We fans in Phoenix are still holding our breath. I will get to the particulars in a minute but first here’s my overview opinion on where things stand.
The NHL needs to get one offer to the court. Just one. It needs to be in the 150M buck range minimum. But it needs to be on the table NOW! Judge Baum’s hands are tied with only one “bid” and that bidder sets a base value on a relocated team. He needs a comparable “bid” for a team that will be based in Phoenix. Potential offers and interested parties just don’t count for Baum.
If a bid is in place (bidders have until June 17th, although Baum will not turn away a good faith last minute bid on June 22nd, the PSE mandated bid date) and that bid is sufficient to cover the main secured creditors and provides at least some return for the unsecured ‘little people’ at the bottom of this food chain, then the rest of the options become moot. The court’s bottom line is to get people paid period. But if there is a chance to prevent/limit economic damage to the creditors going forward, of course the court will take that opportunity. This IS the scenario we fans in Phoenix most desire. Keep our team, prevent our city from losing millions, satisfy the everyman creditors, sweep out the old regime and begin a new era with ownership that truly intends to help make us NHL top level competitors. Remember, it isn’t about the most money offered, it is about the best offer period.
If this doesn’t happen, then the Judge’s options are severely limited.
Now of course after sleeping on it, Judge B can decide that he doesn’t have the authority to force a relocation against NHL rules/bylaws. That would effectively stop Balsillie’s end run in its tracks. This decision would in effect place the NHL in the driver’s seat. The NHL would run the team as is until September 10th, continuing to pay the bills and select personnel and draft and sign players. An auction would be held on the 10th and a new ownership accepted. It would be business as usual in the desert with a twist. The financials of the organization would be restructured including, one would hope, the agreements with the City. Gretzky’s overblown salary would be eliminated, someone would be implementing the venue suggestions from Sheehan’s group and the Yotes could begin to climb into competitive status.
The Judge can also decide, yep I DO have this power and furthmore I AM going to use it. This has to be the least attractive option that he has. It will be a precedence setting decision at its core and could lead to heart breaking consequences down the line, as sports ownerships across the continent use the momentous opportunity to walk away from established contracts, invade other territories and just basically ignore the tenents and rules of their leagues at will. It probably won’t happen often but one more time would be too much as cities would be hesitant to do business without the protections afforded in the contracts and leases. This is an expensive and possibly the most damaging option available as it could cause grievous harm to the City of G and not address the unsecured creditors adequately.
The wily Judge can also force the two sides to come up with some numbers. Relocation and territorial fees to be exact. Once those numbers are set, in accordance with reasoning that the Judge finds fair and acceptable, then this becomes a whole nother animal. Will JB up his bid to include those fees? Will another bid come in for a mobile franchise elsewhere? And of course the double sided sword of the City of G’s two claims come into play, upping the ante considerably. This is perhaps the most dangerous of the options short term. There is a lot of money on the table with this route. But the potential reward may just be more than even the most prudent wanna be hockey entrepenuer can resist.
There are probably 10 other scenarios or combinations of scenarios that I haven’t the time nor inclination to bring up today. Who owns the damn thing, is there a dispute or not, can they or can’t they sell, who gets left holding what bags? This whole mess is making my head hurt on a daily basis. So lets get to the good stuff, bits and pieces of discussions and impressions from around the web and of course the parts of the trial that struck me as either pathetic or amusing or made me mad.
First off Mr. Salerno’s analogy using African American bias did NOT amuse me. You sir, are an idiot, out of all the choices for bias out there, you played the race card? Pathetic and insulting.
Mr. Kroop claims to have attended the Caps game this year, he also claimed that, as usual, the Yotes lost… amusing and pathetic… we won that game Jordyboy…. 2 – 1. Did you perhaps leave early or have a few too many hotdogs with your all you can eat ticket which hampered your perception?
