Thursday, June 28, 2007

Balsillie gets the Boots

Canadian billionaire Jim Balsillie's deal to purchase the Nashville Predators of the NHL and relocate the team to Hamilton appears unlikely as the current owner prepares to announce an exclusive deal with a new bidder, the National Post has learned.

According to sources familiar with the events, Craig Leipold, owner of the Predators, informed Mr. Balsillie late Monday — less than a week before their deal was to close on June 30 — that he has decided to walk away from the US$238-million offer announced last month. Instead, he plans to pursue a less lucrative bid from California businessman William (Boots) DelBiaggio. It is widely expected that Mr. DelBiaggio will relocate the Predators to Kansas City once Nashville's lease at the Sommet Center arena expires.
This looks like the story of the day.

But the key passage in this piece comes a little ways down, where yet another of those anonymous sources that have become so integral to fleshing out the details reveals that grandmaster Gary Bettman is behind the latest machinations playing out in the press:
...others say Mr. Leipold, who is expected to sign a binding, exclusive deal with Mr. DelBiaggio's group Thursday, has accepted substantially less money as a result of intense pressure from Mr. Bettman, who wanted to usher a team to Kansas City.
Colour me unsurprised.

You know, it's no secret the NHL is dying to fill that void in Kansas City (the empty arena, not the need for a hockey team), but to go to this extent? To deny loyal soldier Leipold somewhere in the neighbourhood of $50-million and somehow get him to go along with that decision?

That's an interesting development.

It had always been posited that Balsillie had created some leverage by serving up so much for the Predators, outbidding all sane offers by a wide margin and, as they say, making an offer Leipold couldn't refuse.

Even insane funds, it seems, aren't enough to knock some sense into the NHL, and especially so when the source of those funds is a Canadian billionaire who dares to get in the way of a ridiculous plan to relocate from one terrible market to another. History has shown this to be a tried and true plan of attack for the league, one that has seen clubs move from Oakland to Cleveland to the dustbin, and, yes(!), even from beloved Kansas City to Colorado, where the Rockies lasted four seasons before moving to New Jersey.

Lately, the Devils have been ailing, while hockey has boomed in Denver. Follow the bouncing ball.

History has shown that what the NHL and its merry band of grumpy governors want, they get, and this has been a league hellbent on moving into more American markets since the original expansion days in 1967. We'll have another hockey franchise in Missouri as soon as possible, whether that makes sense (financially or otherwise) or not.

The Board of Governors are heavily influenced by the money-making Maple Leafs and the ignorance of many of the American owners, wealthy men who "think a team in Hamilton might erode the 'major league' status of the NHL."

So while the leadership clutches for dust, Mr. BlackBerry gets blown away.

As much as I'd like to see Balsillie join the BoG ranks and shake things up a little bit in that stodgy group, it's probably best if he walks away now, saving himself — and those 14,000 fans that have purchased tickets in Hamilton — more grief. It's going to take more than one renegade would-be owner in order for the NHL to ever serve up a team to Balsillie; there will also have to be someone on the outs who has the willpower to stick it out through an ugly, tedious and expensive battle with Bettman and friends.

Leipold's had enough of the sideshow, both in terms of ownership and checking out, and who can blame him? He'll take the money the NHL wants him to, rather than fritter away his unexpected profit on the legalities involved in accepting the highest bid.



At 11:22 a.m., June 28, 2007, Anonymous Anonymous said...

Nice that the city is funding the majority of the cost of the project.

"The $276 million public/private project is being funded in part by the city of Kansas City, which will contribute $184 million initially and up to $16 million more if needed. The revenues for the city's share will come from a $1.50 business fee applied to hotel rooms and $4.50 increase in the daily car rental tax approved by voters in August. There also will be a 2.275 percent user fee on all ticket sales.

Anschutz Entertainment Group (AEG) will provide $50 million for the arena. AEG will also cover any construction overruns. Sprint Corporation has agreed to pay up to $2.5 million annually for 25 years for the naming rights to the overall facility. The National Association of Basketball Coaches will provide $10 million"

I would assume that KC is small enough to qualify for the league's welfare fund?
Seeing that KC can't support the Royals and that the Chiefs rule, this looks like an absolutely Bettman-esque type of deal.

At 11:27 a.m., June 28, 2007, Anonymous Al said...

Fire Bettman!

At 11:34 a.m., June 28, 2007, Blogger The Forechecker said...

It's been said before, but is worth bringing back up - Kansas City just might be the worst place in the US to put an NHL team right now.

I wonder how DelBiaggio views the Predators lease, and if the magic 14,000 mark gets hit, whether he'll try to weasel out another way. It's looking increasingly likely that the mark will be hit, making relocation a thornier issue.

