There's been a ton of spin on why there are back to back games in the Stanley Cup Finals for the first time in 54 years. And the correct answer has nothing to do with the sudden popularity of hockey, the sad state of affairs at NBC or Gary Bettman's suggestion that we (the NHL) thought we would try something new.
The correct answer is Conan O'Brien.
NBC told the NHL last fall that they would not schedule a weeknight NHL playoff game during Conan O'Brien's premiere week on The Tonight Show. The network wants a killer rating this week to generate a ton of publicity for Conan. And the Peacocks want to do as few weeknight games as possible during O'Brien's debut month to let other programming drive sampling to The new Tonight Show. With all of the talk about the value of franchises around here, remember this...The Tonight Show, now in it's 55th year on NBC is the most profitable franchise in the history of broadcasting. It is the crown jewel of NBC. There is no room this week for a triple overtime hockey game that pushes the Tonight Show back to 1AM.
So that created a problem for the NHL. To gain momentum, the league didn't want to bounce back and forth between NBC and Versus too many times during the finals. While the NBC arrangement is a profit sharing that currently returns about $3MM a year to the NHL, it is still crucial in giving the league mass exposure that Versus can only dream about. And while the NHL could not have envisioned the huge increase in viewing and interest it is experiencing this year, the leagued always views these things in a glass half full way.
The league had a couple of options -- start the finals on or after June 6th, shuffle games between NBC and Versus or play a back to back if they wanted two games in a row on NBC.
Well OK. Putting the Finals off until June 6th would have worked if the Conference Finals were compelling and drawn out. This year, they weren't.
So given the choice of a momentum killing 10 day intermission, the NHL decided that playing back to back on the first weekend of The Finals wasn't such a bad thing. Saturday is the worst night of the week for television viewing and NBC has made a habit of burying as many NHL Finals games there as possible. That's the bad news. The good news is that the league was able to get NBC to schedule Game 2 on Sunday night. Sunday is the highest viewing night of the week. The total audience is usually more than twice as large as an average Saturday. It also marked the first NHL Finals game on a Sunday night in many, many years (I can't find the last one but 54 or 55 years would be a good guess) The NHL also got an extra break when the NBA Lakers eliminated Denver on Friday giving the NHL a clean shot at the sports audience.
Don't underestimate how important a Sunday night game will be to the NHL. On Saturday night, the Red Wings & Penguins game did a 1.7 rating (Adults 18-49) and won the night. If the Sunday game holds form and does something north of a 3.0 it will be a huge win for hockey. Now the league goes back into the witness protection program for games 3 and 4 but the resulting buzz for hockey will be very good this year. If the Penguins and Wings stretch to 6 or 7 games, this series could be a seminal event for the NHL.
Why a seminal event? Because the NHL is talking with ESPN about returning the sport to the big tent of cable TV. ESPN wants to take a big leap by having a professional sports championship won on its' network. Every year, ESPN handles all sorts of sports events but when it comes time for the big one, another network, usually a broadcast network, gets the honors. The NHL would benefit greatly from the added exposure that ESPN could provide and my broadcasting friends tell me that the network is more ready to talk then they have been in the last few years. A great Finals this year with a solid Sunday night rating could push the ESPN negotiations over the top.
NBC would like to keep their hands on hockey for at least another year to cross promote the Vancouver Winter Olympics. Beyond that, NBC can take or leave hockey. The NHL would be wise, incredibly wise, to walk out that door and bring the Finals as well as other hockey programming to ESPN. The income to the teams would be better and the exposure would be immeasurably better.
And they will look back at that Sunday night in 2009 as a night when the league proved it could drive a great rating, create interest in the sport and maybe, just maybe, start reestablishing itself as the fourth major sport in the US.
Update Monday 2:45 PM -- The Sunday night game did good but not great ratings. The game averaged a 3.5 Household rating and a 2.0 (Adults 18-49) The game won the night for NBC and won 4 of 6 half hours, only trailing repeats of The Simpsons and Family Guy.
Sunday, May 31, 2009
Wednesday, May 27, 2009
Cut To The Chase!
So what did we learn today? Well, we now know that Judge Redfield Baum can shake up the lines pretty well. By moving the hearing on the possible relocation of the team from June 22 to June 9, he surprised both sides, stripped away most of the other issues and set up a win or go home scenario for Jim Balsillie. Baum set earlier deadlines for the filing of briefs, moved the oral arguments up almost two weeks and promised that he would rule on the core issue of whether the team can be moved as part of the bankruptcy procedure shortly after the June 9th hearing.
For Balsillie to get control of the team and leave Phoenix behind, he'll need a favorable ruling from Judge Baum. If the judge rules that movement of the franchise cannot be considered as part of his bid to buy the team out of bankruptcy, it's game over for Balsillie. Thanks for playing Jim, drive home safely.
On the other hand, if he rules in favor of the Canadian, it will set off a series of court tests that could last for years and years. The NHL and the City of Glendale will appeal any ruling that does not give them what they want out of this deal. The NHL wants to preserve their constitution and bylaws that give the owners territorial protection and the right to pick their partners. The City of Glendale wants to keep their major tenant. Both the appeals and the injunctions that are certain to follow in rapid sequence would almost certainly keep the team in Arizona for at least the short term and would likely take years to resolve.
It's hard to get a line on Judge Baum. On one hand, he noted that Balsillie's offer is the only offer he's seen or heard of to this point. Conversely, he made it clear to Moyes' legal team that they will need some pretty strong arguments to overcome some of the bankruptcy issues that may not give Moyes a clear title to do what he pleases with the franchise. He would also be getting into an area -- franchise law -- where bankruptcy courts have long respected the contractual rights of the franchisor. That's why he makes semi-large judge bucks, I guess.
One of the issues settled today was the control of the team. Essentially the NHL and the Moyes group agreed to joint management of the asset and agreed to let the bankruptcy play out. With the team certain to be sold, there was less to gain by trying to establish control of the franchise. Interestingly, Toronto newspapers initially trumpeted this as a big win for Moyes and Balsillie but later pulled down those stories. The judge has made it clear that relocation, not control, is the primary issue. If anything, Balsillie lost a chance to be a part of the conversation because a mediator was not used and he was not invited to the control conversation.
Earlier today, the Arizona Republic broke major news that Sports Properties, a New York base investment firm was deep in negotiations with Glendale and the NHL to purchase the franchise when Moyes slipped the team into bankruptcy. Sports Properties has a blue chip leadership team that includes former Disney Sports CEO Tony Tavares, former New York Governor Mario Cuomo and baseball legend Hank Aaron. Sports Properties has been on the prowl to buy a major sport franchise after raising $215MM in a public offering last fall. Sports Properties will not be bidding Blackberry dollars for the franchise but assuming they are still interested, they offer the hope of stable, well financed ownership as well as manager (Tavares) with a strong arena management background.
June 9th will be a huge day for the future of hockey in Phoenix. The hearing, and the determination that follows will either help maintain a hockey presence in The Valley (hopefully for many years to come) or set off a legal war that will ultimately wind its' way to the United States Supreme Court. I'd love to bet on the good guys here but as I've often been told, there is no sure thing in the courts.
For Balsillie to get control of the team and leave Phoenix behind, he'll need a favorable ruling from Judge Baum. If the judge rules that movement of the franchise cannot be considered as part of his bid to buy the team out of bankruptcy, it's game over for Balsillie. Thanks for playing Jim, drive home safely.
On the other hand, if he rules in favor of the Canadian, it will set off a series of court tests that could last for years and years. The NHL and the City of Glendale will appeal any ruling that does not give them what they want out of this deal. The NHL wants to preserve their constitution and bylaws that give the owners territorial protection and the right to pick their partners. The City of Glendale wants to keep their major tenant. Both the appeals and the injunctions that are certain to follow in rapid sequence would almost certainly keep the team in Arizona for at least the short term and would likely take years to resolve.
It's hard to get a line on Judge Baum. On one hand, he noted that Balsillie's offer is the only offer he's seen or heard of to this point. Conversely, he made it clear to Moyes' legal team that they will need some pretty strong arguments to overcome some of the bankruptcy issues that may not give Moyes a clear title to do what he pleases with the franchise. He would also be getting into an area -- franchise law -- where bankruptcy courts have long respected the contractual rights of the franchisor. That's why he makes semi-large judge bucks, I guess.
