Relocation question

[Hawker14]

Scenario:

Jim Balsillie purchased the Pittsburgh Penguins out of bankruptcy in December '99 and operated the team in Pittsburgh until the Mellon Arena lease expiry in June '08.

Having fulfilled his 7 year non-relocate agreement, and not having a valid lease for his team to continue play, he applied for relocation to Hamilton. It was approved but with $175m in relocation/imdemnification fees to the NHL and the Maple Leafs.

Question:

Once Balsillie left Pittsburgh, would the NHL automatically own the rights to the Pittsburgh market again ? Or would Balsillie still have a claim to any expansion fees/relocation fees there ?

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[TaketheCannoli]

Scenario:

Jim Balsillie purchased the Pittsburgh Penguins out of bankruptcy in December '99 and operated the team in Pittsburgh until the Mellon Arena lease expiry in June '08.

Having fulfilled his 7 year non-relocate agreement, and not having a valid lease for his team to continue play, he applied for relocation to Hamilton. It was approved but with $175m in relocation/imdemnification fees to the NHL and the Maple Leafs.

Question:

Once Balsillie left Pittsburgh, would the NHL automatically own the rights to the Pittsburgh market again ? Or would Balsillie still have a claim to any expansion fees/relocation fees there ?

The NHL would own it. A team owns the defined territory in its agreement.

 

[Hawker14]

Okay, so if he chose not to pay the relocation fee, and instead was forced to suspend his team's operations in Pittsburgh due to no suitable venue to play, he would continue to own the NHL market in Pittsburgh in perpetuity ?

 

[TaketheCannoli]

Okay, so if he chose not to pay the relocation fee, and instead was forced to suspend his team's operations in Pittsburgh due to no suitable venue to play, he would continue to own the NHL market in Pittsburgh in perpetuity ?

No, he only owns the territory if the franchise is in operation.

You might want to check out the NHL Constitution and By-Laws
Constitution

http://multimedia.thestar.com/acrobat/0e/bf/faddf06240c5bf8d958eb8855bec.pdf

By-Laws

http://multimedia.thestar.com/acrobat/62/84/4a4a6a534907b9cd95aabfd50c84.pdf

http://multimedia.thestar.com/acrobat/ec/fe/70374e49486c8e81b7ad66870a42.pdf

 

[Hawker14]

Okay, thanks.

 

[Hawker14]

btw, I only asked as I came across what I found to be an interesting article from the Harvard Law School which peaked my curiosity in what might be some of the next strategies of relocation in regard to the NHL's hammer of relocation fees, by a maverick such as JB.

http://harvardjsel.com/wp-content/uploads/2010/04/JSEL-Gauthier.pdf