At 11:45 a.m., June 28, 2007, Anonymous David Johnson said...

The anti-Bettman crowd might suggest the NHL is doing this because they don't want a team in Hamilton and would rather have a team in another non-hockey market like Kansas City.

The 'NHL owners are greedy' crown might suggest the NHL doesn't want Balsille to buy and relocate the Predators to Hamilton because the NHL feels they can extract more money from an expansion Hamilton franchise than an expansion Kansas City franchise. An extra $50 million in the sale of the Nashville franchise goes into Liepold's pockets. An extra $50 million in terms of expansion fee goes into the pockets of all the NHL owners.

It wouldn't surprise me if the latter is the case because the NHL owners have time after time shown they have no real viable long-term vision for the NHL and love the idea of collecting expansion fees regardless of the impact of having too many teams in the league is.

At 12:31 p.m., June 28, 2007, Blogger Ben said...

I hope Balsillie tells the NHL to go to hell now. Not that I don't want him to own a franchise, but the man has been willing to buy a dieing NHL team twice now, and twice he has been shot down.

The best way to damage the NHL now is to not try again... jerks.

At 12:33 p.m., June 28, 2007, Anonymous Anonymous said...

Population of Kansas City 451,717

Population of Hamilton 504,559

I don't get how people see Hamilton as being too small a market. I mean, sure, Kansas City is the centre of a larger media market, but Hamilton is surrounded by millions and millions of fairly well off Canadians.

Also, I don't see why Leipold would give in to pressure from Bettman at the cost of $50 million. What does Leipold care what Bettman thinks of him once he's no longer an owner? He should just take the money and run. If the team is leaving town either way, giving up all that money seems pretty stupid.

At 12:52 p.m., June 28, 2007, Blogger Hossim said...

It might be the heat or I might just be slow in general, but I'm having a hard time wrapping my head around one of the aspects of this whole deal. The contract that Mr. DelBiaggio has with the Sprint Center in KC is with the Anschutz Entertainment Group (who owns the building). AEG also owns the Los Angeles Kings.
I'm thinking the responsibility for the KC decision which has been attributed to MLSE, Buffalo and Bettman should also be directed to Tim Leiweke, the President of AEG, a member of the NHL Board of Governors expansion committee and a top executive of the Los Angeles Kings.
Now, I'm not a corporate lawyer (or any lawyer for that matter) but it appears that a hockey team in KC puts more money into the corporation that owns another hockey team. But I still don't think that explains Leipold's decision to sell for less money? Unless perhaps he was told that if he wanted to buy another expansion team (say in Wisconsin) the fees would be reduced or he would be favored.
One final note along the lines of the bouncing ball that James mentioned, AEG stands to own the Hartford Civic Center this fall. Maybe when KC fails they can bring back the Whale.

At 12:54 p.m., June 28, 2007, Blogger PPP said...

Any proof that MLSE did anything to stop this move? Or is it just that EVERYONE loves laying the blame at the feet of the richest franchise?

They would have benefitted greatly from a team in Hamilton (LeafsTV, Copps Coliseum) and have never made a public announcement one way or the other.

At 12:56 p.m., June 28, 2007, Anonymous Anonymous said...

Just one more thing Bettman has done to ruin the game and screw Canada and hockey fans...

At 1:23 p.m., June 28, 2007, Blogger Bitchany said...

This is getting a little out of control

At 1:37 p.m., June 28, 2007, Anonymous Anonymous said...

How come Balsillie is getting away without any criticism? Basically he's screwed up TWICE in getting NHL franchises that should have been straight forward transactions. All he had to do in Nashville (and in Pittsburgh) is play nice with others for a year or two and then move the team where he wanted (or in Pittsburgh, sell for a profit). His ridiculous challenge to the Commissioner and other owners by trying to jump the queue on moving the team, and by also royally screwing both fans in Nashville AND Hamilton, Balsillie deserves a high stick to the chin. Why is it that rich guys always think the rules don't apply to them?

At 2:28 p.m., June 28, 2007, Anonymous David Johnson said...

His ridiculous challenge to the Commissioner and other owners by trying to jump the queue on moving the team, and by also royally screwing both fans in Nashville AND Hamilton, Balsillie deserves a high stick to the chin. Why is it that rich guys always think the rules don't apply to them?

Funny that this has never been an issue with the other ownership group that has also made it perfectly clear it has no intentions to keep the team in Nashville (or the Penguins in Pittsburgh). That group wants to buy a team and move it to Kansas City. Balsille hasn't really done anything different except that he chose a far more viable market which is located in Canada.

