Wednesday, 30 September 2009

We Got Nothin'

We waited all that time to get to this point. Ever since May 5, 2009 when Jerry Moyes announced to the world that he was placing the Phoenix Coyotes franchise into Chapter 11 bankruptcy protection, there has been much speculation as to who would eventually own da Chiefs the Coyotes. Judge Redfield T. Baum - a name that seemed like it came from a Hollywood script - turned this one-ring circus into a full-fledged carnival with all the sideshow antics from the parties involved, but it still remained his decision as to whether Jim Balsillie or the NHL would emerge as the owner of the Desert Dogs. And so it came to pass today that Judge Baum handed down his decision.

Are you ready for this? This decision could change the sports landscape for all eternity. Singlehandedly, Judge Baum could transform how sports franchise ownership is attained, and how franchises are awarded and relocated.

Except he didn't.

Option A: Jim Balsillie came away with... nothing.

Option B: The NHL came away with... nothing.

The Coyotes remain in Chapter 11 limbo.

Five months of time and piles of money on legal teams for nothing? Are you kidding me? What was the point of this whole exercise? It seems this was nothing but a lesson in futility for the parties involved, and a point of academia for the legal world. Never one to shy away from the details, however, let's take a look at the details that led to this decision. For those of you who are fluent in "legalese", here is Judge Baum's entire 31-page report.

What I do appreciate is that Judge Baum did exactly what he was supposed to do: he did what was best for the creditors in this situation. Judge Baum's ruling on Jim Balsillie's $242.5 million offer was that he could not "find or conclude that the interests of the NHL can be adequately protected if the Coyotes are moved to Hamilton without first having a final decision regarding the claimed rights of the NHL and the claims of the debtors and PSE". Essentially, the rights of the NHL and the creditors outweigh any reasonable reason for the forced sale and relocation of the franchise to go through. Balsillie's bid was denied with prejudice, meaning he cannot amend his bid to continue in the process.

Secondly, he took aim at the low-ball NHL offer of $140 million. Judge Baum found that because the NHL is opting to only pay "all legitimate creditors", he was "not inclined to approve a sale based upon critical, ambiguous evidence". Essentially, because the NHL could decide who to pay and who not to pay, and how much to pay each of the creditors, the NHL's application would be rejected since all creditors have equal rights to the money being used for the purchase. As stated in the findings, "[o]ne of the prime policies of bankruptcy is equality of distribution amongst the creditors". The NHL's bid was denied without prejudice, meaning that they can amend their bid, and continue to pursue ownership of the Phoenix Coyotes.

Judge Baum decided on Option C, which was to award the team to no one. His statement, written in hockey-esque form, read as follows: "In hockey parlance, the court is passing the puck to the NHL, who can decide to take another shot at the sale net or it can pass off the puck". The message? Amend your bid or let someone else own the team.

The biggest shark in the water, Jim Balsillie, is no longer a threat. The NHL has an open net if it is simply willing to pony up some additional cash. Isn't this exactly what the NHL wanted? All they have to do is put the puck in the net.

Whether or not they do that is now entirely up to them.

Until next time, keep your sticks on the ice!


mtjaws said...

I'm very glad that Balsillie lost and can't get back in, but wish the NHL bid was accepted. Hopefully they'll chip in a little more, gain control, and then find a worthy buyer to keep the team in AZ. I'm sure Hamilton would support the team more, but stealing a team wasn't the way to get one.

Moyes' claim that he "loaned" all that money to the team is hogwash, and he doesn't deserve much back. It was a bad business decision for him, and he should be forced to deal with the outcome of that (losing all that money). Other businessmen know about risk, and this guy sure doesn't.

Jim BC said...

mtjaws said..."...and then find a worthy buyer to keep the team in AZ".

What is the point of keeping them in the desert? Phoenix is not a hockey town. Never was, never will be.

I agree that Balsillie has gone about things the wrong way (i.e. attempting to strong arm his way into things) but the basic logic is this: The NHL has screwed up royally in its attempt at expansion/relocation to the several US locations and Phoenix is simply the one in the spotlight at this time.

The NHL and more specifically, Mr. Bettman need to suck it up, take the hit and start to look at locations that have actual hockey fans.

Teebz said...

The problem, Jim, is that ESPN demands that Phoenix be a location with a team if your league wants to be on their channel. It's one of the top ten populated areas in the USA, and that is advertising dollars that ESPN loves to have.

Phoenix needs to stay, and they need to start cultivating a winner, like, now.

Anonymous said...

Teebz they aren't on ESPN now, ESPN dropped the NHL while they were in Phoenix. AZ in not needed to get back on ESPN. No one there as watching. The NHL needs to let the bad franchises move or die.

mtjaws said...

I understand that other cities are much bigger hockey towns than PHX, but if the franchise actually gets a plan and starts winning, I think more fans will show up.

Wayne struggled as a coach, and probably should've stepped down a few yrs ago, but as part-owner, that wasn't gonna happen. So then the team floundered more, tanked in the standings, and lost those fair-weather fans who root for winners. If they can turn around the team, add free-agents, start winning, and make the playoffs, they'll be way ahead of where they are now.

I know the NFL is different in many ways, but I'm curious to see if the AZ Cardinals see a bump in attendance/revenues due to their Super Bowl run last year.

Teebz said...

Anonymous, you simply don't get how TV ratings work. That's how ESPN makes money. More people watch = more advertising dollars.

They want to have the biggest markets covered so that they can change advertisers big money for commercials.

If the NHL wants to get back on ESPN, they need a franchise in Phoenix.