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Re: [hockhist] Re:Balsillie ups ante $30m

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  • Michael Levin
    William, I like your Westmoreland analogy. Dead on as far as Bettman guiding the NHL. To address William s other two points. I think the impact on the Buffalo
    Message 1 of 15 , Sep 9, 2009
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      William, I like your Westmoreland analogy. Dead on as far as Bettman
      guiding the NHL.

      To address William's other two points. I think the impact on the
      Buffalo market is a over blown because of the US' stepped up border
      crossing procedure. Once up a time, it was pretty easy to drive across
      the border. No longer. Who wants to go through the hassle of crossing
      the US border to watch the Sabres? I could understand for the playoffs
      or even for a Cup game, but not for a Tuesday night game against
      Miami. The Sabres should get a pat on the head and told to go to sit
      quietly before anyone mentions the word, Adelphi.

      As to the issue of control, I suspect William's point holds great
      validity. Judge Baum has a major problem on his hand. Except for
      Balsillie's bid, no other bid pays off the creditors. Under US legal
      precedence (i.e., Supreme Court ruling), Baum has to do what is in the
      best interest of the creditors, not the NHL. owners. That is, Baum's
      role remains to protect the creditors. Balsillie's bid most likely
      pays the creditors dollar for dollar, which is unusual in bankruptcy
      cases. I also suspect, but do not know for sure, that Balsillie's bid
      pays the unsecured creditors, which is huge.

      However, Baum remains up against a different US legal precedence
      regarding sports league membership. The courts have ruled fairly
      consistently that sports league have a lot of autonomy in deciding who
      does and does not get to own a club. Heck, a sport league can even
      force its members (i.e., owners) not to own a team in a different
      league (i.e., cross ownership). If the NHL does not want Balsillie,
      then Baum has a gigantic legal mess on his hand.

      Balsillie's bid, I think, is not the issue per se. If Balsillie made
      the same bid but offered to keep the team in Glendale, the NHL would
      probably award him the franchise. If for no other reason, then to
      appease Baum and reduce the legal fees this fight is generating and
      will generate.

      By moving the franchise, put aside the target city for a moment, the
      bonds issued to pay for that hockey arena have to be in jeopardy.
      Without those 40 dates, I cannot imagine that arena generates
      sufficient direct and indirect revenue for Glendale to meet the debt
      obligation. Without the Coyotes, Glendale will surely default on those
      bonds. Even with the Coyotes, Glendale could still default given the
      lease arrangement. However, without the Coyotes, the probability of
      default increases greatly.

      How many other cities face a Glendale scenario where the city would
      default on the bond without the primary tenet? Miami for sure.
      Nashville? Tampa? If those teams declare bankruptcy, break the lease,
      and the franchise moves to another market, will the vacated market
      have the financial wherewithal to meet the debt obligations?

      This action could be Bettman's fear. How can he garner support for a
      new arena in Long Island or Edmonton? How could he convince Kansas
      City to upgrade its facility and/or make a sweetheart lease to attract
      a relocated NHL franchise? How could he spark interest in Houston,
      Seattle, and/or Portland to construct an arena to serve as a
      destination for a misplaced team like the Predators or the Bluejackets?
    • epenaltybox
      ... Absolutely correct. However, the twist on this is that the company will be leaving the United States, and so future revenues to one governmental entity
      Message 2 of 15 , Sep 9, 2009
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        --- In hockhist@yahoogroups.com, Michael Levin <milevin@...> wrote:

        > As to the issue of control, I suspect William's point holds great
        > validity. Judge Baum has a major problem on his hand. Except for
        > Balsillie's bid, no other bid pays off the creditors. Under US legal
        > precedence (i.e., Supreme Court ruling), Baum has to do what is in the
        > best interest of the creditors, not the NHL. owners. That is, Baum's
        > role remains to protect the creditors. Balsillie's bid most likely
        > pays the creditors dollar for dollar, which is unusual in bankruptcy
        > cases. I also suspect, but do not know for sure, that Balsillie's bid
        > pays the unsecured creditors, which is huge.

        Absolutely correct. However, the twist on this is that the company will be leaving the United States, and so future revenues to one governmental entity will be 0.

