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Balsillie: Leafs are standing in the way

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More interesting court documents filed in the Coyotes bankruptcy case, these ones coming late Friday night and not receiving a lot of fanfare from the press so far. In them, Jim Balsillie's legal team has begun attempting to draw the Maple Leafs more into the fray by scrutinizing the league's territorial rights provisions and how they may be a factor in this case.

From one of the latest filings:

The evidence is now overwhelming that the only reason that the NHL will not consider a relocation to Hamilton is to protect the concededly unlawful territorial veto rights of the Toronto Maple Leafs. In a shocking revelation, PSE has discovered evidence that, despite the NHL repeatedly telling this Court and the Canadian Competition Bureau that the territorial veto rights provision in Article 4.3 of the NHL Constitution is no longer operative, the Toronto Maple Leafs take the exact opposite view.

Balsillie's team then presents a letter from November, 2006, in which a lawyer speaking on behalf of the Leafs tells Gary Bettman that the team believes it has the right to reject a team relocating into their territory. I've posted the letter here, but what follows is the key snippet:

The Toronto Maple Leafs do not agree that a relocation of another club into their home territory would be subject to a majority vote. They continue to believe that a unanimous vote would be required before a team could be relocated into their home territory…. The Maple Leafs they [sic] reserve all rights to take whatever actions are necessary to protect their exclusive rights to their home territory.

The filing goes on to state that "as a competing bidder, the NHL has forfeited its right to decide the joint relocation application," an argument I expect we'll hear a lot of in the coming week. Essentially, as many commenters have already pointed out, the league may have difficulty rejecting Balsillie when doing so means they can buy the team by default.

Star-divide

The entire 32-page document is titled "Motion for determination that the Coyotes may be relocated to Hamilton notwithstanding the NHL's refusal to consent," and it speaks in great detail about the suitability of the Southern Ontario city for an NHL team (among other things). The real meat of everything is in the territorial rights dispute, however, and Balsillie's camp argues that "rejecting Mr. Balsillie as an NHL owner on the pretense of character grounds is simply a bad faith effort by the NHL to avoid having to consider and reject the Joint Relocation Application to protect the Maple Leafs’ unlawful veto rights."

They also state that, in recent depositions, Bettman and Bill Daly both agreed the league's constitution "has not been amended" to remove the veto, something which was apparently unclear previously. 

This is all murky territory for the NHL. In my mind, the main reason the league has attempted to deny Balsillie on character grounds is that any sort of territorial rights provision will ultimately be unenforceable, leaving the Leafs (and perhaps the Sabres) upset over how this was all handled. The NHL can likely extract a sizable relocation fee out of anyone moving the Coyotes, but the Balsillie camp has thus far shown no interest in paying anything beyond that figure in terms of territorial rights penalties.

The existing NHL teams in Toronto and Buffalo are obviously huge factors in this case, and it remains to be seen whether Bettman and Co. can escape this mess without having to address those issues.

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Somewhat off-topic...

…but is anyone else getting entertained by the increasingly tabloid nature of PSE’s filings? “IN A SHOCKING REVELATION…” Sheesh. Did they hire writers (and, possibly, researchers) from the National Enquirer to put these briefs together?

I’ll give Balsillie this – he’s the master of the non-sequitur argument in this deal. How much of this is pertinent to the auction itself or what is enforceable by Baum? I mean, he can win the auction and move the team but can Baum force the NHL to allow the team to play in the NHL afterward? It certainly is putting the spotlight on the league’s practices – which, given recent events which have made Judases out of the league to people like me, can’t be a bad thing – but I wonder how much of this is really relevant to the current proceedings.

You are validating my inherent mistrust of strangers.

by zyllyx on Aug 29, 2009 6:05 PM CDT reply actions   0 recs

Well, at the heart of the issue is if the NHL used “good faith” in turning down Balsillie based on his character. All of the latest arguments are presented as a basis of saying, no, no they didn’t.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 29, 2009 6:16 PM CDT up reply actions   0 recs

OK, I can see that, but then even if it proves that the NHL didn’t act in good faith, does that therefore give Baum the right not only to enforce a move to Hamilton but to force the league to let the team play the 09-10 season in full standing with the league even after a 26-0-4 vote from the Board?

That just seems like an awfully big reach for a bankruptcy court.

