Thursday, July 05, 2007

Balsillie prepared for a fight

I didn't get a chance to catch the program until late last night, but the Fan 590's Prime Time Sports had Jim Balsillie's lawyer Richard Rodier on the air for a solid 20 minutes yesterday, and the tone of the discussion was remarkably different from Rodier's earlier appearances.

Among other things, Rodier said Balsillie wasn't going anywhere in his bid to put an NHL team in Hamilton and that they were prepared to fight NHL commissioner Gary Bettman tooth and nail for the chance to do just that. It seems clear Balsillie knew he would meet with considerable opposition from the league in the beginning, which seems to be why he approached and negotiated with Nashville Predators owner Craig Leipold without Bettman's knowledge.

Interesting news, yet again.

Allow me to quote Rodier at length in the passages below:
I think that there is a gag order in place where the governors have been told not to speak, I think, to the media.
Has the commissioner intimidated Mr. Leipold? Well, he didn't know that we were talking to Mr. Leipold until, as I understand it, Darren Dreger called him and said 'I understand there's discussions going on between Balsillie and Leipold, and they're about to sign a letter of intent.' And I think the commissioner was caught by surprise and then called Mr. Leipold and tore his head off. He instituted what has been called a cease and desist order, essentially forbidding Craig to talk to us.
And, why, Rodier was asked, would the commissioner shut down those negotiations, reprimand Leipold and attempt to give Balsillie the boot?
I think part of it is that the commissioner wants this team to go to Kansas City and that's why he forbade Craig from talking to us, but allowed them to continue to discuss things with Kansas City.
Rodier also intimated more than once his belief that 'the governors call the shots,' meaning that, regardless of what Bettman wants out of this process, Balsillie and his legal team are looking to take direct aim at the NHL ownership groups in the hopes that they could win support, and a vote, that way.

Ultimately, Rodier said, that support is all that matters.

As a closing bit of interest, do note this passage from Mr. Rodier's online curriculum vitae:
Richard's subspecialty expertise is in banking, acting for both financial institutions and borrowers in connection with complex secured lending transactions, including financing of acquisitions, hostile take-over bids, sub-debt financing, and equipment leasing.
Hostile take-over is good phraseology for what I think is going to be attempted here — and Balsillie's chances might just be a matter of finding an owner with the fortitude to ignore the bleating of the league's very own Napoleon.

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16 Comments:

At 2:48 AM, July 05, 2007, Blogger J. Michael Neal said...

I have a feeling that Bettman is now fighting an opponent that's out of his league. Balsillie and his lawyers swim in waters where the sharks are big, mean and are out to rip your face off. Very few people in sports are used to this kind of opposition. As I've said before, the leagues all operate as a risk-free country club where they keep the waters placid by telling people like Balsillie that they aren't welcome. Mark Cuban acts like a big shark (and I like him a lot), but owning the Mavericks is really a retirement gig for him.

Now, the league rules may operate in such a way that they'll prevent Balsillie from winning this bid. If there are any loopholes there, this crew is going to find them. My suggestion for Bettman is to find himself a top rate law firm that specializes in this sort of thing. I hope he doesn't take it, because his is the face I want to see ripped off here.

Regardless, I'm stocking up on popcorn, because this is going to be entertaining to watch.

 
At 3:36 AM, July 05, 2007, Anonymous Anonymous said...

Very few people in sports are used to this kind of opposition.

Where do you think sports owners come from? Most owners while maybe not as rich as Balsillie, they've all had to play in the same waters and for a lot longer. Don't kid yourself there are owners in this league that have chunks of guys like Balsillie in their stool. There are many and various ways that a commissioner or a block of owners can make Balsillie's franchise hurt. You get more bees with honey than vinegar, a lesson Balsillie seems determined not to learn.

 
At 4:27 AM, July 05, 2007, Blogger Michael said...

Amen on what Anonymous just said.

NHL: Canadian carpetbaggers need not apply.

