The Phoenix Saga: My Thoughts

Yesterday, Arizona Bankruptcy Court Judge Redfield T. Baum denied the two competing bids to buy the Phoenix Coyotes. One bid was from Research In Motion co-CEO and self-appointed Canadian Hockey Philanthropist Jim Balsillie, while the other was from the NHL itself, who became an 11th hour bidder because they want to keep the team in Phoenix while Balsillie wants to move the team to Hamilton. Without using much legal mumbo-jumbo (after reading the entire 31-page decision document last night, I don’t want to subject you, our good reader, to that kind of experience), here’s the gist of it:

• Balsillie’s bid is outright rejected, the court will not entertain it any further.
• The NHL gets the team if they can revise their bid to be more fair to creditors Wayne Gretzky and Jerry Moyes, who the league were trying to stiff.

So after watching this whole drama unfold over the last few months, I’m left with a few thoughts on the whole matter:

Professional Sport League Commissioners are breathing a sigh of relief today. – This decision is essentially saying that the protection of the league’s interests to conduct business as it chooses trumps the monetary claims of creditors of an individual franchise. Otherwise, the Balsillie bid would have won hands down due to the significantly higher amount offered. You have to think Bud Selig, Roger Goodell, and David Stern are pleased this morning, as this could have presented a significant backdoor to franchise ownership and control in their leagues had Baum ruled for Balsillie. Somewhere in Oakland, though, a desk just faced the wrath of Al Davis.

Did Judge Baum make a decision on anything in this case? – How long did this drag on? How many delays, extra hearings, etc. did this case have? And to then render a form of a no-decision after all of this? Yes, the no-decision here is basically begging the NHL to come to middle ground, but remember, right now, there is no actual bid out there for a franchise in Chapter 11 bankruptcy. I’m sure the judge and the lawyers in this case are happy with how things went, though. Lots of lawyers made lots of money, and isn’t that really what the court system is all about?

Balsillie is done with the NHL. – This is the third failed attempt he has made to get an NHL team. And he burned every last bridge to the league with this attempt. Not that I fault him for trying, even if the bankruptcy sale tactic was greasy, but he needs to just walk away for his own good, if nothing else. I wouldn’t even want to be associated with these clowns after this ordeal. Heck, I would have told them to Go Screw long ago and went back to my successful billion-dollar company and laughed while the NHL has multiple franchises on the brink of financial disaster. Tiny Gary and the NHL don’t deserve somebody like Jim Balsillie. They’d prefer to deal with upstanding citizens like Boots Del Biaggio who are going to jail for fraudulently getting loans to help buy a stake in the Nashville Predators. After Balsillie’s attempt to buy them didn’t work. Nice.

Anti-trust, anyone? – This part bugs me. The NHL “unanimously rejected” Balsillie as an owner on character and integrity concerns (which is great comedy), and then not long after, announced their own bid to buy the team. You can’t tell me this was a spur of the moment decision. They had to have had this Plan B in their back pocket when Tiny Gary orchestrated this “unanimous rejection” (remembering that a few years prior, he had been approved as an owner when trying to buy the Pittsburgh Penguins). Seems like a bit of a conflict of interest to me, doesn’t it? I’m curious why Judge Baum didn’t give this more play.

Nobody is relocating to Hamilton anytime soon. – A team in Hamilton would be successful. BOTH sides seem in agreement on this. I’m personally not so sure, as I’m not sure Hamilton can support a team (I’m from the area, and I have concerns about infrastructure and the state of Copps Coliseum, not to mention the state of the economy there), but these guys likely know more than I do about this stuff, and paid money to so-called experts who agree with them. Anyways, it’s all but thinly-veiled at this point that the NHL doesn’t want a team relocating there because there is a gold mine in expansion fees to be had (likely around $400 million) when they decide it’s time to go that route. A relocation would kill that opportunity. You just have to look at the fighting over the relocation and indemnification fees that took place to see what that’s all about.

Will the league play nice with Gretzky and Moyes? – Basically, the NHL bid would have paid off all the unsecured creditors except these two. The NHL felt Gretzky’s enormous salary was an albatross, and took the stance that loans that Moyes made to the team should be considered equity. First off, that’s a great message to send to the other owners of teams in trouble. They were ready to shaft Moyes who believed in the cause of selling hockey in the desert. THE DESERT! Sure, he mismanaged the hell out of things, and Gretzky didn’t help by turning the Coyotes front office into a personal country club for his buddies. But still, Moyes was trying to make it work. And the NHL tried to screw him. Judge Baum is basically telling the NHL to “keep it fair” and have a plan to include Gretzky and Moyes in their plans to pay back creditors. Will they do this, though?

Bettman needs to go. – The league is in trouble. Bettman has led a US expansion into markets where they’ve never even seen ice before. It’s worked in a couple of places, but it’s been a spectacular failure in many others. Everybody’s admitted that the Coyotes would do better in Hamilton than in Phoenix, yet the brilliant businessman Bettman is fighting to keep the team in a market that is providing them with eight-figure losses year after year. Losing the league’s money in the process. I’m amazed the other owners are agreeing to prop this franchise up. Are they going to get THAT much back in expansion fees from a Southern Ontario franchise? I wonder if this whole saga, and other likely franchise failures to follow, will spell the beginning of the end. Yes, as a Canadian, I am required by law to hate Gary Bettman, but looking beyond that, look at this league. Failing franchises, TV deals or a lack thereof (Versus is being dropped by providers at a rapid rate, bringing their penetration to about three households now), the Toronto Maple Leafs, I mean, when does the camel’s back break here?

The NHLPA are idiots. – If the NHLPA weren’t so focused on imploding on itself and changing union leadership every other year, they would probably be raising a stink about this. A team in Hamilton would make more money and, thus, raise the salary cap meaning, you guessed it, more money for membership. But, you know, secret 4:00 am meetings to oust union leadership, getting hard-line union fossils like Buzz Hargrove into power, and being manipulated by Eric Lindros are more pressing matters.

One more reason to hate the Toronto Maple Leafs. – Money-printing franchise? Check. Owned by a pension fund that cares about nothing more than making as much money as possible? Check. A history of terrible ownership? Check. A resulting history of terrible front offices? Check. A forty-plus year Stanley Cup drought? Check. Ridiculously overpriced seats mostly owned by corporations that entertain clients resulting in an apathetic game atmosphere? Check. Not that the excellent book Leafs Abomination written by Toronto sports writers Dave Feschuk and Michael Grange needed another chapter, but you can add veto power to the list. Yes, the Toronto Maple Leafs believe they own the Hamilton territory, and thus believe they hold veto power over a team going in that market. So, cock-blocking a nearby franchise that might actually try to compete on the ice and offer decently-priced seats, and, thus, an alternative that you’d rather not have to compete with? Check.

This whole sordid mess has done a lot of damage to the league, the Coyotes franchise, and other stakeholders. Hopefully this gets resolved soon, but I’m afraid this is just the first of many more troubles on the horizon. Will Bettman be around to captain the sinking ship? Will Balsillie start his own rival league? Will the NHLPA wake up and smell the coffee? Will Judge Baum ever make a decision? Will Hamilton get a team? Will Florida, Nashville, etc. be next? Will anybody outside of Canada even care? Stay tuned. That is, if you still get Versus.