The NHL keeps trying and trying to build a hockey market where one does not exist all while ignoring a hockey market that does exist. It's a failed business plan but they keep trying. Don't they define idiocy as trying the same thing over and over again but expecting different results? Well, that seems to apply to the NHL here.

At 2:38 p.m., June 28, 2007, Anonymous Frank said...

All right boys and girls, rant and rave against Bettman and the American owners of the NHL, call them evil incarnate if you want, but they are not the ones who scuttled Balsillie and Hamilton.

Use some logic instead of emotion. Who has something to gain and who has something to lose from this deal.

American owners have everything to gain and nothing to lose from the deal. Balsillie's offer increases their franchise value, it moves a team from taking revenue sharing to one which contributes, and it leaves in place Kansas City as a future expansion site at a fee of $150 million, or $5 million in each owner's pocket.

So who has something to lose. Well first of all there is Bettman
and his overblown ego. But lets remember Bettman is simply an employee - a highly paid bureaucrat. The American owners will go along with him as long as they think its in their interests. However, if Bettman wants them to do something against their interests, they will fire his ass out of the commissioners job in a second.

Next come the other Canadian owners - apart from MLSE. While they publicly say they would like to see another Canadian team, behind the scenes, and at the BofG meetings, they are telling the American owners to kill the deal because Balsillie is a rebel and will cause nothing but trouble in the NHL. Is that the real reason they don't want Balsillie and Hamilton. No, the real reason is that they don't want to split that lucrative CBC and TSN national TV money 7 ways, they want to continue to split it 6 ways.

Next come MLSE. Well its obvious why they don't want Balsillie in the picture. And its not just the money. God forbid, with Hamilton down the road they may actually have to shape up and become a competent organization.

So how did the Canadian owners go about scuttling Balsillie's bid with the other American owners. Well they knew they couldn't argue that it was a bad financial deal for the other American owners, so they came up with the strategy to paint Balsillie as a rebel who would upset the league.

And they also took this strategy public using the Globe and Mail and TSN (all part of the MLSE/CTV Globe Media conglomerate). Suddenly, articles started appearing from Mr. Shoalts at the Globe, using anonymous sources, calling Balsillie a "rogue" owner who would really shake things up in the NHL, and that he was unpredictable, impetuous and a trouble maker. The classic was the article by the Globe business reporter who quoted an anonymous source who said Balsillie would rather "cut a competitors throat" than lose to him in a golf match. This public "character assassination" was picked up by Bob McKenzie at TSN who started bashing Balsillie on a regular basis.

In any event, the strategy has worked and the American owners have been scared into not approving the Balsillie bid. And Hamilton will not get a team, not because of the American owners, or even Bettman, but because of MLSE and the other 5 Canadian owners.

Now I'm old enough to remember the 1967 expansion of the NHL and how Vancouver was shafted out of a team - not by the four American owners - but by the two Canadian owners Conn Smythe and Senator Hartland Molson, again because they did not want to split national TV money.

Following that rejection, the Vancouver fans put real political pressure on their MPs and Senators to tell PM Trudeau that this was unacceptable. In turn the PM had a little chat with Mr. Smythe, Sen. Molson and the NHL Commissioner and told them that it might be in their "best long term interests" to let Vancouver in at the next opportunity. In other words he made them "an offer they couldn't refuse". Surprise, surprise, in 1970 there was a special expansion letting Vancouver into the league with Buffalo.

So the lesson to you southern Ontario hockey fans, is the only way you will ever get a franchise, is to use your political clout, and let our so called "hockey fan PM" know that he only gets your vote if he uses his political muscle with MLSE and the other 5 Canadian owners to make it happen.

As for you ppp, if you don't think, money, corporate power and concentration, cross - media ownership and politics are not all intertwined in this country, then you were indeed born yesterday!

I bet you beleived Ken Lay when he told you Enron was in good financial shape, and bought stock while he was selling his!!

At 2:50 p.m., June 28, 2007, Anonymous Anonymous said...

Do the Canadian teams really split the Canadian tv money? I'd always assumed it went to all the NHL teams.

At 3:11 p.m., June 28, 2007, Blogger PPP said...

Frank, that's a nice story you wrote but is there any proof that MLSE did anything to scuttle the deal?

Any proof whatsoever? One of the corporations most profitable (if not the most) is the property management (Oshawa Sports and Entertainment Centre, ACC, BMO Field) and Balsillie was prepared to give them the rights to operate Copps Coliseum.

In addition, LeafsTV would have probably been able to air Predators game and most likely received permission to sell the channel outside of the current area.

Both of those would make MLSE millions of dollars and more than offset the few fans that might abandon the team.