One of the issues settled today was the control of the team. Essentially the NHL and the Moyes group agreed to joint management of the asset and agreed to let the bankruptcy play out. With the team certain to be sold, there was less to gain by trying to establish control of the franchise. Interestingly, Toronto newspapers initially trumpeted this as a big win for Moyes and Balsillie but later pulled down those stories. The judge has made it clear that relocation, not control, is the primary issue. If anything, Balsillie lost a chance to be a part of the conversation because a mediator was not used and he was not invited to the control conversation.
Earlier today, the Arizona Republic broke major news that Sports Properties, a New York base investment firm was deep in negotiations with Glendale and the NHL to purchase the franchise when Moyes slipped the team into bankruptcy. Sports Properties has a blue chip leadership team that includes former Disney Sports CEO Tony Tavares, former New York Governor Mario Cuomo and baseball legend Hank Aaron. Sports Properties has been on the prowl to buy a major sport franchise after raising $215MM in a public offering last fall. Sports Properties will not be bidding Blackberry dollars for the franchise but assuming they are still interested, they offer the hope of stable, well financed ownership as well as manager (Tavares) with a strong arena management background.
June 9th will be a huge day for the future of hockey in Phoenix. The hearing, and the determination that follows will either help maintain a hockey presence in The Valley (hopefully for many years to come) or set off a legal war that will ultimately wind its' way to the United States Supreme Court. I'd love to bet on the good guys here but as I've often been told, there is no sure thing in the courts.
Breaking News From Arizona Republic
The Arizona Republic is breaking an important piece of news concerning the sale of the Phoenix Coyotes this morning.
The Republic is reporting that Sports Properties Investment Corp., a New York investment firm put together for the express purpose of purchasing major league sports team(s) was working with Jerry Reinsdorf to buy the Coyotes prior to the team filing for bankruptcy protection.
Sports Properties has raised $215 million in capital markets to buy sports and leisure properties. Sports Properties had been rumored to be kicking the tires on the Coyotes prior to the Balsillie bid but had reportedly passed on the opportunity. The publicly traded firm was subsequently reported trying to acquire the NHL's Florida Panthers.
The Republic also reports that Tony Tavares, a former arena management and baseball executive who runs Sports Properties Acquisition Corp., signed an agreement May 4 with the city of Glendale, where the Coyotes play their home games at Jobing.com Arena.
The is great news for Coyotes fans. Tavares is a seasoned executive who served as the President and CEO of Disney Sports Enterprises, successfully launching and operating the Mighty Ducks of Anaheim. He also served as the CEO and President of SMG, a company manages stadiums, arenas, theaters and convention facilities worldwide. He has served as president of several Major League Baseball franchises, most recently the Montreal Expos and Washington Nationals.
And Sports Properties has money. Real money. They are sitting on a war chest of over $200MM raised through their public offering. They bring much needed cash, expertise and experience to the table. They also have arena management experience that can help stop the bleeding on that side of the ledger.
Here's the complete AZ Republic story...
http://www.azcentral.com/sports/coyotes/articles/2009/05/26/20090526spt-coyotes.html
The NHL and the Moyes legal team return to court today to tell the judge how they have agreed to run the team until the sale of the franchise is consummated. The judge had instructed both parties into mediation to resolve the issue of who controls the team. The Toronto Star is reporting that the NHL and the Moyes team have agree to run the team together until a sale is completed. The Star is reporting that Don Maloney will continue to run the hockey business, the NHL will foot the bills and any disagreements will be brought to the court for resolution.
Here is the complete story from the Toronto Star
http://www.thestar.com/sports/article/641093
The Republic is reporting that Sports Properties Investment Corp., a New York investment firm put together for the express purpose of purchasing major league sports team(s) was working with Jerry Reinsdorf to buy the Coyotes prior to the team filing for bankruptcy protection.
Sports Properties has raised $215 million in capital markets to buy sports and leisure properties. Sports Properties had been rumored to be kicking the tires on the Coyotes prior to the Balsillie bid but had reportedly passed on the opportunity. The publicly traded firm was subsequently reported trying to acquire the NHL's Florida Panthers.
The Republic also reports that Tony Tavares, a former arena management and baseball executive who runs Sports Properties Acquisition Corp., signed an agreement May 4 with the city of Glendale, where the Coyotes play their home games at Jobing.com Arena.
The is great news for Coyotes fans. Tavares is a seasoned executive who served as the President and CEO of Disney Sports Enterprises, successfully launching and operating the Mighty Ducks of Anaheim. He also served as the CEO and President of SMG, a company manages stadiums, arenas, theaters and convention facilities worldwide. He has served as president of several Major League Baseball franchises, most recently the Montreal Expos and Washington Nationals.
And Sports Properties has money. Real money. They are sitting on a war chest of over $200MM raised through their public offering. They bring much needed cash, expertise and experience to the table. They also have arena management experience that can help stop the bleeding on that side of the ledger.
Here's the complete AZ Republic story...
http://www.azcentral.com/sports/coyotes/articles/2009/05/26/20090526spt-coyotes.html
The NHL and the Moyes legal team return to court today to tell the judge how they have agreed to run the team until the sale of the franchise is consummated. The judge had instructed both parties into mediation to resolve the issue of who controls the team. The Toronto Star is reporting that the NHL and the Moyes team have agree to run the team together until a sale is completed. The Star is reporting that Don Maloney will continue to run the hockey business, the NHL will foot the bills and any disagreements will be brought to the court for resolution.
Here is the complete story from the Toronto Star
http://www.thestar.com/sports/article/641093
Monday, May 25, 2009
Next Coyotes Coach?
So if Wayne Gretzky is not part of the organization moving forward, who will coach the Coyotes?
This post isn't intended as a referendum on that issue. Any Gretzky decision will be made by the incoming owners of the team. Much has been speculated that he is in with some potential owners and out with others.
I'll be content to let others decide that. If he leaves the organization or accepts a reduced role, a new coach will need to be located. It's likely that Don Maloney will be making that decision and if he is called to do so, here are some of the options that he will be looking at.
The requisites for the job will be good with young players, proven winner and (likely) NHL experience. This is a team that needs to move from playoff contender to playoff participant. The margin for error here is very small. A relationship and history with Don Maloney probably wouldn't hurt either.
All signs point to one logical candidate -- Tom Renney. Renney coached the New York Rangers from 2004 until this spring and made the playoffs in each of his three full seasons with the Rangers. He's cerebral, very patient and worked closely with Maloney when both were with the Rangers.
Maloney is a prepared and measured manager. No doubt he has already thought about this possibility and built a short list of candidates that he feels can move the team forward. Much like general managers scout players, they are always looking at coaching talent along the way. Many of these names are likely on his list. So are others known only to him.
Coaching changes happen more often in hockey than any other major sport. This year. three of the four teams in the conference finals changed coaches during this season. The average life of an NHL bench boss is less than three years. Should Don Maloney have to change coaches this off-season it will no doubt be the most critical change he will make in the organization this summer and will have a profound impact on the future of the franchise. He is no doubt prepared and may get a chance to make the most important hire of his career.
Update Monday 12:05PM -- TSN is reporting that Pat Quinn has been named the new head coach of the Edmonton Oilers and Tom Renney will join him in Edmonton as associate head coach . While Renney could still be a candidate to be head coach in Phoenix, it is much less likely under this scenario.
This post isn't intended as a referendum on that issue. Any Gretzky decision will be made by the incoming owners of the team. Much has been speculated that he is in with some potential owners and out with others.
I'll be content to let others decide that. If he leaves the organization or accepts a reduced role, a new coach will need to be located. It's likely that Don Maloney will be making that decision and if he is called to do so, here are some of the options that he will be looking at.
The requisites for the job will be good with young players, proven winner and (likely) NHL experience. This is a team that needs to move from playoff contender to playoff participant. The margin for error here is very small. A relationship and history with Don Maloney probably wouldn't hurt either.
All signs point to one logical candidate -- Tom Renney. Renney coached the New York Rangers from 2004 until this spring and made the playoffs in each of his three full seasons with the Rangers. He's cerebral, very patient and worked closely with Maloney when both were with the Rangers.
Of course, Renney is also a prime candidate for other coaching vacancies. The Edmonton Oilers have reportedly asked for permission to interview him for their open position. By the time the Coyotes situation is clarified, his availability could be moot.