You are validating my inherent mistrust of strangers.

by zyllyx on Aug 29, 2009 6:53 PM CDT up reply actions   0 recs

Balsillie’s still fighting to ensure he’ll be part of the auction. You’re looking too far ahead here; these arguments are addressing things in the near term.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 29, 2009 7:22 PM CDT up reply actions   0 recs

You’re over thinking it.

Baum can’t force the league to do anything. He can only give Balsillie the team, and void contractual ties to Phoenix.
Then Balsillie announces he will move the team to Hamilton.
Then the appeals, lawsuits and injunctions happen, which will be addressed by other courts.

by Resolute on Aug 29, 2009 8:10 PM CDT up reply actions   0 recs

At this point, a dissolution of the team seems preferable. I am not sure if it’s been answered already (if it has, please accept my apologies and steer me to the post) but what would happen if this is unresolved by the beginning of training camp or, heaven forbid, the season opener?

by russellguldin on Aug 29, 2009 9:18 PM CDT up reply actions   0 recs

The second the NHL tries to dissolve the team, Balsillie slaps a massive lawsuit on the league and tries for an injunction forcing the NHL to let him play. I think the NHL would appeal the decision to award Balsillie the team rather than dissolve it.

And I couldn’t hope to answer the question of what would happen if the team begins play before there is some kind of resolution, even if that decision is under appeal.

by Resolute on Aug 30, 2009 10:57 AM CDT up reply actions   0 recs

Would the team begin play if there is no front office? At this point, what is the state of the organization? Is it simply that the ownership is in question or is the front office a ghost town? Is there any way to tell the actual status of the team above the ice?

by russellguldin on Aug 31, 2009 5:43 PM CDT up reply actions   0 recs

The NHL as a league that wishes to operate in the US and Canada is subject to antio-trust rules – the only sport that has an exemption to them to my knowledgfe is Major League Baseball (stupidly IMHO) but that’s why I and every other American pay Congress to conduct hearings as to whether or not “Big Papi” and others might be “juiced” instead of spending their time on less serious things like overseeing and questioning monetary policies of less important entitities like say the Federal Reserve…..

by markbona-capsfan99 on Aug 29, 2009 6:36 PM CDT up reply actions   0 recs

The Fed is pretty independent of Congress vis a vis monetary policy and for good reason – you don’t want electioneering with the money supply. What congress can focus on, though, is fiscal policy.

by Knee high to a duck on Aug 30, 2009 8:24 AM CDT up reply actions   0 recs

Because they’re sooooo good at it…

2008-2009 Colorado Avalanche: Dry Humping Mediocrity

by Mike @ MHH on Aug 31, 2009 10:29 AM CDT up reply actions   0 recs

Like anything American, they have certain gravitation to money and all things associated with same.

by russellguldin on Aug 31, 2009 5:44 PM CDT up reply actions   0 recs

Like anything American Human, they have certain gravitation to money and all things associated with same.

Americans do not have the market cornered on greed.

The 2009-10 Colorado Avalanche: Aiming for the Charity Point
Jibblescribbits: C'mon over and waste some time

by Jibblescribbits on Sep 1, 2009 10:18 AM CDT up reply actions   0 recs

So you say, but the whole reason there is a white, English-speaking dominant culture in the United States is because some folks on a different continent were looking for a way to make goods cheap; most bang for the least amount of bucks spent. And while in other places that has generally become a predilection toward thrift, the US has taken that concept and made it into a “MINE MINE MINE!” society that celebrates having more and sharing less.

I don’t agree with you in that the US doesn’t have the market cornered on greed. Can you think of any nation that has the GNP and economic power of the US that also refuses to keep its citizens healthy, safe, and sheltered?
I don’t know of another country that has the second and third largest economies inside of it (those being California and the megalopolis of NYC/Jersey City/Trenton) and would still support legislation for children to not receive school lunches because “Hunger is a good motivator” (Cynthia Davis, REP-Mo.).

Are there more corrupt governments? Of course; well, maybe. But they don’t have the wealth of resources the US does. That is what helps the US corner the market; access to the most fertile land in the world, an energy supply that could be self-sustaining, billions of dollars to spend on education, health and infrastructure, and yet less than a cent of every dollar taxed (one of the lowest average % taxed in the first world, BTW) goes towards making sure that people are healthy and cared for.

