Bettman, Balsillie Battle in the Desert
It’s no secret that Jim Balsillie, the businessman who brought the world the Blackberry, has been after an NHL franchise for some time. He took his first shot with the Pittsburgh Penguins, but then balked at a deal when he couldn’t find a way to move them to Southern Ontario. Then he took a run at the Nashville Predators, only to be rebuffed once more as the league engineered a deal to keep the team in Tennessee with at least the sheen of local ownership.↵↵Figuring the third time ought to be the charm, Balsillie is taking yet another run at an NHL franchise. This time, the target is the Phoenix Coyotes, and it’s clear that Balsillie doesn’t want to leave anything to chance this time.↵
↵↵The key: while the league was able to maneuver behind the scenes to foil Balsillie’s efforts to buy both the Penguins and the Predators, Balsillie wants to take advantage of U.S. bankruptcy law, and simply make sure that he’s the highest bidder now that Coyotes owner Jerry Moyes has filed Chapter 11. Meanwhile, it’s clear that the man the NHL would really like to be its champion in Phoenix is Jerry Reinsdorf, owner of the Chicago Bulls and White Sox. He has his own ties to the area, with the White Sox making their spring home not far from the city.↵
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↵The latest twist here is that the NHL is claiming that Moyes gave operational control of the team to the league last November in exchange for a $38 million loan to keep the team solvent -- hence he had no right to take the team into bankruptcy. Moyes has countered with the claim that he simply gave the league the right to vote on certain matters, but that a bankruptcy filing isn't one of them. Oh, and did I forget to mention that Moyes has filed an anti-trust suit against the league?↵
↵↵At bottom, it can be hard to see what the problem here is. Taking a look at the Phoenix bankruptcy petition, it ought to be clear to just about anyone that hockey -- for whatever reason -- has failed financially in Phoenix -- even with the benefit of a state of the art arena built with public funds. One of the strengths of the U.S. financial and legal system is that bankruptcy provides a clear roadmap to get businesses restructured quickly and efficiently.↵
↵↵There shouldn’t be any doubt that Balsillie is just the sort of owner the NHL ought to be out to recruit, especially in light of some of its more recent mistakes -- John Spano and William “Boots” Del Biaggio both come to mind. And after watching his interview on Hockey Night in Canada this past weekend, it seems like Balsillie is an awfully reasonable guy who just wants to buy a hockey team for his home town.↵
↵↵The problems here, of course, are several fold. Placing a team in Southern Ontario would be sure to trouble the pension plan that owns the Toronto Maple Leafs, a club that’s the league’s leading money machine. Dropping a team in Hamilton might also make life more than a bit difficult for the Buffalo Sabres, a team with its own history of financial difficulties. But the biggest problem of all, is that NHL owners would much rather see an expansion franchise come to Southern Ontario, which of course would mean that the league would get to share in what could be the largest expansion fee in NHL history.↵
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This post originally appeared on the Sporting Blog. For more, see The Sporting Blog Archives.
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