There are other potential NHL coaches who could be recycled in Phoenix. Peter Laviolette won a Stanley Cup three years ago in Carolina. He's an intense coach who may not be the best match for a young team. Bob Hartley also won a Stanley Cup with the Colorado Avalanche but struggled when he was hired to right the Atlanta Thrashers. Marc Crawford is another former Cup winner in Colorado but he couldn't get a young Los Angeles Kings team moving before he was dismissed after last season. Craig MacTavish spent eight years in Edmonton and had a great playoff run in 2006 but he could only get in the playoffs three times in eight years. The Coyotes need better than that.
One intriguing former NHL coach could be Pat Quinn. Quinn never has had a great reputation with young players but this year he addressed that issue head on by winning the World Junior Championship with Canada's best young talent. He's 66 but he also has a long history of building competitive teams. In 19 seasons as an NHL coach he has only missed the playoffs twice and some of those teams had no business making the playoffs. He's also colorful and could help raise the profile of the Coyotes.
With the success of Dan Bylsma in Pittsburgh and Bruce Boudreau in Washington, hiring coaches from the American Hockey League may prove to be a new vogue in the NHL. If Maloney chose to go with a proven minor league coach, two current and two former AHL coaches could emerge.
Manitoba Moose head coach Scott Arniel was the coach of the year in the A and has been mentioned as a possible candidate for the open Edmonton position. Kevin Dineen has coached the top prospects for both the Buffalo Sabres and Anaheim Ducks in Portland, ME and his name pops up whenever there is an NHL opening.
Two Former AHL coaches; Randy Cunneyworth and Don Lever also could merit consideration. Cunneyworth spent several years coaching the Rochester Americans before joining the Atlanta Thrashers as an assistant this year. He's been considered a prime NHL coaching prospect while developing many of the Sabres young players. Lever spent 10 years as Lindy Ruff's assistant in Buffalo and won a Calder Cup in Hamilton (delicious irony there!) with the Montreal Canadiens prospects. He just completed the season as an assistant to Guy Carbonneau and Bob Gainey for the Habs and is considered a head coaching candidate in Montreal. His age, 57, may work against him as a first time NHL coach.Maloney is a prepared and measured manager. No doubt he has already thought about this possibility and built a short list of candidates that he feels can move the team forward. Much like general managers scout players, they are always looking at coaching talent along the way. Many of these names are likely on his list. So are others known only to him.
Coaching changes happen more often in hockey than any other major sport. This year. three of the four teams in the conference finals changed coaches during this season. The average life of an NHL bench boss is less than three years. Should Don Maloney have to change coaches this off-season it will no doubt be the most critical change he will make in the organization this summer and will have a profound impact on the future of the franchise. He is no doubt prepared and may get a chance to make the most important hire of his career.
Update Monday 12:05PM -- TSN is reporting that Pat Quinn has been named the new head coach of the Edmonton Oilers and Tom Renney will join him in Edmonton as associate head coach . While Renney could still be a candidate to be head coach in Phoenix, it is much less likely under this scenario.
Don Maloney: "Business As Usual"
With all attention being focused on the Coyotes bankruptcy/sale/move/new ownership, the hockey side of the business has been operating in relative obscurity during the past month. I thought it would be fun and also a little cathartic to shine the spotlight back on the ice. I recently had a chance to visit with Don Maloney about some of the challenges he is facing in building the hockey team for the 2009-10 season.
Most importantly, Don made it clear directly and in his responses that the hockey side is conducting "business as usual" in approaching the upcoming draft, free agency and considering improvements to the team.
The Coyotes have the 6th and 36th picks in this years draft, but are unlikely get the additional 1st round draft choice that is coming from Calgary as part of the Olli Jokinen trade. "It looks like Calgary will take their pick in 2009 so we will have their 2010 pick" Maloney did however indicate that "I will consider trading this pick (Calgary's 1st in 2010) if a deal makes sense."
One possibility to watch for is Maloney combining his own 2009 2nd with the Calgary 1st to move into the lower half of the 2009 first round. The 2009 draft is considered to be a very deep and this becomes more likely if the Coyotes like a player who is sliding in the 1st round.
In assessing the Coyotes roster, Maloney cited the need for more scoring as his top off season concern. "We need to find more offensive production from our forward group which may result in adding a little more experience. This is not to suggest we are abandoning our young players, rather, I felt we were a little too young as a forward group last season to have success." Depending on the dollars Maloney has available, he will have a wide variety of players, both free agents and under contract to other teams that will be available to him.
Maloney also indicated that he is looking for help on the back end. "We could use a good defenseman, preferable someone who can play the right side". Numerous veterans, including former Coyote Derek Morris, will be available either by trade or free agency to fortify the defense. Young defensive prospect Nick Ross, who signed with the Coyotes last year, will turn pro after being the Yotes 1st round draft choice (30th overall) in 2007 and could contend for a position. Jonas Ahnelov could also figure in the mix. Ahenlov had a strong training camp last year before breaking his hand right at the end of camp.
A potential trading partner for the Coyotes could be the New York Rangers, who have six right handed defensemen on their roster.
Most importantly, Don made it clear directly and in his responses that the hockey side is conducting "business as usual" in approaching the upcoming draft, free agency and considering improvements to the team.
The Coyotes have the 6th and 36th picks in this years draft, but are unlikely get the additional 1st round draft choice that is coming from Calgary as part of the Olli Jokinen trade. "It looks like Calgary will take their pick in 2009 so we will have their 2010 pick" Maloney did however indicate that "I will consider trading this pick (Calgary's 1st in 2010) if a deal makes sense."
One possibility to watch for is Maloney combining his own 2009 2nd with the Calgary 1st to move into the lower half of the 2009 first round. The 2009 draft is considered to be a very deep and this becomes more likely if the Coyotes like a player who is sliding in the 1st round.
In assessing the Coyotes roster, Maloney cited the need for more scoring as his top off season concern. "We need to find more offensive production from our forward group which may result in adding a little more experience. This is not to suggest we are abandoning our young players, rather, I felt we were a little too young as a forward group last season to have success." Depending on the dollars Maloney has available, he will have a wide variety of players, both free agents and under contract to other teams that will be available to him.
Maloney also indicated that he is looking for help on the back end. "We could use a good defenseman, preferable someone who can play the right side". Numerous veterans, including former Coyote Derek Morris, will be available either by trade or free agency to fortify the defense. Young defensive prospect Nick Ross, who signed with the Coyotes last year, will turn pro after being the Yotes 1st round draft choice (30th overall) in 2007 and could contend for a position. Jonas Ahnelov could also figure in the mix. Ahenlov had a strong training camp last year before breaking his hand right at the end of camp.
A potential trading partner for the Coyotes could be the New York Rangers, who have six right handed defensemen on their roster.
One place defensive help will not be coming are the team's two outstanding defensive prospects, Chris Summer and Maxim Goncharov. "Chris Summers is returning to Michigan for his senior year." according to Maloney and "Maxim Goncharov has one year remaining on his Russian contract." Because of the lack of a transfer agreement with the Russian Hockey Federation, the Coyotes will retain Goncharov's rights. Goncharov in particular bears watching in the future. After a breakout performance in the World Junior Tournament this year, he was ranked as the 21st best prospect outside of the NHL by The Hockey News.
The Coyotes also have to deal with eight restricted free agents from last years team: Enver Lisin, Dan Winnik, Petr Prucha, Nigel Dawes, Joakim Lindstrom, Keith Yandle, Scottie Upshall and Josn Tordjman. Maloney is "not in any hurry" to sign his RFAs. Players in this category have to receive a qualifying offer by June 25th and Upshall and Yandle are the most likely to be qualified. Prucha may not be qualified at his $1.6MM 2009 salary but could resign with the Coyotes for a lower amount.
Tordjman has a breakout season for the AHL San Antonio Rampage this year and may be in the teams plans. Without mentioning him by name Maloney stated that"we will look hard at our backup goaltending position", which could mean bringing in a veteran to battle with Tordjman and Al Montoya for the backup job behind Ilya Bryzgalov.
The Coyotes have 16 players who finished this season with the big club under contract and the 6 players still on entry level contracts. That gives Maloney a lot of salary flexibility for summer retooling. Assuming that the team will stay close to the NHL salary floor, Maloney still has the flexibility to add a couple of veteran chips to strengthen the team.
In a future post, I'll take a look at the salary cap and floor implications of the current roster.
Friday, May 22, 2009
So Why Would Jerry Reinsdorf Want The Coyotes?