Um… hockey! Yeah! I really hope I get to see Shane Doan out on the ice for more than just the Olympics!

by russellguldin on Sep 1, 2009 9:35 PM CDT up reply actions   0 recs

I’m all for hockey staying in Glendale except for the old boys club feeling that I can’t help but get from the NHL’s refusal to acccept Balsillie. It just makes me root for him and hope Bettman doesn’t succeed. You’d think the NHL would embrace someone as tech-savvy and wealthy as he is.

by Masha on Aug 29, 2009 6:22 PM CDT reply actions   1 recs

The NHL seems like a multi-billion dollar “No Homer’s Club” – with Balsillie playing homer simpson (albeit a smart and successful one)

by Glenw9 on Aug 29, 2009 6:34 PM CDT up reply actions   0 recs

I’m totally shocked that Ted Leonsis and the Caps as well as the Sharks’ management didn’t vote for Balsillie and his group in light of some of their comments about bailouts, etc. for others….

by markbona-capsfan99 on Aug 29, 2009 6:38 PM CDT up reply actions   0 recs

I’m not sure if the tallies are publicly available from the Board of Governors (i.e. who voted which way), but it’s possible they were the ones who abstained. It’s not a vote against of course, but with a rejection of Balsillie a lock no matter how they voted, it wouldn’t have done anything but put them in bad standing with the majority of owners.

Fear The Fin: Where Selling Your Soul Is The Likely Solution

by Mr. Plank on Aug 29, 2009 7:37 PM CDT up reply actions   0 recs

I'm not. They're protecting their own investments.

All of the ownership groups have >$100M investments in the existing order of professional sport in North America. The status quo has a few benefits to them.

First, keeping Southern Ontario as a credible move threat in their own arena battles or potential sales is a nice luxury, akin to how baseball used Tampa Bay for about 10 years.

Second, territorial exclusivity is hugely valuable to five or six powerful franchises. Rumor has it that 15 years ago Pete Karmanos’s plan A for the Whalers was the Motor City suburbs. I can assure you Mike Ilitch hasn’t forgotten.

Third, allowing Balsillie to win here sets up a precedent for an end run around the league rules in just about every move case, whether that precedent is practical (in a settlement) or legal (if the BK processes). It’s a lot harder for the league to extract sizeable relo fees (even for open territory) from a new owner-wannabe if the newbie knows that a BK judge will trash any league rules that obstruct the sale and stick the NHL and any franchises whose territories are compromised at the back of the unsecured creditor line. Plus it sets up a greater incentive for a bad owner to cook the books toward BK if they want to get out — and makes it harder for an honest owner to attract a buyer if BK is a reliable way in.

That 17-year-old Hokie sitting in the rafters in Greensboro didn't see any of this coming.
@joshcvt / blog / photography

by JoshCVT on Aug 29, 2009 9:47 PM CDT up reply actions   0 recs

The thing about Balsillie is that he makes no pretenses about how he’s going to skirt, ignore, or break rules to get what he wants. The NHL shrouds themselves in all sorts of pretense and spin and posturing.

Fundamentally, there is very little difference between them – they both want to move the Coyotes and want to do it on their terms. Balsillie is just being a lot more honest about it (although there’s still that dishonest shading – about it being about Canada and Canadian fans instead of about him getting a hockey team for a song and making a mint off of Hamilton, etc.).

That doesn’t mean I like Balsillie or makes me want to root for him. The only people I sympathize with in this whole mess are the fans in Hamilton who are being used AGAIN as props in a stage battle and the fans here who are essentially being dismissed outright.

You are validating my inherent mistrust of strangers.

by zyllyx on Aug 29, 2009 6:56 PM CDT up reply actions   0 recs

I am not an attorney just a businessman who has doine a few “deals” in his life and this seems like an excellent move by Balsillie and his team as they may well kill two birds with one stone and one that certainly lloks like it has some corraborating documentation at hand those two birds being:

1) Clearly showing that now the NHL has entered the bidding for the team they are wholy conflicted and here’s some underlying motivation for why they might have knowingly entered into such a foolish position and

2) That despite all protestations to the contrary, the Toronto Maple Leafs are and have been a key underlying reason that the Balsillie team has been unsuccessful to date in getting a team and moving them to Hamilton ,,,

Since the documentation shows some trail that might be true it likely has to be considered by the bankruptcy court especially if they are considering rguments for bids for the bankrupt parties assessts that might be less favorable to the secured and unsecured creditors – whoever they determine them to be – after all simple math says 212 is greater than 140….