        > How many other cities face a Glendale scenario where the city would
        > default on the bond without the primary tenet? Miami for sure.
        > Nashville? Tampa? If those teams declare bankruptcy, break the lease,
        > and the franchise moves to another market, will the vacated market
        > have the financial wherewithal to meet the debt obligations?
        >
        > This action could be Bettman's fear. How can he garner support for a
        > new arena in Long Island or Edmonton? How could he convince Kansas
        > City to upgrade its facility and/or make a sweetheart lease to attract
        > a relocated NHL franchise? How could he spark interest in Houston,
        > Seattle, and/or Portland to construct an arena to serve as a
        > destination for a misplaced team like the Predators or the Bluejackets?

        Probably dead on, except for the self-dealing. The Kings' owners own the KC arena. And the Flyers and Bruins have their hands in arena management.

        Morey
      • epenaltybox
        ... You missed my point - in agreement with yours - about the Greater Toronto Area being able to support two teams. I m just not convinced that downtown
        Message 3 of 15 , Sep 9, 2009
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          --- In hockhist@yahoogroups.com, "William Underwood" <wausport@...> wrote:
          >
          > It would be a hell of a lot more people than just "pissed off Leaf" fans

          You missed my point - in agreement with yours - about the Greater Toronto Area being able to support two teams. I'm just not convinced that downtown Hamilton is the place to locate the team. You alienate a good chunk of the GTA by going that far west. Yes, you have an arena already built. But I don't see Hamiltonians stepping up to rebuild or expand Copps since they have already been burned, and Canadians are geenrally much more reluctant to spend their tax money helping billionaires employ millionaires than we are.

          Morey
        • William Underwood
          It is not that far Morey for the entire West End Morey not to mention other communities in the area. Add on that the road there is great and it is not a trip
          Message 4 of 15 , Sep 10, 2009
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            It is not that far Morey for the entire West End Morey not to mention other
            communities in the area. Add on that the road there is great and it is not a
            "trip to nowhere" as we see with a lot of suburban barns.



            [Non-text portions of this message have been removed]
          • William Underwood
            One thing that can come into play in the judge s decision about the NHL owners vote is did he feel that the reason was personal not business. The NFL actually
            Message 5 of 15 , Sep 10, 2009
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              One thing that can come into play in the judge's decision about the NHL
              owners' vote is did he feel that the reason was personal not business. The
              NFL actually got burnt on one of these with Al Davis when they were seen as
              a being "vindictive". Some quotes that were made about him could be
              interpreted that way. If an individual is to be turned down by a league they
              have to point to reason especially with discrimination suits these days. Now
              they will play the by laws card which could work also pointing out that he
              was accepted in the past. So there is no real way to say how this one will
              go on that basis.



              It will be interesting.



              [Non-text portions of this message have been removed]
            • Karkoski James
              ... In the prior brief Baum wrote he stated that Glendale claims it is the creditor which has been harmed the most by the bankruptcy (and if the team leaves)
              Message 6 of 15 , Sep 10, 2009
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                On 2009/09/09, at 23:50, Michael Levin wrote:
                >
                > As to the issue of control, I suspect William's point holds great
                > validity. Judge Baum has a major problem on his hand. Except for
                > Balsillie's bid, no other bid pays off the creditors. Under US legal
                > precedence (i.e., Supreme Court ruling), Baum has to do what is in the
                > best interest of the creditors, not the NHL. owners. That is, Baum's
                > role remains to protect the creditors. Balsillie's bid most likely
                > pays the creditors dollar for dollar, which is unusual in bankruptcy
                > cases. I also suspect, but do not know for sure, that Balsillie's bid
                > pays the unsecured creditors, which is huge.
                >













                In the prior brief Baum wrote he stated that Glendale claims it is the
                creditor which has been harmed the most by the bankruptcy (and if the
                team leaves) and he lamented the fact that he didn't get the
                documentation to rule if this is true of not. He also wrote that
                Glendale had legal precedent to claim this. Glendale's postion has
                been with the NHL and that it doesn't want the team to move and
                Balsillie's new offer gives the city 50 million to move them from this
                position. Is it enough to persuade them?
                .

                >
                > Balsillie's bid, I think, is not the issue per se. If Balsillie made
                > the same bid but offered to keep the team in Glendale, the NHL would
                > probably award him the franchise. If for no other reason, then to
                > appease Baum and reduce the legal fees this fight is generating and
                > will generate.
                >








                This was brought up in the brief, Baum found no malice by the NHL
                towards Balsillie except that he wanted to move the team.

