Houston Aeros 1994-2013: Thank you for all the great memories and two decades of great hockey and entertainment.

Tuesday, June 9, 2009

And The Phoenix Coyotes Go To...

Quick note: for those who are tired of this topic, hang on, the mothership should have an Aeros post later today that I will link to over here. Now on with, to me, the fun stuff...

The parties to the mess that is the Phoenix Coyotes will be convening inside a Phoenix courtroom today, and it's just possible that the bankruptcy judge will make some kind of decision that might determine the fate of the team. The Toronto Star says that the judge is faced with making a decision that has Jim Balsillie easing creditor debt versus his reluctance to buck the tradition of sports that has the leagues being the rulers regarding where franchises are located: "(If) Judge Baum is focused on helping creditors, (it) means Balsillie should win," says Penn State law professor Stephen Ross. "But many judges are reluctant to challenge the tradition of sports, which helps the NHL."

One of the mistakes I've been making is that I thought the focus of this case, and the one true precedent, was the one involving Al Davis and the NFL where Davis won the right to move the Raiders to Los Angeles without NFL approval. But it just so happens that there this is a case that is even more on point -- and one which I should know since I'm such a baseball fan. But in 1970, on the literal eve of the regular season, the Seattle Pilots of the American League were relocated to Milwaukee, WI where they became the Milwaukee Brewers. The Pilots were put into bankruptcy by their ownership group, and Bud Selig moved in and purchased the team while it was in bankruptcy.

The Pilots owners were losing money, and they struck up a deal to sell to Selig and his partners for $10.8 million. Local officials in Seattle objected to the deal, and they tried to stop it. The owners then put the team into bankruptcy protection and argued that the deal should be approved because it would pay off the creditors -- does that sound kind of familiar? The NHL argues that the one difference is that the American League supported the move, to which Balsillie has responded that the American League only approved of the deal after the bankruptcy court judge approved of the plan and had instead insisted the team had to remain in Seattle.

I'm not the judge, and what I say has absolutely no power. But I've thought from the get-go this is a loser for the NHL. I understand that they're trying to protect the integrity of the league constitution and by-laws, and that they're trying to prevent the chaos that could result in teams constantly relocating, but I've thought ever since this thing ended up in bankruptcy court that the league was going to lose because the judge's primary concern is the setting whole the creditors, not protecting league constitutions. And frankly, if bankruptcy court judges can go about voiding union contracts, then they can go about approving this deal. (I also feel good about this as it seems there are a lot of bankruptcy experts who agree with what I think.)

(A side note, for anyone interested in reading more about the Seattle Pilots, then allow me to recommend Jim Bouton's groundbreaking Ball Four, which was about the season he spent between the expansion Pilots and the Houston Astros.)

And Gary Bettman really needs to be careful regarding the arguments that he is pushing before the Court. For instance, over the weekend, the NHL filed papers in which they questioned Balsillie's integrity, noting that Balsillie recently settled with Canadian and American securities regulators regarding allegations that he and others backdated stock options at Research In Motion with Balsillie and his fellow company officials paying more than $70-million (Canadian) to settle the allegations.

Now the reason that Bettman might want to be careful with this argument can best be summed up by one name: William "Boots" Del Biaggo. Boots recently pled guilty to falsifying documents to obtain $100 million in fraudulent loans, and that he did so by way of a Ponzi scheme. Boots used these loans to purchase a $25 million stake in the Nashville Predators. Now the Predators were actually supposed to be purchased from Craig Leipold, current owner of the Minnesota Wild, by one Jim Balsillie. But when Balsillie started making plans to move the Predators to Hamilton, Bettman and the league stepped in to stop the deal and to broker the deal which allowed Boots to become one of the owners.

If Bettman wants to keep pressing the integrity issue at Balsillie, then any attorney who knows what he's doing will certainly push back with Boots Del Baggio, and I can guarantee that that attorney, and the judge, are going to know what exactly Bettman and the league knew about Boots, and when they learned it.

It was also reported that the owners of the CFL's Toronto Argonauts are interested in purchasing the team, and that they would keep the Coyotes in Phoenix. But from what I've read, only an idiot would believe that -- so I guess that means Bettman has either fallen for it or else he's lying. In fact, according to the Toronto Globe and Mail, these guys want to move the team to Toronto.

So later today, maybe, hockey fans might have some idea of what is to become of the Phoenix Coyotes. I've been wrong, often, but I think the law is in favor of Balsillie.

1 comment:

AeroFinn said...

Thanks for keeping us informed!
I haven't really studied these cases so closely and I realize this is bit different now but I'm always reminded back to "Saskatoon Blues" by all this. There is a good article here: http://www.stlouisgametime.com/2009/4/5/823172/the-saskatoon-blues-the-story

And here is a lazy copy and paste from wikipedia:
"[...]It finally found a buyer in a group of investors led by WHA and Edmonton Oilers founder Bill Hunter, who then made plans to move the team to Saskatoon, Saskatchewan. However, the NHL was unwilling to lose a market as large as St. Louis and vetoed the deal. Purina then padlocked the Checkerdome and turned the team over to the league. The team appeared destined for contraction when, on July 27, 1983, Harry Ornest, a Los Angeles-based businessman, came in at the 11th hour to save the franchise[...]"