by markbona-capsfan99 on Aug 29, 2009 6:32 PM CDT reply actions   0 recs

I had no facts or quotes to back it up but based on some of MLSE’s behavior in the media I guessed at this back in May. Worth a read:

http://www.pensionplanpuppets.com/2009/5/6/866929/another-team-in-ontario

Pension Plan Puppets*
* Blog contains less than 2% puppet content by weight.

by Chemmy on Aug 29, 2009 7:07 PM CDT reply actions   0 recs

Who finally said what? JB said he feels that it is the Leafs behind it? He said that a long time ago, including in multiple court filings.

by Gerald on Aug 29, 2009 10:00 PM CDT up reply actions   0 recs

James, I don’t know about you or anyone else, but this is certainly an interesting spin by JB.

He has taken a letter from the Leafs COMPLAINING that the league has taken a vote to effectively reject veto rights and has acted CONTRARY to the interests of the Leafs in this matter, and he is trying to suggest that this is evidence of the NHL trying to PROTECT the interests of the Leafs?

If I were acting for the NHL, I would actually be producing this letter as evidence that the league does not kowtow to the interests of the Leafs.

As an aside, I wonder whether there is any correspondence, meeting minutes or other documetation since Nov of 2006 indicating anything to the contrary regarding the Leafs’ position. I note that the Simpson Thatcher letter was written before the CCB issued their ruling on the Predator matter, which ruling made a fairly clear statement that they would not look kindly upon a veto. It was fine for the Leafs to take that position in 206 before the CCB Predators ruling, but it would be quite another to maintain that position after that ruling.

On a procedural matter that maybe no one will care about other than lawyers, such a filing is yet another example of the PSE lawyers completely ignoring the filing rules laid down by Baum J. They dress it up as another “motion”, when really it is yet another supplemental response to the NHL’s original motion for a determination of the whole JB application issue, on which they have already briefed the one time that Baum J. had allowed. There is a lot of “sharp practice” going on in this case. It makes us look bad.

by Gerald on Aug 29, 2009 10:09 PM CDT reply actions   0 recs

No, JB’s suggesting that the Leafs still believe they can only have their veto overturned by a unanimous vote. Leafs or NHL JB will accept either as the villain here.
As for lawyers looking bad it’s the nature of the work. Subjectivity rules and since lawyers have to aggressively advance their cases someone who disagrees with them is always going to look down on their methods. Me, I’m kind of impressed all around with the lawyers on all sides here-it’s been quite entertaining(sorry Coyotes fans).

by yrmom on Aug 29, 2009 10:28 PM CDT up reply actions   0 recs

As an aside, I wonder whether there is any correspondence, meeting minutes or other documetation since Nov of 2006 indicating anything to the contrary regarding the Leafs’ position.

This was one of the subjects of the depositions given by Bettman and Daly recently and both confirmed there had been no change to the clause in the constitution. That’s all the Balsillie camp reveals on that front.

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 29, 2009 11:28 PM CDT up reply actions   0 recs

But even without a change in the constitution, e-mails or other evidence that the Leafs further discussed this with either Bettman or Daly would provide fodder for Balsillie’s claim.

by Masha on Aug 29, 2009 11:38 PM CDT up reply actions   0 recs

That is a response to a carefully crafted question. If there is correspondence or meeting minutes which indicates that the Leafs acknowledged the impact of the CCB ruling, that would be interesting.

Either way, though, this does nothing but bolster the NHL’s position that JB’s theory of the league merely acting as the proxy of the Leafs is unfounded.

Can you send me the doc, James? It is not up yet on my regular source site. I am sure that Mr. Rodier or Mr. Walker would not mind.

by Gerald on Aug 30, 2009 9:36 AM CDT up reply actions   0 recs

Is anyone really confident that the Leafs goaltending can stop the shot Balsillie just took?

by J. Michael Neal on Aug 30, 2009 1:00 AM CDT reply actions   1 recs

Good thing Pogge is a Duck now, eh?

by Resolute on Aug 30, 2009 10:59 AM CDT up reply actions   0 recs

No but Komisarek will likely block it before it gets to Toskala.

Pension Plan Puppets: A Toronto Maple Leafs blog and a group therapy session.

by PPP on Aug 31, 2009 8:03 AM CDT up reply actions   0 recs

Toskala is old news. The kool kids are all ‘bout the Monster now. He’s gonna win ’em a Cup!

