Cheque, and a 'check mate' to come

For the bullet summary, please go here. To contact your MP regarding the Veto issue, please go here. Click here to file your complaint about the Veto of the MLSE (Maple Leafs Sports and Entertainment) to the Canadian Competition Bureau (CCB).

 Said many times, Jerry Moyes deserves to sell this hockey team to the highest bidder, recovering at least a portion of the losses he has sustained since taking over this franchise.
Gary Bettman: Tired of playing the game?

Gary Bettman: Tired of playing the game?

What has taken Judge Baum so long to make a ruling?

He’s in a bit of a conundrum, that’s why.

 Judge Baum has known this team has been a failure in Glendale, and even in Phoenix, as it has failed to do anything but lose money every year it has been located in the desert.

No, the issue for Judge Baum has always been the roadblocks the NHL, and it’s friends have put in the way of Jim Balsille and PSE to obtain this team, and move it to Southern Ontario.

That is obvious.

The judge has been likely trying to figure out how to make a ruling that will be able to stand up to the appeal that is innevitable from the NHL.

 In fact, today in court, the NHL lawyers made it clear that they would only listen to “the highest court in the land“, if they were to be delayed into the season. Baum likely didn’t like to hear that.

It would be good for the lawyer, Goldfein, to take a course in how to win friends and influence judges. Yes, that might go a long way.

 The NHL has promised the City of Glendale that it will try diligently to find a local buyer, and hopefully keep the team in Glendale long term. This is the reason Glendale has supported the NHL bid.
Jim Balsillie: Willing to call the NHL's bluff

Jim Balsillie: Willing to call the NHL's bluff

In any event, let’s get to what legal maneuvers the PSE team has made to effectively call the bluff of the NHL.

 The league and it’s “friends” have been trying to get this team out of bankruptcy, and away from scrutiny.

 However, and this is the big “however”, in the NHL’s offer, Glendale is required to allow the league a “one year out clause“, which means that if they cannot find that local hero, then they relocate the team to another centre.

Here’s the crux.

The NHL brought in Jerry Reinsdorf in the 11th hour to be that local hero, or white knight.  But, Reinsdorf’s offer (which was leaked to the world) had numerous concessions that, in effect left Glendale on the hook for any losses. It also required  significant annual concessions.

 It was not a very secure bid from a confidence perpective, not supporting the belief the team “could work” in Glendale. Included was a  five year out clause , effectively breaking the camels back.

Since Reinsdorf pulled his bid, the NHL came in with their own bid, strangely in competition with the only other “stay home bid” of Ice Edge. This led to speculation of the NHL’s motives to hand the team off to Reinsdorf for relocation.

Ice Edge could not obtain the necessary deal with the City, and not surprisingly had to pull their bid, but somehow feel that they can obtain a better deal “post-bankruptcy”.

So what’s up ?

Why does the NHL and Ice Edge so desperately want to get this team out of bankruptcy?

The motivation of the NHL preferring Reinsdorf would suggest the coalition representing Reinsdorf, including Tony Tavares (Sports Properties Acquisition Group), impels one to believe this team has been branded for relocation . The NHL would then have effectively taken Glendale for a ride.

Since Jerry Moyes put the team in bankruptcy, the lease and lease penalty has been the contentious issue. The one year out clause  included in the NHL offer conveniently allows them to get off the hook to relocate the team, and Glendale would  have no recourse having agreed to it in bankruptcy.

In other words, thanks Jerry (Moyes). You solved our problem! Your chapter 11 and the NHL plan was the perfect solution to move the team.

But wait, hold on.

The Balisillie team has realized that there is something awry in the NHL bid, and they are questioning the motives of the NHL. They are effectively giving the City of Glendale a better guarantee (an insurance policy) against the league’s  planned deceipt.

The local buyer will in effect have to buy the team as Jerry Moyes left it – concession free, or it’s no deal.

In other words, it’s time to put your money where your mouth is. There will not be able to be any secret deals. The offer you get will be the same circumstances Jerry Moyes was under, as he was unable to turn a profit.

You want the Coyotes, you will be inheriting the City of Glendale’s expectations, as they were imposed upon Jerry Moyes.

Quite simply, alterior motives or secret deals will not be possible.

The PSE group is so convinced that there will not be any buyers willing to be locked into that liability, that they are offering the City of Glendale $25 million either way.

As Judge Baum would say:

“to an old bankruptcy judge, $25-million in cash no matter what happens seems like a big change.”

PSE, in short, is willing to gamble $25 million that there will not be a local buyer that will satisfy the terms the City of Glendale has in place.

PSE is ready to write that cheque with the support of the City of Glendale, regardless of  NHL appeal or not.

That’s confidence.

It’s now time for the NHL to wonder how they will get out of this. Likely not too well it would seem, as this game is over. Judge Baum had commented, regarding mediation:

“My blunt guess is I see no prospect of settlement under the present posture of this case,” Judge Baum said.

And, my guess is that with the Canadian Competition Bureau on “stand by”, Baum knows something we all don’t, and he has further demonstrated this fact with a distant ‘who cares’ attitude to the Eugene Melnyk radio commentary. No, his only concern is the appeal of the NHL.

 The veto issue would appear to not be an issue at all for Baum.  It should be as big an issue as the NHL appeal, but isn’t. Now, isn’t that interesting? Would this explain the confident press release of the CCB?

In an all we got left effort, SOF and the NHL are continuing to pressure the judge to render a decision.  What are you afraid of boys? The tension getting to you?

“Desperation” after all is the word the  NHL has used repeatedly referring to Moyes and Balsillie’s attempts to convince the judge and the City of Glendale about their position.

Yes, the NHL is becoming desperate.

But something tells me this judge  is going to ensure he takes his time in drafting his decision. After all, the NHL will be challenging him in appeal, as Goldfein so obnoxiously and repeatedly emphasized .

And, the longer the delay in moving the team to Hamilton, the NHL will be responsible for those losses too. Poetic justice best served cold.

Jim Balsillie and his legal team have outdone themselves on calling the bluff of all the parties.

Like saying, “okay, do what you say you will. Find a local owner. But if this team is relocating it is mine”.

Jim Balsillie is ready to write that cheque for $25 million, and put his money where his mouth is.

First the cheque, then the ‘check mate’.

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One response to “Cheque, and a 'check mate' to come

  1. Pingback: Are we onto ‘Something’? Time for the ‘Real Truth’! « Make It Eight, eh? Hockey again for Winnipeg!

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