 
At 5:13 AM, July 05, 2007, Anonymous Anonymous said...

Considering what some folks think about RIMM and how aggressive they are in their accounting, perhaps the league doesn't want another John Spano amongst their ownership.

Perhaps if he liquidated some holdings to pay cash in these transactions the league wouldn't have as much of an issue.

I don't know all the details, but if a guy with "that much money" was sitting around, for them not to want to give him the time of day speaks volumes.

But that's just me.

 
At 9:36 AM, July 05, 2007, Blogger Paul Nicholson said...

At this point, as much as Balls-y is determined to piss everyone off, i have to wonder if he isn't thinking about buying the whole of
the NHL and getting rid of Bettman himself.

Is that even possible?

And as a fan of the Predators in Nashville...i wonder if that would be an entirely bad thing for the league, even though it would likely mean the eventual loss of my team (in 7-8 years when the new owner is allowed to break the lease).

 
At 9:57 AM, July 05, 2007, Blogger mike said...

Bettman is acting in a foolish manner, and should be gotten rid of by the owners at last for this latest misstep. To grant a franchise to a disinterested American city that lost an NHL franchise a mere 3 decades ago is insane; KC has proven over the years that the sport it prefers to support above all others is NFL football.

As I've said here before, there needs to be some sort of legal stipulation where cities that fail to support a professional franchise (resulting in either the franchise folding or moving) are blocked from further franchise acquisitions, whether through expansion or relocation. To ignore a potentially vital market like Hamilton in favor of a dismal and moribund one like KC is the type of decision that should get a commissioner fired.

I am not as optimistic as some of the commenters regarding Balsillie's legal options, since American courts favor a hands-off policy towards pro sports leagues. It's probably a runoff from American baseball's antitrust exemption.

 
At 10:05 AM, July 05, 2007, Blogger Pete said...

Ultimately, Rodier said, that support is all that matters

This is what has always confused me about this. Much as well all like to bitch about Bettman being an omnipotent overlord, he's not.

He gets paid by the owners, who, by and large, have a primary interest in making money, via revenues and increasing franchise values.

If Balsillie can convince a majority, or even some, of the owners that it's better for all their wallets to have a team in Hamilton than it is to have one in Nashville or KC, there's not a lick that Bettman can do about it.

I think that's Balsillie's best bet. He can use the arguments that have already been bandied around -- Leipold is happy because he gets at least $50-million more than he would anywhere else. Most other owners, I suspect, would be better off due to the temporary jump in all franchise values. And a select few are better off under teh revenue sharing plan because you take a team that takes $14-million a year out of the pool, and turn it into one that's putting a comparable amount into it.

Like I said, that'd be my strategy if I was Balsillie. "Forget what this little dweeb is telling you. You guys call the shots. Let me into the club and it's better for all of us."

 
At 10:18 AM, July 05, 2007, Blogger Paul Nicholson said...

Most other owners, I suspect, would be better off due to the temporary jump in all franchise values. -- pete

Explain that to me. I haven't understood that. If they aren't looking to sell, why would a temporary raise in franchise value help the owners? They don't actually gain any cash from it do they?

---------------

In related news, Ecklund supposedly has a source claiming that new Nashvillian and Mark Cuban business partner Todd Wagner is apparently interested in getting involved in the local bid for the Predators. if that is true, then they have someone with pockets as deep as Balsillie's, though he apparenlty isn't interested in 100% ownership.

Sounds like pure speculation/rumor to me, but why not one more thing to make this more confusing.

 
At 10:20 AM, July 05, 2007, Blogger The Forechecker said...

An important point to remember is that hostile takeovers involve gobs of money brought in to buy public companies, toss out the management and remake the business. The NHL, as a confederation of private enterprises, doesn't fall into that category of prey.

It'll take quite a bit of butt-kissing and bribery (err... market-infringement compensation) for Balsillie's dream of a Hamilton NHL franchise to come true, no matter how alluring his New Economy Billionaire status appears.