Just flip on your TV tonight and watch the Blackhawks-Red Wings game. As everyone knows, Reinsdorf owns the building's other tenant, the NBA Chicago Bulls. He's been able to watch the renaissance of the Blackhawks up close and personal. Until the 1990s, there was no question that Chicago was a hockey town. Even with good but not great teams, Hawk fans filled the building and created a raucous atmosphere that was unlike any other arena.
As the Bulls saw their profile rise in the Michael Jordan era, the Blackhawks pretty much became a forgotten team in Chicago. Missing the playoffs 9 of the last 10 years (sound familiar Phoenix?) had a lot to do with it. So did a lack of promotion that included not televising home games. And be sure to remember a management team that was badly out of touch with its' customers.
I went to a Blackhawks-Capitals game in Chicago with my son a few years ago and I was appalled at what I saw. The attendance was announced at 12,000 and there weren't 5,000 people in the arena. I bought tickets in the front row of the upper deck and was thrilled to have scored such good seats. I quickly learned that could have bought the same seats outside the arena for about half of what I paid . When we got to the game, I realized that hardly anyone was sitting behind me. Coming from places like New York and Philadelphia, I was stunned to see how far Chicago had fallen.
So what has Jerry seen happen over the past two years? Well, he's watched the Blackhawks turn things around on the ice and that makes everything else possible. The organization has promoted the team in all kinds of ways. And the fans have responded.
The Blackhawks were 29th in attendance two years ago, ranking behind your Phoenix Coyotes among others. Now they have sold out every regular season and playoff game this year with a total attendance of over 1 million. They had dasher boards filled with house ads and now corporate sponsors are lining up to align with the team. The fans, who were treated like the southbound end of a northbound horse, now embrace the team.
And Jerry watches all of this.
How many time in the last few years have the Coyotes and the Blackhawks been mentioned in the same breath as young teams on the cusp of a breakthrough? Think Jerry has heard that?
No two American cities are sister cities like Chicago and Phoenix. No two cities have struggled with their hockey team more that Chicago and Phoenix. And no one inside of hockey would be surprised if the Coyotes' young talent develops and emerges in the near future like the Hawks have..
Now I don't know what kind of hockey fan Jerry Reinsdorf is but I do know that he is a pretty smart businessman. Savvy business people like to buy low and sell high. And I'm betting that our Jerry wants to see if lightning can be caught in a bottle again. I'm sure that he has consulted with knowledgeable hockey people and understands the potential of this team. And I'm sure he knows full well that the championship window is closing on the Suns.
Jerry Reinsdorf wants in on this team because he sees the opportunity to make money. He may struggle to make an operating profit for a year or two but if the franchise starts to win hockey games and makes the playoffs, he can make money operating the team. And he'll make a killing when it comes time to sell the team.
It's not nearly as far fetched as some people would have you believe. And its' mostly because he's been able to watch the same story play out right before his eyes.
As the Bulls saw their profile rise in the Michael Jordan era, the Blackhawks pretty much became a forgotten team in Chicago. Missing the playoffs 9 of the last 10 years (sound familiar Phoenix?) had a lot to do with it. So did a lack of promotion that included not televising home games. And be sure to remember a management team that was badly out of touch with its' customers.
I went to a Blackhawks-Capitals game in Chicago with my son a few years ago and I was appalled at what I saw. The attendance was announced at 12,000 and there weren't 5,000 people in the arena. I bought tickets in the front row of the upper deck and was thrilled to have scored such good seats. I quickly learned that could have bought the same seats outside the arena for about half of what I paid . When we got to the game, I realized that hardly anyone was sitting behind me. Coming from places like New York and Philadelphia, I was stunned to see how far Chicago had fallen.
So what has Jerry seen happen over the past two years? Well, he's watched the Blackhawks turn things around on the ice and that makes everything else possible. The organization has promoted the team in all kinds of ways. And the fans have responded.
The Blackhawks were 29th in attendance two years ago, ranking behind your Phoenix Coyotes among others. Now they have sold out every regular season and playoff game this year with a total attendance of over 1 million. They had dasher boards filled with house ads and now corporate sponsors are lining up to align with the team. The fans, who were treated like the southbound end of a northbound horse, now embrace the team.
And Jerry watches all of this.
How many time in the last few years have the Coyotes and the Blackhawks been mentioned in the same breath as young teams on the cusp of a breakthrough? Think Jerry has heard that?
No two American cities are sister cities like Chicago and Phoenix. No two cities have struggled with their hockey team more that Chicago and Phoenix. And no one inside of hockey would be surprised if the Coyotes' young talent develops and emerges in the near future like the Hawks have..
Now I don't know what kind of hockey fan Jerry Reinsdorf is but I do know that he is a pretty smart businessman. Savvy business people like to buy low and sell high. And I'm betting that our Jerry wants to see if lightning can be caught in a bottle again. I'm sure that he has consulted with knowledgeable hockey people and understands the potential of this team. And I'm sure he knows full well that the championship window is closing on the Suns.
Jerry Reinsdorf wants in on this team because he sees the opportunity to make money. He may struggle to make an operating profit for a year or two but if the franchise starts to win hockey games and makes the playoffs, he can make money operating the team. And he'll make a killing when it comes time to sell the team.
It's not nearly as far fetched as some people would have you believe. And its' mostly because he's been able to watch the same story play out right before his eyes.
Tuesday, May 19, 2009
Reviewing The Day In Court
Having never paid much attention to a bankruptcy court, I wasn't sure what to expect today. What I learned, more than anything else is that the court will be moving at it's own speed, making some decisions, clearly looking to punt others and generally disappointing everyone who was looking for a quick solution to a nasty situation.
The judge clearly doesn't know or seemingly care that we've got tickets to sell, players to draft and sign and a schedule to draw and promote? Guess he's just another one of those 4 million or so Phoenicians who has never been to a Coyotes game.
It was a busy, interesting and even confusing day. Let's take a look at the highlights...
1. Who's in control? Well, much like the old who's on first comedy routine, it was interesting, even a little funny but at the end of the day, you still really don't know what is going on. The NHL and the Moyes camp both claim control of the franchise; the NHL by virtue of the proxy that came with $32MM in secured loans and Moyes with his investment and ownership stake that's cost him somewhere in the neighborhood of $300MM. If Moyes loses here it's pretty much game over for him and his sizable investment. Paraphrasing the judge, why fight so much over who's driving the car when it's going to be sold in 60 days. He sentenced both sides to arbitration to work things out and get back to him next Wednesday.
The NHL and Moyes both have good reason to want those car keys because their respective position would largely determine whether the process goes on to next steps or goes away. Mediation meetings this week will be a treat. Lots of lawyers doing lots of railing, billing lots of hours and little chance of a compromise. There are some people in Phoenix who would rather buy a ticket to listen to those meetings rather than a hockey games. The participants have vastly different agendas -- Team Moyes wants to maximize the return they receive and the NHL wants the team to be sold to owners who will keep the team in Phoenix. At this point, those goals do not seem to be compatible.
Look for Judge Baum to break the tie next week and seeing the way the Judge keeps talking about the eventual sale of the team, I'm thinking he is leaning towards letting the bankruptcy play out which means advantage to the Moyes camp.
2. Moving Vans Anyone? The relocation issue has to be solved before the franchise can be sold and June 22nd was set as the date to make that determination. The NHL wanted that issue called today. The judge did speak to the compelling amount of support the NHL has from other major sports leagues as well as citing the Oakland Raiders case which he felt set a precedent that the league does have control over where their teams play. Remember that all leagues changed their by-laws in the face of the Raiders first move to LA and the subsequent changes have been upheld several times in court. If Judge Baum ruled that a bankrupt team could move anywhere regardless of league bylaws and competing teams, you can be sure the NHL will drag this to a higher court and fight the ruling to preserve its authority over where teams play.
One possibility between now and June 22nd is if Moyes is awarded control of the franchise, he may approach the NHL and formally ask to move the team. That request would likely be rejected. At that point, you have to question whether the Balsillie offer still would have legs since it is conditioned on the franchise being relocated.
3. And the high bidder is? Depends. If the court decides that laws and by-laws be dammed and the franchise can be relocated, Balsille's $212MM is in the lead. Keep in mind however that other Canadian groups might come out of the woodwork if the team is sprung loose. If there's no relocation and no conditional bid, then the issue of who gets the team probably comes down to who among the local candidates has the best offer. The Reinsdorf-Kaites group clearly has a dog in the hunt. They may have company though...a group that is rumored to be being formed by Coyotes minority owner John Breslow.
