Jim Balsillie in happier times Courtesy Winnipeg Free Press

Jim Balsillie, the would-be owner of the Phoenix Coyotes and Eugene Melnyk, the Ottawa Senators owner dropped the gloves in the ever-widening Phoenix Coyotes wrestling match turned blood sport.

The fans of NHL hockey would be OFFside if they thought this legal argument would avoid becoming public and ugly.

The 38 pages of Balsillie dissertation on why he should be an NHL owner was reviewed yesterday. Most of it seemed logical, straight forward and fair. Any hockey fan would agree with most of it. The document challenged previous NHL assertions that seemed rather weak in comparison at best.

Airing Laundry

The document also spilled the beans on the last minute conditions added by the NHL when the Pens were to be sold to Balsillie. If true, it would have forced Balsillie to turn over arena negotiations to the NHL after just 45 days and be bound by the results financially or otherwise including a 7 year non-relocation clause.

And of course it detailed the problems between Leipold and Balsillie regarding the Nashville sale flame-out. It is somewhat unclear as the $10 million purchase deposit may or may not have been at Mr. Balsillie’s option in order to keep exclusive negotiation rights to the Predators.

Consider this talking outside of school on the scale of multiple hundreds of millions of dollars. If true, Balsillie has shown the NHL to be hardball negotiators and also very much in the right to “lockout” Balsillie from their club for making public their private dealings. If false, Balsillie is sure to enrage the NHL leadership and 29 other owners by his allegations. Either way, Balsillie’s decisions in an Arizona courtroom alienates him further from NHL inclusion.

While it was an interesting read, very little of it will have any use in a court of law. Clearly Balsillie is also trying to win the court of public opinion by airing all the laundry from the past.

Crooked Accusations

When it came to his calling out of past and current NHL owners, it is clear that Jim Balsillie still doesn't understand how pro sports business works. Sure he called out easy prey like McNall, Spano and Del Biaggio, who were all found guilty in court and served time or continue to serve time. Even the court has that as a matter of record.

But when he went on to call out Eugene Melnyk (who has also openly called for more teams in Canada) Balsillie just burned a potential ally in his quest.

Now by Melnyk's statement it is clear that he was one of those owners that was softening his stance on Balsillie’s inclusion until the Coyotes story started. (This was reported by the media several months ago but never were owner names used.)

So if Balsillie is calling current and former owners potentially crooked, you can understand now even more why the NHL owners wish to avoid having him around their board room table much less their hockey rinks.

Private Versus Public

The trouble for Balsillie’s court case is that the NHL is not the FBI in regards to its’ background checks. And remember that even the FBI took years to uncover those past illegal dealings, most of which happened after they became NHL owners. So when the NHL claims that they decide who they wish to be an NHL owner, it no doubt is more of a business acumen and courtesy contest with a routine criminal record check. With severe charges and fines within Ontario regarding the large magnitude of backdated stock options for his RIM corporation, Balsillie is lucky to not have earned jail time. That whole experience is enough reason for the NHL to fail him as a potential owner. And the NHL has that right to disclude others from their private business partnerships. Balsillie’s case has very little in the way to overturn that point in law.

What Constitutes An NHL Franchise?

Since the teams are a matter of NHL property licensed to an owner for a specific market catchment, the NHL can decide who will own teams and where they are located. The question for the courts to decide is whether bankruptcy also negates those franchise obligations like that of other contracts including leases at respective rinks. Or are these “obligations” of the franchise intrinsic to the hockey club itself? For if the rules of ownership laid out in the NHL constitution can be ignored via bankruptcy then what other constitution clauses and by-laws can be circumvented by Balsillie or all other 30 owners in the future? Just what exactly is bankruptcy court selling? Is it a portable severable team or one of 30 licences for Phoenix? This is the case in a nutshell.

Clearly, this is no way to get into the "NHL club" and it certainly will be a rough ride for him in the future should he be successful using the court to pry open the clubhouse doors.

Court Decision Will Not Help Nor Hinder Winnipeg’s Return

And if the court doesn't grant this team to Balsillie now, the NHL will have this case as precedent to lock out Balsillie for the rest of his life. Now that doesn't mean that the NHL won't expand or relocate teams to Canada (that time is coming soon), it simply means they won't want anything to do with Balsillie. Period.

Expansion or relocation to Ontario will happen, there are simply too many dollars to be made to ignore it much longer. Perhaps even before the CBA gets re-opened when future expansion fees might be shared with the players. And Winnipeg is not just a safe landing strip for a troubled team barely able to continue flying. It offers a real success story to a team and the NHL. As does Quebec City given a new arena.

(click here for Winnipeg financial scenarios: http://www.manitobamythbusters.com/php/index.php?module=pagemaster&PAGE_user_op=view_page&PAGE_id=13&MMN_position=19:6 )

Further to that point, even if a precedent is set to allow troubled pro sports teams into bankruptcy and anyone with enough cash can buy them and then move them where ever they wish the team to play, then just how many potential future owners would play that hand to gain entry into the NHL? Considering so few potential ownership groups want to buy teams today without any hassle, there are few if any who would actually want to ruffle the feathers of his new business partners that way. And that includes many potential ownerships groups wishing to bring teams to Winnipeg, Quebec City, Toronto and yes, Hamilton.

Short Versus Long Term View

If Balsillie gets his wish, it is hard to imagine another team trading players and picks with Balsillie’s team. It is hard to imagine the board of governors giving his team the Entry Draft and the All Star game or other similar perks. Is it possible that the other owners would ban him from their rinks? Without a buying a ticket, it is possible that Balsillie never sees the ice again in Toronto or Buffalo or perhaps any NHL rink regardless of the Coyote case outcome. And that wasn’t the case before the Nashville ordeal started as Melnyk now alludes.

The more one looks at Balsillie’s forceful strategy, the more it looks short sighted. And calling out your potential business partners, like Melnyk, as crooked in a court of law no less seems like the least effective way to get your way.

If your opinion differs, head over to the forum and vent away! www.mbmbforum.com

Chris
Chair, Manitoba Mythbusters
www.ManitobaMythbusters.com
www.myNHLincludesWinnipeg.com

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