Wednesday, July 11, 2007

Does Boots have cold feet?

"There's been all this speculation because I've been out there very publicly saying I want to bring a team to Kansas City, either through relocation or expansion. (But) it's also public that Nashville is not easy to get out of there."
"I really just don't want to comment on anything. I think this whole thing has been blown out of proportion."

On May 24, Jim Balsillie signed a letter of intent to purchase the Predators.

On June 15, Craig Leipold announced that he had invoked an escape clause in the lease with the city of Nashville that would allow the franchise to move.

Less than two weeks later, Leipold informed Balsillie that he had turned back to Del Biaggio.

The next move, it would seem, is up to Boots.

Del Biaggio became the front-runner for Predators by default after Balsillie fell out of favour, but given the BlackBerry king has been blackballed by the league, I wonder just how much Boots will now be willing to pony up for a franchise potentially mired in litigation that could keep it in Tennessee indefinitely. His reported offer of $190-million was only in response to a bidding war initiated by a "renegade" party now out of the mix, and aside from a late-arriving local group that wants in (for substantially less, apparently), Del Biaggio's on his own.

And despite reports out of Nashville yesterday that optimistically account for the possibility of Boots owning the team in that city, I think he has just as much interest as Balsillie in taking over Leipold's sinking ship and covering the losses.

Del Biaggio's role here is as the middleman for the Anschutz Entertainment Group, with whom he has a contract to operate an NHL team at Kansas City's new Sprint Center. AEG president Tim Leiweke factors in here given his role as the president of the Los Angeles Kings, and Phil Anschutz himself wants to see a team in the now empty rink his group has signed on to operate.

Leipold doesn't want the team in Nashville. Neither does Balsillie, Del Biaggio, Leiweke or Anschutz.

K.C. is Boots's one and only play, and it always has been. Commissioner Gary Bettman whispered in the venture capitalist's well-connected ear after the Pittsburgh nonsense that a franchise would be made available for the open arena owned by these friends of the Board of Governors.

Whether or not that ultimately ends up being the Predators is all that remains to be decided.

But if Del Biaggio decides the Nashville situation is too volatile for him to sign on the dotted line, where does that then leave Leipold? And just how long will he hold the bag at Bettman's bidding, ignoring the elephant of an offer from north of the border as he's forced to entertain the minnows looking to keep the team at home?
"I believe Boots and his group will step up and get an expansion franchise if there is one to be had," Leiweke told a Kansas City reporter in May. "In the meantime, we're going to try anybody and everybody that ultimately is in trouble. We're willing to be used a little bit if that's the process it takes to get Kansas City a team."
There are sharks in the water, to be sure, and they don't have designs on helping Leipold or Nashville's fanbase, not when there's a buck to be had in another untapped market.

Just ask Bettman:
"The best thing Kansas City can be is patient. These types of processes take time. I don’t know if anyone thought that the building would have a tenant overnight. ... But Kansas City put itself on the map as an attractive, viable place for a future arena franchise, be it the NHL or NBA."
Translation? Hockey's coming to Kansas City, as soon as we can get it there.

Here's one final bit of business to contemplate: If you're Del Biaggio, shouldn't there be just a wee bit of concern that, 10 years down the road, you may very well be the NHL's next Leipold?

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At 5:04 a.m., July 11, 2007, Anonymous Anonymous said...

10 years down the road, you may very well be the NHL's next Leipold?

Especially because in ten years theres no guarantee that there'll be another Balsillie.

At 8:41 a.m., July 11, 2007, Anonymous Anonymous said...

Why should any Canadian entrepreneur with the cash go through that dog and pony show?
It's obvious the little dictator doesn't want another Canadian team sullying up his ever so precious hockey league.

At 9:21 a.m., July 11, 2007, Blogger BlackCapricorn said...

Seeing this insistence on putting a team in KC is just infuriating to me as a hockey fan. I suffered through the lockout with the hope to come out the other side with a healthy league. The last 2 years has seen the league struggle in certain markets with attendance and with accessibility issues on tv (as well as quality). The LAST thing this league needs to to expand into a questionable market when all indicators seem to point to shoring up the base first and only expanding or relocating into guaranteed hockey markets (i.e., southern Ontario). This blind march on Bettman's part makes me think that in short order either he goes or the league goes.

At 10:10 a.m., July 11, 2007, Anonymous Anonymous said...

But being Commissioner of the NHL means you can go on CBC and lie to Canadians about "intriguing" possibilities of going into Winnipeg and Quebec City again.
Funny, don't both those cities lack significant corporate support for a team? How is Quebec City going to find an ownership group and build a new arena when no one wanted the Montreal Canadiens when Molson sold to Gillet?
Bettman just likes to pretend to stroke our egos about our game.

At 1:45 p.m., July 11, 2007, Blogger Jeremy said...

Great summary I've seen of the current situation in Nashville.

At 1:46 p.m., July 11, 2007, Anonymous Anonymous said...

To Bettman: oh what a tangled web we weave when we try to deceive!

This whole affair is headed towards massive civil suits for damages by all parties concerned. Once the legal paper starts flying, the majority of the owners of the NHL (those outside of Bettman's little power circle) will get together to take control of this issue and vote to give Nashville to Balsillie (provided he pays reasonable compensation to Toronto and Buffalo) and an expansion franchise to KC at a reasonable price.

The good side of it all, is that Bettman's power will be severly diminished by the BofG and he will be put on a "short lease", with one more screw up resulting in termination.

At 6:11 p.m., July 11, 2007, Anonymous Mr DeBakey said...

So why doesn't Leipold run the team in Nashville this season
- as close to the salary floor as possible
- no marketing
and so forth

Then move the team to Hamilton next year?

The problem with Balsillie is Hamilton. Yes?

Leipold can just walk around that
Then sell the team to Balsillie later,
in bits & pieces if he has to

At 10:34 p.m., July 11, 2007, Anonymous Gerald Carpenter said...

So why doesn't Leipold run the team in Nashville this season
- as close to the salary floor as possible
- no marketing
and so forth

[Disclaimer: I am not called to the bar in the US. As such, this does not constitute legal advice. However, I have done many a transaction in the US, and am familiar with many facets of US commercial law, particularly those parts which are similiar to that of Ontario. Accordingly, assign whatever value to this you deem appropriate.]

In the US, commercial transactions are governed by something called the Uniform Commercial Code (UCC). It is essentially a codification of the law of contracts and commercial law that has developed in the US.

One of the provisions of the UCC is section 1-304, which provides in essence that the parties shall act in good faith with respect to their commercial dealings:

"Every contract or duty within [the Uniform Commercial Code] imposes an obligation of good faith in its performance and enforcement."

Draw your own conclusions. Incidentally, it is for the same reason that I strongly suspect Balsillie may have screwed his own chances by virtue of his "ticket deposit drive" in Hamilton (an action clearly intended to destabilize the market).


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