4. And Glendale? That iron clad lease hasn't been heard from yet. They didn't seem to get a word in today. Depending on how things work out over the next few weeks, they may open a legal flank that asserts the sovereignty of the arena lease. When the moment is right, they will be heard from.
5. And finally...Wayne's World Closing? It was reported today by the Toronto Sun that if the Reinsdorf-Kaites group gets the team, they want to retire Wayne as the Coyotes coach, managing partner and chief payroll drain. That won't bother most Valley hockey fans who love Gretzky but hate the way he coaches. Gretzky's value as a gate attraction never panned out here and his departure wouldn't be much of a loss. In fact, the chance to bring in an established coach (former New York Ranger coach Tom Renney will become a leading candidate) could revitalize the franchise.
The judge clearly doesn't know or seemingly care that we've got tickets to sell, players to draft and sign and a schedule to draw and promote? Guess he's just another one of those 4 million or so Phoenicians who has never been to a Coyotes game.
It was a busy, interesting and even confusing day. Let's take a look at the highlights...
1. Who's in control? Well, much like the old who's on first comedy routine, it was interesting, even a little funny but at the end of the day, you still really don't know what is going on. The NHL and the Moyes camp both claim control of the franchise; the NHL by virtue of the proxy that came with $32MM in secured loans and Moyes with his investment and ownership stake that's cost him somewhere in the neighborhood of $300MM. If Moyes loses here it's pretty much game over for him and his sizable investment. Paraphrasing the judge, why fight so much over who's driving the car when it's going to be sold in 60 days. He sentenced both sides to arbitration to work things out and get back to him next Wednesday.
The NHL and Moyes both have good reason to want those car keys because their respective position would largely determine whether the process goes on to next steps or goes away. Mediation meetings this week will be a treat. Lots of lawyers doing lots of railing, billing lots of hours and little chance of a compromise. There are some people in Phoenix who would rather buy a ticket to listen to those meetings rather than a hockey games. The participants have vastly different agendas -- Team Moyes wants to maximize the return they receive and the NHL wants the team to be sold to owners who will keep the team in Phoenix. At this point, those goals do not seem to be compatible.
Look for Judge Baum to break the tie next week and seeing the way the Judge keeps talking about the eventual sale of the team, I'm thinking he is leaning towards letting the bankruptcy play out which means advantage to the Moyes camp.
2. Moving Vans Anyone? The relocation issue has to be solved before the franchise can be sold and June 22nd was set as the date to make that determination. The NHL wanted that issue called today. The judge did speak to the compelling amount of support the NHL has from other major sports leagues as well as citing the Oakland Raiders case which he felt set a precedent that the league does have control over where their teams play. Remember that all leagues changed their by-laws in the face of the Raiders first move to LA and the subsequent changes have been upheld several times in court. If Judge Baum ruled that a bankrupt team could move anywhere regardless of league bylaws and competing teams, you can be sure the NHL will drag this to a higher court and fight the ruling to preserve its authority over where teams play.
One possibility between now and June 22nd is if Moyes is awarded control of the franchise, he may approach the NHL and formally ask to move the team. That request would likely be rejected. At that point, you have to question whether the Balsillie offer still would have legs since it is conditioned on the franchise being relocated.
3. And the high bidder is? Depends. If the court decides that laws and by-laws be dammed and the franchise can be relocated, Balsille's $212MM is in the lead. Keep in mind however that other Canadian groups might come out of the woodwork if the team is sprung loose. If there's no relocation and no conditional bid, then the issue of who gets the team probably comes down to who among the local candidates has the best offer. The Reinsdorf-Kaites group clearly has a dog in the hunt. They may have company though...a group that is rumored to be being formed by Coyotes minority owner John Breslow.
4. And Glendale? That iron clad lease hasn't been heard from yet. They didn't seem to get a word in today. Depending on how things work out over the next few weeks, they may open a legal flank that asserts the sovereignty of the arena lease. When the moment is right, they will be heard from.
5. And finally...Wayne's World Closing? It was reported today by the Toronto Sun that if the Reinsdorf-Kaites group gets the team, they want to retire Wayne as the Coyotes coach, managing partner and chief payroll drain. That won't bother most Valley hockey fans who love Gretzky but hate the way he coaches. Gretzky's value as a gate attraction never panned out here and his departure wouldn't be much of a loss. In fact, the chance to bring in an established coach (former New York Ranger coach Tom Renney will become a leading candidate) could revitalize the franchise.
Monday, May 18, 2009
The "Center" of Phoenix
Had a conversation recently with an official from another professional team in Phoenix and he told me something very interesting. For years, the "center" of the Valley was defined by Central Avenue. Similar population on either side of that line. Not anymore. with all of the growth in the western suburbs, the dividing line is moving west and in 10-15 years, the new "center" of Phoenix will be 63rd. Avenue. Wow! That's 4 miles from the Glendale Sports Complex and it certainly gives rise to a long term view that the Glendale location will only improve as the Valley's population continues to grow.
Sunday, May 17, 2009
Does Bankruptcy Void The Lease?
Had an interesting conversation with a bankruptcy attorney today.
Asked about the Coyotes lease with Glendale and learned that if (big if) the Coyotes (read Moyes ownership) are allowed to enter bankruptcy the lease can definitely be broken.
There is one (big) exception.
If the mere act of placing the team into bankruptcy violated the lease, the judge would not necessarily void the lease. In fact, if the lease was written with that possibility in mind, the odds are excellent that the lease and the subsequent large penalty to break the lease would be intact.
My contact suggested that Moyes might have been a lot better off if he and other non secured creditors had placed the team into bankruptcy. Of course, under those circumstances, none of the non secured creditors could expect much of a payment.
This will be a busy week with lots of court decisions, the potential for a quick knockout punch by the NHL and perhaps the first real signs of new ownership emerging.
And isn't it amazing that this is the most attention hockey has ever received in May in Phoenix.
Asked about the Coyotes lease with Glendale and learned that if (big if) the Coyotes (read Moyes ownership) are allowed to enter bankruptcy the lease can definitely be broken.
There is one (big) exception.
If the mere act of placing the team into bankruptcy violated the lease, the judge would not necessarily void the lease. In fact, if the lease was written with that possibility in mind, the odds are excellent that the lease and the subsequent large penalty to break the lease would be intact.
My contact suggested that Moyes might have been a lot better off if he and other non secured creditors had placed the team into bankruptcy. Of course, under those circumstances, none of the non secured creditors could expect much of a payment.
This will be a busy week with lots of court decisions, the potential for a quick knockout punch by the NHL and perhaps the first real signs of new ownership emerging.
And isn't it amazing that this is the most attention hockey has ever received in May in Phoenix.
Thursday, May 14, 2009
Franchise Territory Protection...It Happens Every Day
I've spent most of my career in franchise management. I've worked for several large companies that franchise individual stores under a franchise banner throughout the United States and other countries. One part of franchise law that is constantly under discussion is the rights of individual franchisees to control their own territory.
The government views franchises of the same chain as competitors. That means that the McDonald's on Estrella Pwy. is a considered a competitor of the McDonald's on Indian School Road.
Each company that franchises has contractual agreements with their franchisees that clearly spell out the territorial protection that a franchisee may get. While individual stores in the same chain are competitors, the government has acknowledged that franchisors can offer geographic protection to individual units through a defined area in their contract. Restaurant chains are probably the best example of this practice. There are some chains that offer no geographic protections (they in effect only franchise the address) while others will put in their contracts that they will not authorize or build a competing business within 1 to 5 miles.
In simple terms, McDonald's, Pizza Hut and the many like companies protect their business partners by contract. That's really no different than what the National Hockey League does by protecting the territories of their existing teams. There's a set geographic protection of 50 miles in the NHL charter. That's why the New York Islanders and New Jersey Devils paid huge fees to get the New York Rangers to waive their territorial rights and allow those teams to enter their market. Likewise the Almighty Ducks when they entered the Los Angeles market.
Try to build a Burger King down the street from an existing franchisee and there will be hell to pay. Same with any other chain that franchises. The NHL is no different than many other companies that place a high priority on the protection of their franchisees. You see, franchisees send money to the home office. They pay the bills. They create jobs of the people who are hired to watch over them. Even though the league acts as a cooperative, it still must comply with stringent franchise laws. The downside is that if you don't take care of your franchisees, you will spend a lot of time in court.