2008-2009 Colorado Avalanche: Dry Humping Mediocrity

by Mike @ MHH on Aug 31, 2009 10:34 AM CDT up reply actions   0 recs

I am not an attorney all I am is a hockey fan! Gary Bettman is making a joke out of the entire NHL and I feel that he should be removed as commissioner! Please help accomplish this by signing my petition to have him dissmissed
http://www.petitiononline.com/82009/petition.html
 Thanx
Ken

by Fishingman000 on Aug 30, 2009 6:00 AM CDT reply actions   0 recs

This is sure to work. Thanks.

You are validating my inherent mistrust of strangers.

by zyllyx on Aug 30, 2009 10:47 AM CDT up reply actions   0 recs

OMFG… Everyone has to read this petition… talk about comedy gold!

Apparently Bettman engineered Ziegler’s firing after the 1992 players strike by forming an “old boys club”. There was apparently two strikes under his watch, which proves he’s incompetent, and he changes the rules of the game to suit his own personnel (sic) agenda. He also personally created the instigator rule, personally moved the North Stars to Dallas, the Nordiques to Colorado and personally created the push for southern expansion. And, of course, his standing in the way of good ole Uncle Jim is the result of a personal vendetta.

I can understand that people have fallen for Balsillie’s PR campaign and are painting him as some kind of hockey saviour while Bettman is the devil incarnate. But seriously dude, if you open your petition trying to paint John freaking Ziegler as a sympathetic figure, you’re doomed from the start!

by Resolute on Aug 30, 2009 11:07 AM CDT up reply actions   0 recs

Any mention of Gil Stein? I can’t be bothered to look myself.

SNN Sports - A theoretical Oilers blog (i.e. theoretically, I write stuff there)

by Doogie2K on Aug 30, 2009 3:02 PM CDT up reply actions   0 recs

Uh, yeah, guys just ignore crap this this in the comments. Move along all!

Blogging on hockey at fromtherink.com

by James Mirtle on Aug 30, 2009 4:20 PM CDT up reply actions   1 recs

Franchise

considering that teams are called “franchises” Don’t the Leafs and the Sabres have the same rights as someone who owns a MacDonalds?

You can’t just buy another MacDonalds franchise and put it up 1/2 block away from an existing one, can you?

Is there a difference? The NHL’s franchise agreements just has a wider no-compete radius.

This entire fight is getting annoying.

www.7thwoman.blogspot.com Updated almost as often as PointBlank, but not quite.

by 7th Woman on Aug 30, 2009 6:27 AM CDT reply actions   0 recs

The franchises HAD a no-compete radius or rather the right to veto new expansions they thought would infringe on their share of the market. However, that came under fire and although it is still in the constitution, Bettman and Daly insist that Toronto does not have veto rights and instead a simple majority vote is needed for expansion rather than a unanimous vote.

by Masha on Aug 30, 2009 8:18 AM CDT up reply actions   0 recs

considering that teams are called "franchises" Don’t the Leafs and the Sabres have the same rights as someone who owns a MacDonalds?

No, they don’t. The difference is the existence of Burger King, Hardee’s, and all of the other fast food chains. The CCB ruling is that the NHL is a monopoly, and that they therefore do not have the same ability to restrict franchise exclusivity that McDonald’s does.

by J. Michael Neal on Aug 30, 2009 11:11 AM CDT up reply actions   0 recs

When was the last time McDonald’s had a franchise in a location where it lost millions of dollars a year, and then insisted it must stay there?

There are a lot of differences between fast-food franchises and NHL franchises.

by dzuunmod on Aug 30, 2009 12:18 PM CDT up reply actions   0 recs

Franchisors refuse movement requests all the time, dzuunmond. The choices that are given are to stay or close down.

by Gerald on Aug 31, 2009 9:24 AM CDT up reply actions   0 recs

That only works if you have a franchisor in place, now doesn’t it?

by dzuunmod on Aug 31, 2009 11:46 AM CDT up reply actions   0 recs

On Antitrust

JB can sue all he want. He has incurred no damages. He can’t collect a cent.

by bobbop on Aug 31, 2009 12:52 PM CDT reply actions   0 recs

I dont think he wants money. I’m assuming he’s using the threat of a suit (and any actual suit) to try and force the NHL into a settlement that gives him what he wants – control of a team in Hamilton.

Glen Sather is a Hockey Genius.

http://glensathersucks.com/
http://twitter.com/ThGeneralissimo

by poploser on Aug 31, 2009 3:18 PM CDT up reply actions   0 recs


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