As for the media angle, if MLSE actually controlled any aspect of CTV/Globemedia then why wouldn't they use that power to get more favourable press?

If you think it's some huge conspiracy theory aimed at protecting a monopoly (that would barely be dented even with a team in Hamilton) then you're probably currently on the lookout for the next Illuminati meeting. I won't intimate that you are an idiot as you did to me but I think your imagination might be running away from you.

At 8:08 p.m., June 28, 2007, Blogger Paul Nicholson said...


I think you got the date wrong.

"...hellbent on moving into more American markets since the original expansion days in 1967."

The last time the NHL was made of mostly Canadian teams was in 1925.

The rest of my response to the news is here and a little rant here.

At 8:36 p.m., June 28, 2007, Blogger James Mirtle said...

For close to 40 years, the NHL didn't even entertain the notion of expansion of any kind.

At 11:09 p.m., June 28, 2007, Blogger Knotwurth Mentioning said...

One thing that Kansas has going for it is the track record of teams moving back into formerly dead markets, though. Minnesota and Colorado in particular are shining examples of teams that had been abandoned and now do quite well in reborn hockey markets, and Atlanta is not doing too poorly, I don't believe.

Of course, each of them had new arenas to move to, as well, I believe, which apparently will not be the case with Kansas. And, of course, not every reborn team will be able to succeed. Pushing his luck will do Bettman in, inevitably.

At 12:23 a.m., June 29, 2007, Blogger Paul Nicholson said...

I know that James. If you followed the link you'd get it.

The point is the NHL hasn't been a predominantly Canadian league (in terms of where teams play) for a very very very long time. I would argue for as long as most of us, and our parents, and many grandparents have been around. The NHL is largely a US league and will be going forward. You aren't going to change that.

I just get tired of Canadian's acting like the sport can only belong to them. Sometimes i think in your perfect world Canada would be all hockey (and hockey no where else), the rural US would be football and baseball (and nothing else), urban US would be nothing but basketball and the rest of the world would divide among futbol and cricket.

Is Nashville hockey-central?
No. But neither is Toronto basketball-central. I love that you have the Raptors though and it serves to grow the game - even if the team has a hard time being successful on the court or off.

Kansas City is pushing the limits of being able to support another team at any level given the size of city it is, but if an owner wants to move a team there, great. More fans. More hockey. Why do you care if the team flounders financially? Why do you care if someone on a hockey blog might use the word "ya'll"?

Please. Really. Answer: Why do you not want hockey in as many places as possible?

At 12:25 a.m., June 29, 2007, Blogger Paul Nicholson said...

Knotworth: Kansas does have a new arena. It has already been built and essentially sitting empty.

At 12:55 p.m., June 29, 2007, Anonymous pete said...

More fans. More hockey. Why do you care if the team flounders financially? Why do you care if someone on a hockey blog might use the word "ya'll"? Please. Really. Answer: Why do you not want hockey in as many places as possible?

Jesus Christ, Paul? Do YOU not get it. This isn't about USA/Canada. There are very healthy US markets. Plenty of them, in fact. I have no issue with those. I welcome and encourage them. Nothing pleases me more as a fan than seeing fans of other teams that are just as fired up and passionate as I am.

This is about the city of Nashville. They've proven they can't support one of the league's elite teams, despite having some of the cheapest tickets in the league.

Nashville doesn't work as a hockey market. I'm sorry, but it doesn't. There may well be die hard Preds fans, but there are simply not enough of them.

Now, once we accept that Nashville won't support NHL hockey, the obvious question is: who will?

The NHL has a patently obvious answer sitting there facing it, but because of a stubborn, foolish refusal to admit a mistake, and a continual chase for a pie-in-the-sky US TV contract, they're about to replace one doomed franchise by parachuting it into a city, Kansas, that's destined to do the same.

The whole thing is just ridiculous. The reason I, and I suspect so many other Canadians, don't like this one bit is because our beloved game is being run by idiots who don't have a single strategy beyond the failed one they've been pushing for more than a decade, and worse, they don't care.

It's one thing to be greedy. Hell, Canadian owners are among the greediest.

But what really burns about this is that we're forced to watch as something we cherish gets battered around and cheapened, all for the benefit of people who demonstrably shown again and again they have no interest or desire in it.

This whole debacle will amount to nothing more than pissing off a few tens of thousands of Tennesseans, please about the same number of Missourians, and throw an entire Canadian city under the bus because they have the audacity to ALREADY LIKE HOCKEY.

If this is what passes for "growing the game" then I hope professional hockey shrinks back to the size it was when it began -- a bunch of dudes on a frozen pond somewhere in Canada.

It's perverse.


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