This isn't whether Southern Ontario would or would not be a good hockey market. The novelty of a new team will sell a lot of tickets, From there, it comes down to winning and losing and the type of organization that manages the team. The New York Islanders were wildly popular when they won 4 Stanley Cups in the 1980s, but for the last 10 years they have been atrocious on the ice and have lost as much or more money than the Coyotes. The New Jersey Devils have won three Stanley Cups but can only guarantee a sellout when they play the Rangers. Both teams get the short shift in the New York media. Want more evidence, just take a look at the NBA Los Angeles Clippers.
The best part of a Southern Ontario team for the NHL is that someone, either Jim Balsillie or otherwise will pay dearly for the privilege. That's money that the league wants to benefit the league and its' other franchisees, not Jerry Moyes. Sooner or later the league will deal with this situation. Expansion was and still is the most likely method that a new team will be placed into the area.
You can't pick up a franchised business and drop it wherever you please. The NHL has volumes of law that supports position as well as plenty of court precident. That as much as anything will determnine where this endangered species will be playing next year.
The government views franchises of the same chain as competitors. That means that the McDonald's on Estrella Pwy. is a considered a competitor of the McDonald's on Indian School Road.
Each company that franchises has contractual agreements with their franchisees that clearly spell out the territorial protection that a franchisee may get. While individual stores in the same chain are competitors, the government has acknowledged that franchisors can offer geographic protection to individual units through a defined area in their contract. Restaurant chains are probably the best example of this practice. There are some chains that offer no geographic protections (they in effect only franchise the address) while others will put in their contracts that they will not authorize or build a competing business within 1 to 5 miles.
In simple terms, McDonald's, Pizza Hut and the many like companies protect their business partners by contract. That's really no different than what the National Hockey League does by protecting the territories of their existing teams. There's a set geographic protection of 50 miles in the NHL charter. That's why the New York Islanders and New Jersey Devils paid huge fees to get the New York Rangers to waive their territorial rights and allow those teams to enter their market. Likewise the Almighty Ducks when they entered the Los Angeles market.
Try to build a Burger King down the street from an existing franchisee and there will be hell to pay. Same with any other chain that franchises. The NHL is no different than many other companies that place a high priority on the protection of their franchisees. You see, franchisees send money to the home office. They pay the bills. They create jobs of the people who are hired to watch over them. Even though the league acts as a cooperative, it still must comply with stringent franchise laws. The downside is that if you don't take care of your franchisees, you will spend a lot of time in court.
This isn't whether Southern Ontario would or would not be a good hockey market. The novelty of a new team will sell a lot of tickets, From there, it comes down to winning and losing and the type of organization that manages the team. The New York Islanders were wildly popular when they won 4 Stanley Cups in the 1980s, but for the last 10 years they have been atrocious on the ice and have lost as much or more money than the Coyotes. The New Jersey Devils have won three Stanley Cups but can only guarantee a sellout when they play the Rangers. Both teams get the short shift in the New York media. Want more evidence, just take a look at the NBA Los Angeles Clippers.
The best part of a Southern Ontario team for the NHL is that someone, either Jim Balsillie or otherwise will pay dearly for the privilege. That's money that the league wants to benefit the league and its' other franchisees, not Jerry Moyes. Sooner or later the league will deal with this situation. Expansion was and still is the most likely method that a new team will be placed into the area.
You can't pick up a franchised business and drop it wherever you please. The NHL has volumes of law that supports position as well as plenty of court precident. That as much as anything will determnine where this endangered species will be playing next year.
Glendale Weights In
Information from Glendale's court filing makes it clear that the party with the most to close in this equation is not goign to go quietly.
There's plenty more legalese in the documents that the Moyes team must respond to tomorrow but Glendale's filing makes it clear that the City will take every legal avenue available to block the sale and the termination of the arena lease. And that means lots of long protracted litigation that could extend on for seevral years.
"The city believes that it has the right under applicable law to prohibit any relocation of the Phoenix Coyotes...The city believes and therefore asserts that its right to enforce the Non-Relocation Covenant under applicable law shall survive these Chapter 11 cases, including any sale of the (team)."
There's plenty more legalese in the documents that the Moyes team must respond to tomorrow but Glendale's filing makes it clear that the City will take every legal avenue available to block the sale and the termination of the arena lease. And that means lots of long protracted litigation that could extend on for seevral years.
Wednesday, May 13, 2009
He Said, She Said
Slow news day today.
The Toronto Star reported that the NHL wants to keep the Reinsdorf-Kaites offer out of the courts until the proxy issue is settled because the offer is far less than the Jim Balsillie offer..
No kidding. Sure, the offer is lower. But, they are not buying the same things. Reinsdorf-Kaites is buying what will be a significant and costly turnaround property in Arizona. Balsillie wants to buy the rights to a new team in established hockey territory. Of course, he wants to end run the rules that govern not only the NHL but the same principles that govern every professional sports league. That's why it is a conditional offer.
Advantage to the NHL. The judge has ruled that the Reinsdorf-Kaites offer won't be acted upon until the proxy argument is settled. True that a bankruptcy judge has to maximize the value of the asset. But the Balsillie offer is anything but a clean offer.
And our friend Damian Cox (also from the Toronto Star) has checked in with news that Wayne Gretzky has taken a stand. Well, sort of...
Now Gretzky didn't speak to reporters and he is not likely to. He has a tightrope to walk here. On one hand, he's the coach of the Phoenix Coyotes and appears to have little appetite to move back to Canada. Of course he's also a Canadian icon so speaking out against the move does him no good on the home front. Gretzky's inflated coaching contract would probably pay him almost as much over the next two years as if he cashes out with a Balsillie sale. And despite his detractors, there is little question that he likes coaching and wants to continue, In Phoenix.
Still all quiet on the Reinsdorf-Kaites front. Hope they do not get cold feet while this mess plays out.
The Toronto Star reported that the NHL wants to keep the Reinsdorf-Kaites offer out of the courts until the proxy issue is settled because the offer is far less than the Jim Balsillie offer..
The Star has learned Reinsdorf was prepared to offer an estimated $130 million (all figures U.S.) - far less than Balsillie's $212.5 million package.
"You have a judge in a bankruptcy court whose responsibility is to protect
the interests of creditors and in doing that he has to maximize any value he can
get," said Richard Powers, a professor of business at the Rotman School of
Business at the University of Toronto. "Look at the difference in price."
No kidding. Sure, the offer is lower. But, they are not buying the same things. Reinsdorf-Kaites is buying what will be a significant and costly turnaround property in Arizona. Balsillie wants to buy the rights to a new team in established hockey territory. Of course, he wants to end run the rules that govern not only the NHL but the same principles that govern every professional sports league. That's why it is a conditional offer.
Advantage to the NHL. The judge has ruled that the Reinsdorf-Kaites offer won't be acted upon until the proxy argument is settled. True that a bankruptcy judge has to maximize the value of the asset. But the Balsillie offer is anything but a clean offer.
And our friend Damian Cox (also from the Toronto Star) has checked in with news that Wayne Gretzky has taken a stand. Well, sort of...
Sources indicated yesterday that Wayne Gretzky is "supportive" of the plan presented by Chicago sports czar Jerry Reinsdorf to buy the Phoenix Coyotes
and keep them in Arizona. Gretzky would stay with the team as head coach under the ownership of a group of investors headed by Reinsdorf that would conditionally offer an estimated $130 million (U.S.) for the troubled Phoenix club
Now Gretzky didn't speak to reporters and he is not likely to. He has a tightrope to walk here. On one hand, he's the coach of the Phoenix Coyotes and appears to have little appetite to move back to Canada. Of course he's also a Canadian icon so speaking out against the move does him no good on the home front. Gretzky's inflated coaching contract would probably pay him almost as much over the next two years as if he cashes out with a Balsillie sale. And despite his detractors, there is little question that he likes coaching and wants to continue, In Phoenix.
Still all quiet on the Reinsdorf-Kaites front. Hope they do not get cold feet while this mess plays out.
Brought to You By...
Huh?
Google sells the ad space that surrounds this blog. While we are trying to be objective here, we do have an agenda. NHL Hockey belongs in Phioenix. Imagine my surprise when I saw ads for Jim Balsillie's web site (makeitseven.ca) popping up next to my post yesterday. Now I know how Obama felt when McCain campaign ads came up when his name was searched.
