I noticed a new member who's interested in hockey, and thought of how this whole section of the site could use some more activity. What better way to start than with the most compelling and complicated issue taking place in the NHL: the bankruptcy proceedings and tug-of-war over the Phoenix Coyotes. I'll try to give an outline of what's happening, both to set up any discussion and to educate n00bs. Background Information The Phoenix Coyotes are an abortion of a sports franchise. The team moved from Winnepeg over 10 years ago ('96), and have failed to make a profit in any single year of operation since. Lots of people talk about useless NHL franchises that are bringing down the value of the league, but the Coyotes might be the perfect example of that. Not only have they consistently lost money, but those losses have increased exponentially in recent years, with no sign of an upturn. Why exactly have they failed so badly? There are a bunch of reasons. First off, you have to look at their lack of on-ice failures. Immediately after the relocation, the franchise actually experienced some level of success with a fairly talented team built around Americans, Jeremy Roenick and Keith Tkachuk. Since '01 however, the team has drafted poorly, spent money unwisely (or not at all), and (later on) struggled to adjust to the salary cap era. The Gretzky hiring seemed to epitomize the team's lack of focus and knowledge (they were enamoured with his star-status and ability to bankroll the franchise, ignoring his lack of experience or credentials which have hampered the team significantly). Couple the team's lack of success with their location, and you might have an idea why they can't attract a crowd anymore. The NHL had the choice of either Scottsdale or Glendale when moving the Jets to Phoenix, and they chose Glendale when their offer was bumped up a bit. In hindsight, this was a terrible move. Phoenix's corporate and downtown core is in Scottsdale not suburban Glendale, making it difficult for the Coyotes to find corporate sponsors. Glendale is also a long drive out of the way for most of the population, and it was enough to prevent a notoriously success-craving sports town from ever showing up (especially when the team played so poorly). In recent years, the team has been on life support. The NHL tries to keep its figures to itself, but some have speculated that the team's lost up to $70 million over the past two seasons. Not wanting the embarrassment of a public bankruptcy trial, the league (led by commisioner Gary Bettman) stepped in and financed the team for the past several months, all the while denying that Phoenix was a dead franchise or that the team would be leaving. Who is Jerry Moyes? The Coyotes are owned by a number of different investors and creditors, but Moyes is the single largest one and owns a significant percentage of this team (I forgot the number). He's been involved with sports franchises before (the Diamondbacks and Suns) and has made most of his fortune from a trucking association centered in Phoenix. He actually came the be the majority shareholder of the Coyotes in a roundabout way, loaning a friend (previous owner, Steve Elkman) some money and then eventually going in to secure his investment. That innocent loan ending up costing around $300 million, as he struggled with the Coyotes' books. He's become talked about lately, because he specifically filed the team for bankruptcy. As I just mentioned, the NHL directly involved themselves with this team's operation, because they wanted to avoid a bankruptcy hearing. At some point in the process, Moyes must have gotten the impression from Bettman and the NHL, that he would be forced to accept a fairly weak offer for the team and have to swallow the substantial losses he had incurred over the years. He didn't like this idea and decided to rush the team into a bankruptcy court so that he could sell the franchise for the highest possible offer and not just the NHL's handpicked offer, since a bankruptcy court would probably uphold the interests of the shareholders above everything else (eg: the NHL's bylaws and regulations). Who is Jim Balsillie? Balsillie's a figure who's made sporadic headlines in the NHL over the past few years. He's a Canadian billionaire who made his money from RIM, the company that creates Blackberrys. Having taken a smaller role in the company lately, he's had more time to dedicate on his hobbies, one of which is to bring another hockey team up to Canada (Southern Ontario, in particular). His biggest asset has been his substantial wealth, dwarfing any alternative offers for NHL teams in recent years. He made just such an offer for the Pittsburgh Penguins a few years ago when they were in financial troubles, but when the NHL got wind of his desire to move the team as soon as possible, they imposed several last-minute stipulations which essentially took him out of the running. Last year, he attempted the same thing with the Nashville Predators, dealing specifically with their owner, Craig Leopold. He appeared to have tentatively agreed to buy the team for him (for far more than market value), before the NHL was somehow able to convince Leopold to accept a lower offer from William Del Biaggio (who has since been embroiled in fraud charges). He's remained an omnipresent figure in the NHL since, as there are quite a few American teams (and owners) who are facing financial difficulties. It appears that before Moyes filed for