                >
                > By moving the franchise, put aside the target city for a moment, the
                > bonds issued to pay for that hockey arena have to be in jeopardy.
                > Without those 40 dates, I cannot imagine that arena generates
                > sufficient direct and indirect revenue for Glendale to meet the debt
                > obligation. Without the Coyotes, Glendale will surely default on those
                > bonds. Even with the Coyotes, Glendale could still default given the
                > lease arrangement. However, without the Coyotes, the probability of
                > default increases greatly.
                >











                Which probably is the argument Glendale will use to claim it is the
                creditor which has been harmed the most.


                > How many other cities face a Glendale scenario where the city would
                > default on the bond without the primary tenet? Miami for sure.
                > Nashville? Tampa? If those teams declare bankruptcy, break the lease,
                > and the franchise moves to another market, will the vacated market
                > have the financial wherewithal to meet the debt obligations?
                >







                I just read that the city of Nashville is due 50 million if the team
                relocates. Interesting that it is the same amount that Balsillie has
                decided to offer to Glendale.


                This an arena issue for the NHL. Whether of not it wants the team to
                stay in Phoenix is a moot point. It is legally bound to abide by the
                contract that states that the franchise must play all of its home
                games in Glendale.

                >
                > This action could be Bettman's fear. How can he garner support for a
                > new arena in Long Island or Edmonton? How could he convince Kansas
                > City to upgrade its facility and/or make a sweetheart lease to attract
                > a relocated NHL franchise? How could he spark interest in Houston,
                > Seattle, and/or Portland to construct an arena to serve as a
                > destination for a misplaced team like the Predators or the
                > Bluejackets?
                >




                >
                >





                Another angle on why this is an arena issue for the NHL.



                James
                >
                >



                [Non-text portions of this message have been removed]
              • epenaltybox
                But you can forget about the entire East End and northern suburbs, especially in the winter, and you are cutting off a huge amount of the GTA population.
                Message 7 of 15 , Sep 10, 2009
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                  But you can forget about the entire East End and northern suburbs, especially in the winter, and you are cutting off a huge amount of the GTA population.

                  --- In hockhist@yahoogroups.com, "William Underwood" <wausport@...> wrote:
                  >
                  > It is not that far Morey for the entire West End Morey not to mention other
                  > communities in the area. Add on that the road there is great and it is not a
                  > "trip to nowhere" as we see with a lot of suburban barns.
                  >
                  >
                  >
                  > [Non-text portions of this message have been removed]
                  >
                • Michael Levin
                  If Baum rejects both bids, and it is within his right, then the bankruptcy court will oversee the administration of the hockey team. The administrator will
                  Message 8 of 15 , Sep 11, 2009
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                    If Baum rejects both bids, and it is within his right, then the
                    bankruptcy court will oversee the administration of the hockey team.
                    The administrator will balance the books. The Great One's Great Salary
                    will get cut. Anyone want to hazard what the various scouting budgets
                    will look like? The promotions budget? A bankruptcy administrator will
                    run the firm, not in what is the best interest of the NHL or hockey in
                    Phoenix, but how much revenue is being generated compared to how much
                    expenses are being incurred. How long can the Coyotes function based
                    on the revenue they generate?

                    With this announcement, I suspect Baum is telling Bettmen to figure
                    out how to work with Basillie, and Basillie to appease the city of
                    Glendale.

                    Basillie has the easier row to hoe because the contract between the
                    city of Glendale and the Coyotes no longer exists. How much will
                    Basillie offer for the accrued debts owed to the city? Dollar for
                    dollar, or cents (pennies?) on the dollar? Bettman has to tell the
                    Maple Leaf owners that the party is over. Based on the comments from
                    this listserv, I would rather negotiate with Glendale officials rather
                    than those form the Maple Leaf organization.

                    The NHL's bid is laughable. I cannot believe the owners of Nashville,
                    Atlanta, Miami, Columbus, and other struggling franchises have the
                    desire and the wherewithal to support a literally bankrupt team.

                    Basillie, and not the NHL or a court-appointed administrator,
                    represents the city of Glendale's best chance to collect on any money
                    owed.

                    As to the lease, it died with the bankruptcy filing.