Ms. Freeman… again pathetic and amusing. Perhaps PSE should learn a bit more about the entity they are challenging. When asked by Judge Baum if the NHL had ever moved a team from the US to Canada… she replied no. Well duhh, The Atlanta Flames are now the Calgary Flames. Wouldn’t that count? (the NHL kept mum on this one LOL as the Judge was essentially granting them more time to consider the logistics of something that had never been done b4… even though it had)
HUGE move and committment by the NHL to declare that they will fund the team through the entire 09 season if necessary to assure that there is time to get the best bid possible for the asset to stay in Phoenix. (of course Salerno tried to make light of it by saying the NHL was only going to do this because they would be assured to get a bigger slice of the secured funds at final sale) the Judge was still impressed by the offer.
Poor PSE, trying to use the Nordique’s alledgedly 45 day move to prove that the Hamilton move could be done and trying to establish some anti-trust foundation using the ‘possible’ existence of the pocket veto. PSE’s argument was that the NHL violates anti-trust just by having veto power available. (the NHL said they had known of the Quebec issue a year in advance and had dual tracked the scheduling and other decisions just in case and were prepared well in advance of the 45 days. The Judge said leave the anti-trust stuff alone as it wasn’t valid until somebody used a veto and it would be a matter for another courtroom at that point).
I noticed it got hot n heavy when the Judge moved the proceedings into the 365 portion of the day. Everyone had cases to cite. What came up most often was Raiders I and II. Judge Baum basically declared that in order to satisfy 365 there must be adequate assurance of future perfomance and that Raiders II provided precedence for a transfer fee to be levied to the buyer. This purchase suddenly got a lot more expensive in order to be mobile since the Judge has said that PSE can’t just choose which bits of the bylaws and rules can be applied… now we’re looking at relo fees *minimally already decided since RaidersII had a formula* and since PSE already said Phoenix had no value at all and Hamilton’s worth was touted all over the paperwork that is sure to be a hefty sum at Hamilton value minus Phoenix value and of course the addition of the territorial rights fees that must be paid to TOR/BUF (Freeman tried to argue that neither team had expended any good will efforts towards Hamilton and should not get paid a dime) I don’t think Baum was buying that koolaide either.
With regards to the City of G, Mr. Kroop basically said, hey! yeah there will be damages, huge untold millions of damages to the city, but basically we don’t care because the law says we don’t have to. They gambled on the arena with tax payers dollars and too bad so sad, we don’t owe them anything. Mr. Baldica for the city got really, really passionate. He started throwing out terms like ‘rogue’ and ‘illegal’ and the judge had to calm him back down. I have the utmost love for the City of G’s attorney. Even when the judge made fun of his poster boards he still carried forth to win his points. Basically he won not only a landlord’s claim as a creditor but concession that the City had cause to receive collateral damages. The Landlord’s claim is a lease provision that includes damages that will be capped. The collateral damages however are not subject to being capped. Because Jobarena is not your easily filled tenentreplacement type building (despite anyone’s assertions that we can just pop lacrosse or high school sports in there) the Judge felt that its unique qualities and the assets needed to run it make it difficult enough to warrant the secondary claim. Did I mention how much I love City of G’s lawdog?
Ms. Freeman also made me laugh when she actually had the brass ones to bring up the sorry argument that the NHL doesn’t like the BBofB and that they will not approve him because of it and that it is obvious for everyone to see and their obvious non approval, supports 363 bonafide dispute conditions. (the Judge basically asked if the NHL had turned them down, she said no but they were asking for further information which showed they were dragging their feet. The Judge disagreed, sayin they must be doing something or they wouldn’t need more info. The Judge also admonished them , saying maybe they should have submitted earlier in the process so that the NHL wasn’t struggling to meet such an onerous deadline and they might have already had that approval or disapproval done)
Too much other stuff to go thru but you can check out theYotesDiva and Kash2112’s tweets for a literal play by play. Some cases that will be playing a huge role in the decision making process:
Rickles Home Center (especially paragraph 124 apparently)
Clippers case in the 9th circuit
Raiders I and II
Crow/Wintrhop
Farmers Market VS California
Chicago Board of Trade from the 1920s!
The American League case with the Pilots
Also there were some interesting points written up by our friend the other Heather that will be below the cut. HFBoards has pretty much had one of the best discussions on the entire subject of Coyotes Financials going for a few months HERE.
So as always… Go Coyotes!
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