bankruptcy, he contacted Balsillie and got an offer from him that would compensate the creditors of much of the money they'd lost over the last few years. Recent Events The NHL immediately came out and announced that Moyes had forfeited control of the team (and the right to declare bankruptcy), when he agreed to their intervention with the team. Moyes and his lawyer (aided with Balsillie's legal team) contested that fact. The city of Glendale argued that the Coyotes couldn't void their 30-year lease on the arena. All sides lined up at the court of Redfield T. Baum who, after sifting through a crapload of initial documentation, ordered both sides to go into mediation to decide how the team would be handled in the next year or so, while dismissing the NHL argument that they had legal control all along. In recent weeks, he's implied that the team will be auctioned off in the near future, while pinpointing the underlying contentious issue of the whole saga: whether or not the NHL's constitution allows them the ability to control who can qualify as a bidder, and under what conditions. It's clear that the NHL isn't firmly committed to Phoenix (I don't think anyone could), but they see Balsillie's attempt to move the team as a deliberate attack on their authority and would rather move the team on their own terms. Significant Consequences - The NHL has taken a major reputation hit from this whole ordeal. The level of secrecy and outright lying they demonstrated in the weeks up to the bankruptcy filing were unveiled once all the documents went through court, and people realized how fucked the team had been. In addition to that, they've seen a huge backlash in Canada, as Canadian hockey fans view Bettman's attempt to cockblock Balsillie as a continued attempt to minimize the Canadian element of the game. - North American sports, as a whole, is anxiously waiting to see how the league's constitution comes out of this saga. The NBA, NFL, and MLB filed motions supporting the NHL's authority, as they clearly don't want a legal precedent that limits the control they have over relocation, ownership, and management. - Other financially struggling NHL teams (Dallas, NY Islanders, Florida, Atlanta, Nashville) are watching to see how Moyes comes out of this. If he retains the right to maximize his compensation, you could see several of those owners try something similar. - The three NHL teams near where Balsillie intends to relocate the team (Toronto, Ottawa, Buffalo) are scared shitless at the possibility that another, well-financed, franchise could step in and eat up some of their revenue and support. Buffalo and Ottawa have gone through their fare share of financial difficults over the past decade or so, and I don't think they're confident enough yet to invite more competition. And while Toronto has a monopoly in their market, people in MLSE have admitted that they're not confident they'll retain such a stranglehold over the next couple decades, in a market where immigrant minorities are the fast-rising population demographic.
If Balsillie ever gets a team, I will be suprised. And if a team moves to Hamilton id be shocked, becouse then Toronto would want one. I think Balsillie pissed off alot of the owners when he was selling tickets for the Preds, before he even bought them.
Did you write this summary Chutney? A fine piece, I barely know anything about the NHL but this is a fascinating situation. I do not understand why the NHL won't let the Coyotes sell to the highest bidder, that does seem anti-Canadian which is unfortunate. Breaking that 30-year lease sounds like it will be very troublesome though, I wonder how they would get around that.
There's no doubt he's lacked any sort of tact or subtlety in his maneuverings. I'm torn on my opinion of him, though. He's shown a blatant disregard for the NHL's regulations and operating procedures, but on the other hand, those rules and procedures are so arbitrary and self-serving that I think they're in need of revising. I've never liked the way Bettman's run the NHL with his secretive "old boys club" mentality, and if it takes Balsillie to call him out on it, I'm OK with that. It'll be interesting to see what (if any) unintended consequences arise if Balsillie gets his way, though. From the start, it's seemed like his ultimate goal is to put a team in the tri-city area (Waterloo-London-Kitchener) of Souther Ontario, with Hamilton serving as a temporary stop until he can finalize that plan. That seems logical enough, but what does Hamilton do when they realized they've been led along this entire time? I'm sure they'd put up some sort of fight (similar to Glendale) to keep the team there, and I'm pretty sure that Hamilton isn't a great market to keep a professional sports team in. Additionally, what if you have mass relocations and/or auctions if he wins through the courts. The NFL/NBA/MLB might be concerned about such a legal precedent, but the NHL is the only North American league that would face the problem immediately. There are a tonne of NHL franchises (NY, Tampa, Florida, Atlanta, Nashville, Dallas) that could be relocated/sold if their owners had the freedom to go about the process without the NHL's intervention. I like the idea of another team in Southern Ontario, though. There's a big market in the Greater Toronto Area that can't afford jacked-up Maple Leafs tickets, are fed up with MLSE's cost-cutting/mismanagement, and remain diehard hockey fans, nonetheless.