 
At 11:23 AM, July 05, 2007, Anonymous degroat said...

I don't think this is as much about Kansas City as people are making it out to be. That's just the convenient excuse for the people who falsely believe that Bettman is anti-Canada. This is about Basille's tactics... about him taking season ticket signups for a team in another city... about him getting lease agreement for a team in another city.

If you were another NHL owner would you want this guy involved in your league? This guy thinks he can do whatever he wants because he has money.

There's a way that he should be conducting himself and he's simply not doing it... and now that he has the rights to the Hamilton arena the chances of getting another Canadian team are even less.

 
At 11:34 AM, July 05, 2007, Anonymous Baroque said...

If you were another NHL owner would you want this guy involved in your league? This guy thinks he can do whatever he wants because he has money.

Why not? The other owners (at least some of them) are probably rich enough that they know perfectly well that they CAN do whatever they want because they have money. Balsillie might be a little more brash than they are, but they speak the same $language$ at the heart of the matter.

And maybe the other owners care about the perceived values of their franchises because they use them to leverage loans for other business enterprises, or something? Just a guess--I'm not an economist.

 
At 12:11 PM, July 05, 2007, Blogger All Blog Spots said...

nice blog

 
At 12:14 PM, July 05, 2007, Anonymous Anonymous said...

LEt Nashville move to KC. Balsillie should look at the Panthers and Move them. Miami has really odne nothing for the team since their only apperance in the Finals

 
At 6:06 PM, July 05, 2007, Anonymous Rickster said...

[Bettman] didn't know that we were talking to Mr. Leipold until, as I understand it, Darren Dreger called him and said 'I understand there's discussions going on between Balsillie and Leipold...'

Darren Dreger: an obstacle to NHL hockey in Canada. He should be the one shipped to KC. What a douche-bag.

 
At 7:48 PM, July 05, 2007, Anonymous Anonymous said...

"Balsillie and his lawyers swim in waters where the sharks are big, mean and are out to rip your face off".

I am afraid you don't know very much about the legal field, sir. Gardiner Roberts is a lower tier Bay street firm. They have outstanding strength in health law. They are not a player in corporate and commercial law, much less mergers and acquisitions.

Rodier himself is NOT an M&A guy by any stretch of the imagination. He is a banking lawyer who appears to have worked on a few (and likely very few) deals acting for financial institutions who were financing a bid. His very presence on this proposed transaction has actually made me arch my eyebrow, as Balsillie is using him instead of longstanding RIM counsel McCarthy Tetrault (a megafirm that has all of the disciplines and expertise in M&A, cross-border transactions, tax, litigation and in particular the very specialized field of competition law). It is fair to say that, in the area of M&A and corporate commercial law, Gardiner Roberts is not on the map. At all.

I had hypothesized that perhaps Rodier was someone who had recently migrated to Gardiner Roberts from one of the big firms who actually are players and was essentially a one man band creating a new presence from scratch. As it turns out, Rodier has spent his career bouncing from relatively small firm to small firm. So much for that theory, I discovered.

Please note that I do not mean to criticize Rodier; he may be a fine lawyer, for all I know (notwithstanding the absence of a sound legal strategy on this transaction). However, he is not exactly a "big, mean shark".

As to your other comments, the NHL has owners who can buy and sell parvenus like Balsillie a dozen times over before lunch. Almost all of Balsillie's wealth is comprised of RIM shares.

Cheers,
Gerald

 
At 2:10 PM, July 06, 2007, Anonymous Anonymous said...

If Bettman wasn't around, there would be a thriving team in Hamilton next year, and the NHL would be headed in the right direction. Instead, there's going to be another city in the U.S. that isn't into hockey, and thus, can't support a team... and no one will be able to watch the games anyways, because they are on VS..

Get rid of Bettman already!!! How dumb are these owners?!

These guys know what's up:

http://www.FireBettman.com

 

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