Welcome to the 21st century. I guess.
Google sells the ad space that surrounds this blog. While we are trying to be objective here, we do have an agenda. NHL Hockey belongs in Phioenix. Imagine my surprise when I saw ads for Jim Balsillie's web site (makeitseven.ca) popping up next to my post yesterday. Now I know how Obama felt when McCain campaign ads came up when his name was searched.
Welcome to the 21st century. I guess.
Tuesday, May 12, 2009
From The Phoenix Business Journal
The dogfight in the desert for the Phoenix Coyotes promises to be the most interesting contest in hockey this month.
http://phoenix.bizjournals.com/phoenix/stories/2009/05/11/daily17.html
An interesting spin on the workings of bankruptcy court. Makes it more obvious why the NHL is going for a quick knockout by having the proxy upheld.
http://phoenix.bizjournals.com/phoenix/stories/2009/05/11/daily17.html
An interesting spin on the workings of bankruptcy court. Makes it more obvious why the NHL is going for a quick knockout by having the proxy upheld.
The NHL Could Use Jim Balsillie. No Kidding!
And now a word about Jim Balsillie.
The NHL owners could sure use an enthusiastic owner. And the NHL could also use an owner with deep, deep pockets. There’s no doubt that Mr. Balsillie has many friends on both sides of the border. He knows and associates with the kind of people who could turn out to be the perspective buyers of other teams in the league. His business success brings a tremendous cache to the league and would generate an incredible amount of publicity.
That said, knocking down the door is not usually the way to become part of the family. Most suitors approach the father of the intended with care and caution. Those virtues don’t seem to exist in Mr. Basillie’s world.
I think the NHL would be wise to consider an alternative plan that preserves the Coyotes and also takes advantage of Mr. Balsillie’s assets to strengthen the league. And perhaps a plan that humbles him just a bit along the way.
Adding a second franchise in Southern Ontario is an issue that is not going to go away. 18 years ago, Hamilton and not Ottawa would have been the 24th team accepted into the NHL but the perspective owners (Tim Horton’s) wanted to spread the expansion fee over several years rather than delivering a check for the full amount.
Why not grant an expansion franchise to Southern Ontario? The league ultimately wants to get to 32 teams. If they go to 31 now, they can always go back to 30 if a franchise should ultimately fail. If all turns out well, 32 can be achieved easily in coming years. The NHL has never been shy about expanding and going past 30 teams might open the playoffs to include more teams.
The league could charge a hefty premium for the Southern Ontario territory and Mr. Balsillie would get a year or two to figure out his arena needs. The Maple Leafs and the Sabres would be indemnified for their territorial rights (thus reinforcing an important league tenet) as part of the deal and all teams in the league could split up a much needed expansion fee. The players union gets piece of mind that they forced an important isuse and 23 more major league jobs for their members. And yes, there is a more than ample talent pool to fill another NHL team.
Why expand when so many teams are struggling? Money would be a good place to start. It almost always is.
The NHL owners could sure use an enthusiastic owner. And the NHL could also use an owner with deep, deep pockets. There’s no doubt that Mr. Balsillie has many friends on both sides of the border. He knows and associates with the kind of people who could turn out to be the perspective buyers of other teams in the league. His business success brings a tremendous cache to the league and would generate an incredible amount of publicity.
That said, knocking down the door is not usually the way to become part of the family. Most suitors approach the father of the intended with care and caution. Those virtues don’t seem to exist in Mr. Basillie’s world.
I think the NHL would be wise to consider an alternative plan that preserves the Coyotes and also takes advantage of Mr. Balsillie’s assets to strengthen the league. And perhaps a plan that humbles him just a bit along the way.
Adding a second franchise in Southern Ontario is an issue that is not going to go away. 18 years ago, Hamilton and not Ottawa would have been the 24th team accepted into the NHL but the perspective owners (Tim Horton’s) wanted to spread the expansion fee over several years rather than delivering a check for the full amount.
Why not grant an expansion franchise to Southern Ontario? The league ultimately wants to get to 32 teams. If they go to 31 now, they can always go back to 30 if a franchise should ultimately fail. If all turns out well, 32 can be achieved easily in coming years. The NHL has never been shy about expanding and going past 30 teams might open the playoffs to include more teams.
The league could charge a hefty premium for the Southern Ontario territory and Mr. Balsillie would get a year or two to figure out his arena needs. The Maple Leafs and the Sabres would be indemnified for their territorial rights (thus reinforcing an important league tenet) as part of the deal and all teams in the league could split up a much needed expansion fee. The players union gets piece of mind that they forced an important isuse and 23 more major league jobs for their members. And yes, there is a more than ample talent pool to fill another NHL team.
Why expand when so many teams are struggling? Money would be a good place to start. It almost always is.
Monday, May 11, 2009
Gee, How Did That Happen?"
So what have we got here?
For starters, it’s a shame that this circus is deflecting attention from the most exciting NHL playoffs in years. The games have been amazing, the passion is incredible. I believe that each of the eight teams still alive really believe they can win the Stanley Cup this year and it’s making for a fabulous spring.
And in the middle of this great moment for hockey, the unthinkable has happened. The Phoenix Coyotes have dropped a turd in the punch bowl.
Well, let’s clarify that. It wasn’t the Coyotes as much as their past, possibly present and definitely not future owner Jerry Moyes.
Jerry celebrated Cinco de Mayo by tossing the Coyotes into bankruptcy court and compounded the issue by making a deal to sell the carcass to the NHL’s most arrogant suitor, Jim Balsillie.
Now on one hand, it’s easy to have some sympathy for Mr. Moyes. He’s got more money sunk into this team than most of us will ever see in our lifetimes.
But one comment from Jerry after last week’s hearing made me wonder whether his head was invested as much as his wallet. He told the world that he loaned (former owner) Steve Ellman $5MM “as a favor” to help him keep the Coyotes operating in 2001. Now, 8 years later he’s upside down for $300MM. Now I realize that $5MM to some people is like $500 is to you and me but we’re talking about big casino here. How did we get from $5 Million to $300 Million Dollars? Roll that one around in your mind for a few minutes.
Now under normal circumstances, this was a foreseeable conclusion to another disappointing season in the desert. The Coyotes missed the playoffs (again), attendance was soft (again) and interest from the local media was shall we say modest. However, little about the Coyotes falls under the category of normal circumstances. You see, in November, Mr. Moyes apparently forgot that he mortgaged the farm as well as the animals and the barn by signing a proxy agreement with the National Hockey League. He had to sign that agreement to get loans that kept the franchise afloat.
I’ll save you the pain of reading the entire proxy agreement. (It’s available on a number of web sites including the Toronto Star -- www.thestar.com/sports) Here is the smoking gun.
I wonder which part of the proxy Mr. Moyes does not understand. I’m not a lawyer but that reads pretty clearly to me. Just to check my sanity, I talked with a bankruptcy attorney whom I respect greatly (my son) and he agrees that the proxy reads clearly.
Now I don’t know if Jerry’s attention span isn’t that great or deep, what are the chances are that he didn’t read or completely understand the proxy that he signed for the National Hockey League? I’m going to guess that he isn’t fully vested in the document and that the NHL may land a knockout punch during the first bankruptcy court hearing next week. His lawyers are well aware of the document but, hey, lawyers will go to court and fight any fight that a client wants. My son told me that too.
If the judge assigned to the case reads the proxy the same way I do, it will be game over for Team Moyes-Balsillie and over fast. The Coyotes will likely be sold to a group that includes local attorney John Kaites and Chicago White Sox owner Jerry Reinsdorf.
The first joust in the courtroom comes on Wednesday when the NHL gets to make their case why they control the Coyotes.
On May 15th we hear from Team Moyes.
And on May 19th (if necessary) – Everybody gets their day in court. I am guessing that May 19th won’t be necessary. For that matter, May 15th may also become available for other activities.
The NHL proxy is a compelling legal document. If somehow, Team Moyes can sidestep that bullet, there are two more cannons pointed in his direction.
He’ll have to deal with the City of Glendale. He would be asking the court to screw a city for generations and generations to come by voiding the 24 years left on the team’s lease and not enforcing the escape clause payment. And he’ll have to fight that battle in an Arizona court. That’s give Glendale a pretty big home field advantage. Bankruptcy proceedings allow companies to escape leases but it’s not a foregone conclusion. When the Pittsburgh Penguins tried to go that route several years ago, a well written arena lease was enforced by bankruptcy court. That ended that end run.