lol, I've been following it on the radio for a while now, so it was all swirling in my head. The NHL's very preoccupied with getting "their" people in as owners. Bettman's strategies and policies have been inconstent to terrible, but as long as he has owners that remain obedient, he doesn't have to worry about being ousted from his position. It's funny/odd how subservient those owners are, though. Balsillie's offer for Nashville was over $50 million greater than the next highest bid and the owners said nothing when the offer was rejected (despite the fact that they'd have gotten some of that money, in expansion kickbacks). Balsillie's also provided the only real offer for the Coyotes (the NHL keeps hinting at some vague offer involving Jerry Reinsdorf and Jerry Bruckheimer, but it sounds like a farce), and yet not one owner seems distressed at the possibility of another year in Phoenix (some of their money inevitably goes towards struggling teams like Phoenix). As for the lease, I believe it can be voided through a bankruptcy hearing if it would be in the best interests of the creditors (it definitely would). That'd be majorly unfair to the city of Glendale, but that's nothing new. Professional sports franchises are a risky endeavour and we've seen cities get screwed time and time again by them.
I know London and Kitchener has a OHL team, but can they support a NHL team? (Im saying this becouse Saginaw has a OHL team and Id laugh if they where to bring in a NHL team) I dont know if southern Ontario needs another team tho, With the Leafs, Sens, Sabers and Wings close by Thats 4 teams in a little space. And if Bill Davidson couldnt move the Lightning to "Hockeytown" (I know it was a pipe dream) But he did have the Palace all set up... How can Balsillie move a team when he dont have a Arena even set up.
I think, collectively (London, Kitchener, Waterloo), that area stands a chance. It's three small cities fairly close to one another with a collective population of about 760, 000, but that ignores the various towns and smaller suburban cities surrounding them. It'd obviously be a risk (they have to still build an arena somewhere), but it also brings a few benefits: 1) Growth - The populations and cities themselves are rapidly increasing, with a bunch of engineering and business corporations setting up there to be close to three of Ontario's better business and engineering universities. 2) Distance - It's far enough away from Buffalo, Ottawa, and even Toronto to avoid the NHL's regulations (I believe it requires a minimum of 50 miles separating teams). In that area, Toronto's really the only one directly affected by it. You can probably guess that I don't think much of Hamilton. The city might already have an arena ready, but its one built on declining industries and its population has decreased, and it reminds me a lot of Buffalo (the Sabres are stable franchise, but no rational investor would consider bringing a new sports team to that city nowadays). In contrast, the tri-city area's built on high-tech growing industries and its population is booming. Another option, if the courts do any damage the authority of the NHL's constitution, is to bring another team directly into Toronto. They would have to build another arena (there's no way MLSE would let them use the ACC), but its just like NY in its ability to sustain multiple pro hockey franchises. You are sorta right. The area doesn't need another team. But it's also far from saturated. I think you have to look at the issue, and take the league's economic outlook into consideration. They've got a ton of struggling franchises in the Southern US, more trouble on the horizon (with the worst of this recession yet to hit pro sports), and little to no interests from prospective owners. In that situation, you have to play to your strengths and stop ignoring the failure of your Southern US "experiments." The league's support in Southern Ontario is definitely a strength. There are also a few American markets that have a higher chance of sustaining an NHL franchise, if Bettman's worried about losing relevance in the US (Wisconsin, Washington, Oregon, Utah).