                    If I were a creditor to an NHL franchise, then I would politely ask
                    for all account receivables be reduced to zero and for all payments to
                    be made in cash. The NHL and its paltry bid shows its lack of interest
                    in paying the creditors.
                  • epenaltybox
                    The Maple Leafs TV deal, which came out yesterday at $42 million annually, is more than enough to support the losses of the Coyotes, which are inflated thanks
                    Message 9 of 15 , Sep 11, 2009
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                      The Maple Leafs' TV deal, which came out yesterday at $42 million annually, is more than enough to support the losses of the Coyotes, which are inflated thanks to depreciation and The Great Salary.

                      OTOH, one other option that Baum hinted at, which could happen, is that we have 29 teams this season.

                      What I don't get is why doesn't the NHL let Balsillie have an expansion team in Hamilton for $250 million, since that what it appears he is willing to pay (and much more than they should get), have him drop out of the bidding, have the NHL buy the club for $180M, and then the league can do what it wantsd/needs to. There must be something in the negotiations with Glendale that is cantankerous.

                      Morey

                      --- In hockhist@yahoogroups.com, Michael Levin <milevin@...> wrote:
                      >
                      > If Baum rejects both bids, and it is within his right, then the
                      > bankruptcy court will oversee the administration of the hockey team.
                      > The administrator will balance the books. The Great One's Great Salary
                      > will get cut. Anyone want to hazard what the various scouting budgets
                      > will look like? The promotions budget? A bankruptcy administrator will
                      > run the firm, not in what is the best interest of the NHL or hockey in
                      > Phoenix, but how much revenue is being generated compared to how much
                      > expenses are being incurred. How long can the Coyotes function based
                      > on the revenue they generate?
                      >
                      > With this announcement, I suspect Baum is telling Bettmen to figure
                      > out how to work with Basillie, and Basillie to appease the city of
                      > Glendale.
                      >
                      > Basillie has the easier row to hoe because the contract between the
                      > city of Glendale and the Coyotes no longer exists. How much will
                      > Basillie offer for the accrued debts owed to the city? Dollar for
                      > dollar, or cents (pennies?) on the dollar? Bettman has to tell the
                      > Maple Leaf owners that the party is over. Based on the comments from
                      > this listserv, I would rather negotiate with Glendale officials rather
                      > than those form the Maple Leaf organization.
                      >
                      > The NHL's bid is laughable. I cannot believe the owners of Nashville,
                      > Atlanta, Miami, Columbus, and other struggling franchises have the
                      > desire and the wherewithal to support a literally bankrupt team.
                      >
                      > Basillie, and not the NHL or a court-appointed administrator,
                      > represents the city of Glendale's best chance to collect on any money
                      > owed.
                      >
                      > As to the lease, it died with the bankruptcy filing.
                      >
                      > If I were a creditor to an NHL franchise, then I would politely ask
                      > for all account receivables be reduced to zero and for all payments to
                      > be made in cash. The NHL and its paltry bid shows its lack of interest
                      > in paying the creditors.
                      >
                    • William Underwood
                      Yes the North and East ends of TO are out but there is a lot of money in the west and then you have the other communities to the west of Hamilton to tap into.
                      Message 10 of 15 , Sep 11, 2009
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                        Yes the North and East ends of TO are out but there is a lot of money in the
                        west and then you have the other communities to the west of Hamilton to tap
                        into.



                        [Non-text portions of this message have been removed]
                      • William Underwood
                        James there is no question that the arena plays a role in it.this is a multi faceted issue.no one says otherwise. To TO and Buffalo it is all about turf.
                        Message 11 of 15 , Sep 11, 2009
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                          James there is no question that the arena plays a role in it.this is a multi
                          faceted issue.no one says otherwise. To TO and Buffalo it is all about turf.
                          Detroit may be thinking the same.what if someone wanted to move into
                          Detroit? To others this arena thing is an issue, and that may well include a
                          number of Canadian teams in smaller markets. Some smaller markets may fear
                          it could happen to them somehow ala Winnipeg and Quebec. But the by laws are
                          what it really comes back to, a fear of anarchy of sorts. The NHL by laws
                          are there to protect arena issues as you discuss or turf as I discuss. Then
                          there are those who just will not admit failure.who would say that any plan,
                          no matter how stupid, if it is done by the league warrants their protection.
                          Simply put the arena issue is just one of several that come up if the
                          validity of the by laws comes into question or if a hole is found in them.



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