.

Little wonder that Moyes tipped the team into bankruptcy instead of just sitting back and watching as one creditor (NHL) tried to backroom a deal through and force another creditor (Moyes) to get $0.

What I find appalling is the league then whining about Moyes' actions and trying to portray him as a villain, he who lost $300 million feeding the team amidst promises that Phoenix could be an NHL city. And whether the number is $300 million or $50 million, I don't care. It's a helluva lot of money. I see no harm in Moyes trying to use the law to his advantage to recover some of his debt through a bankruptcy sale. The fact that bankruptcy is "against the rules" in the NHL is further proof that their constitution is crap. The fact that the NHL is the only other bidder in this auction, and they are claiming absolute power to veto any other bidder, is a complete farce.

He ceded control when he refused to continue to fund the team in November, not when he filed Chapter XI Bankruptcy. He walked away from his liabilities at that time. The League screwed up tactically when they let him stay involved in an attempt to handle things quietly.

The equity vs. loan argument is based upon the type of instrument Moyes chose to use, convertible debentures. In fact, that's how he acquired the team from Ellman.

It is common for contracts to have a clause that voids them in the case of bankruptcy. Lawyers put them in boilerplate as a standard. It's not unusual in the least. If you have a mortgage, it may easily be in there.

They aren't enforceable.

 

[Pure West]

I don't think so....Let's give this up & coming team a chance. They've been through the rebuilding, and they've survived the economy...The Phoenix Coyotes will rise.

They've survived now? Funny, I could have sworn they were in bankruptcy with no local bidder in sight. The only reason the team hasn't folded is its attached to the NHL name and has value in relocation. The team as it is now is worth a pittance without the right to relocate or significant government subsidies.

 

[KevFu]

What I find appalling is the league then whining about Moyes' actions and trying to portray him as a villain, he who lost $300 million feeding the team amidst promises that Phoenix could be an NHL city. And whether the number is $300 million or $50 million, I don't care. It's a helluva lot of money. I see no harm in Moyes trying to use the law to his advantage to recover some of his debt through a bankruptcy sale.

The fact that bankruptcy is "against the rules" in the NHL is further proof that their constitution is crap. The fact that the NHL is the only other bidder in this auction, and they are claiming absolute power to veto any other bidder, is a complete farce.

How is the NHL throwing him under the bus when he created the situation? Moyes is trying to recover cash that he lost running the team poorly. Even if the NHL sought out Moyes as an owner and wanted to bring him in to run the team, Moyes could have said "no. they can't make money." You make it sound like the NHL was hell bent on Moyes owning a Phoenix team at gunpoint.

Funny you lambaste the NHL for trying to screw over one creditor... since Moyes put the team into bankruptcy so HE can screw over a creditor (Glendale).