And if he gets this far, then we’ll deal with the thorny issue of selling the club to a (perspective) rogue owner who wants to skirt NHL rules, territorial rights and customs and ship the team off to Southern Ontario. Remember the Balsillie offer is a conditional offer based on moving the team. Those conditions, along with the forced sale would mobilize the legal might of the National Hockey League to preserve their rights to dictate who gets to be in their club and where the teams can set up shop. That would be a legal battle for the ages and one that would likely drag on for several years.
The Moyes to Balsillie pass will likely get broken up in its’ early stages. The chances are good that the Coyotes will get another chance to make Phoenix into a hockey town. Maybe the seriousness of this situation and an improved team will get the public's attention and start pointing the team towards a more successful future.
And depending on how long and far along this issue is litigated, it could drag on years. The people who will get rich on this deal will be the lawyers. All of the many lawyers who have been called into action. And that my friends is why I sent my son to law school.
For starters, it’s a shame that this circus is deflecting attention from the most exciting NHL playoffs in years. The games have been amazing, the passion is incredible. I believe that each of the eight teams still alive really believe they can win the Stanley Cup this year and it’s making for a fabulous spring.
And in the middle of this great moment for hockey, the unthinkable has happened. The Phoenix Coyotes have dropped a turd in the punch bowl.
Well, let’s clarify that. It wasn’t the Coyotes as much as their past, possibly present and definitely not future owner Jerry Moyes.
Jerry celebrated Cinco de Mayo by tossing the Coyotes into bankruptcy court and compounded the issue by making a deal to sell the carcass to the NHL’s most arrogant suitor, Jim Balsillie.
Now on one hand, it’s easy to have some sympathy for Mr. Moyes. He’s got more money sunk into this team than most of us will ever see in our lifetimes.
But one comment from Jerry after last week’s hearing made me wonder whether his head was invested as much as his wallet. He told the world that he loaned (former owner) Steve Ellman $5MM “as a favor” to help him keep the Coyotes operating in 2001. Now, 8 years later he’s upside down for $300MM. Now I realize that $5MM to some people is like $500 is to you and me but we’re talking about big casino here. How did we get from $5 Million to $300 Million Dollars? Roll that one around in your mind for a few minutes.
Now under normal circumstances, this was a foreseeable conclusion to another disappointing season in the desert. The Coyotes missed the playoffs (again), attendance was soft (again) and interest from the local media was shall we say modest. However, little about the Coyotes falls under the category of normal circumstances. You see, in November, Mr. Moyes apparently forgot that he mortgaged the farm as well as the animals and the barn by signing a proxy agreement with the National Hockey League. He had to sign that agreement to get loans that kept the franchise afloat.
I’ll save you the pain of reading the entire proxy agreement. (It’s available on a number of web sites including the Toronto Star -- www.thestar.com/sports) Here is the smoking gun.
The undersigned (Moyes and affiliated companies) hereby irrevocably appoints…the commissioner of the NHL as its’ true and lawful attorney and proxy in respect of all of the undersigned’s interests and rights in the club…including, without limitation the following.
(b) The voluntary or involuntary bankruptcy, dissolution, liquidation,
termination or reorganization of the club and/or any of its subsidiaries.
I wonder which part of the proxy Mr. Moyes does not understand. I’m not a lawyer but that reads pretty clearly to me. Just to check my sanity, I talked with a bankruptcy attorney whom I respect greatly (my son) and he agrees that the proxy reads clearly.
Now I don’t know if Jerry’s attention span isn’t that great or deep, what are the chances are that he didn’t read or completely understand the proxy that he signed for the National Hockey League? I’m going to guess that he isn’t fully vested in the document and that the NHL may land a knockout punch during the first bankruptcy court hearing next week. His lawyers are well aware of the document but, hey, lawyers will go to court and fight any fight that a client wants. My son told me that too.
If the judge assigned to the case reads the proxy the same way I do, it will be game over for Team Moyes-Balsillie and over fast. The Coyotes will likely be sold to a group that includes local attorney John Kaites and Chicago White Sox owner Jerry Reinsdorf.
The first joust in the courtroom comes on Wednesday when the NHL gets to make their case why they control the Coyotes.
On May 15th we hear from Team Moyes.
And on May 19th (if necessary) – Everybody gets their day in court. I am guessing that May 19th won’t be necessary. For that matter, May 15th may also become available for other activities.
The NHL proxy is a compelling legal document. If somehow, Team Moyes can sidestep that bullet, there are two more cannons pointed in his direction.
He’ll have to deal with the City of Glendale. He would be asking the court to screw a city for generations and generations to come by voiding the 24 years left on the team’s lease and not enforcing the escape clause payment. And he’ll have to fight that battle in an Arizona court. That’s give Glendale a pretty big home field advantage. Bankruptcy proceedings allow companies to escape leases but it’s not a foregone conclusion. When the Pittsburgh Penguins tried to go that route several years ago, a well written arena lease was enforced by bankruptcy court. That ended that end run.
And if he gets this far, then we’ll deal with the thorny issue of selling the club to a (perspective) rogue owner who wants to skirt NHL rules, territorial rights and customs and ship the team off to Southern Ontario. Remember the Balsillie offer is a conditional offer based on moving the team. Those conditions, along with the forced sale would mobilize the legal might of the National Hockey League to preserve their rights to dictate who gets to be in their club and where the teams can set up shop. That would be a legal battle for the ages and one that would likely drag on for several years.
The Moyes to Balsillie pass will likely get broken up in its’ early stages. The chances are good that the Coyotes will get another chance to make Phoenix into a hockey town. Maybe the seriousness of this situation and an improved team will get the public's attention and start pointing the team towards a more successful future.
And depending on how long and far along this issue is litigated, it could drag on years. The people who will get rich on this deal will be the lawyers. All of the many lawyers who have been called into action. And that my friends is why I sent my son to law school.
Sunday, May 10, 2009
Introducing The Western Hockey Exchange
Welcome to the humble beginnings of Western Hockey Exchange.
Since moving to Phoenix, I have been thinking about starting a blog that focuses on hockey in the Western US and Canada. Having lived all over the US, I’ve often found that hockey west of the Mississippi is underreported and often unappreciated by the North American Hockey establishment. And if you follow an Eastern team, getting good information from western games is just about impossible. I hope to fill a void by following issues and stories that might escape the glare of the eastern hockey media.
My love affair with hockey dates to the late 1950s, mostly as a fan but also from 4 years as a minor league team manager. I can’t remember the first time I watched a hockey game, but I have a crystal clear memory of November 1, 1959. I was listening to my beloved New York Rangers and Montreal Canadians play that night when an Andy Bathgate shot ripped open the face of goaltender Jacques Plante. While Plante was off for repairs, legendary Ranger announcer Jim Gordon announced that Plante would return wearing a mask. What a moment! I called my Dad to my room and he sat on the end of my bed as we listened to hockey history. I didn’t know what it all meant at the time but I certainly do now.
In the 1960s I followed the Rangers devoutly and when they weren’t playing, I would listen to minor league hockey on radio. Great clear channel stations like WBAL in Baltimore covered the American League Clippers. Bob Chase on WOWO described the International League Ft. Wayne Komets. And the Long Island Ducks, perhaps the most colorful team in minor professional hockey, played 10 miles from my home. Their games were broadcast by Al Baron, the electrical store proprietor who went on to become the team owner. He was a wonderful man who once bought me lunch when my school newspaper sent me off to write about the Ducks.
In the early 1970s I went off to Syracuse University and I began to follow the Syracuse Blazers, first as a fan and later as a front office jack of all trades. I had the opportunity to learn the business firsthand with one of the truly dominating minor league teams. From Syracuse I went on to Roanoke, VA and San Diego, CA where I served as the general manager of minor league teams. And along the way, I’ve also been a sportswriter with the Syracuse Post Standard and a sportscaster with WSLS-TV in Roanoke, VA.
Minor league hockey was struggling mightily with the recession of the mid-1970s. At that time, I had the good fortune to get in the restaurant business, where I have built my career as a marketing executive at some of America’s largest chains. Throughout the years, I maintained my love affair with hockey. At various times, I’ve held season tickets for 5 NHL teams and still have my Rangers tickets. My wife and I long planned our move to Phoenix, building a home 15 minutes away from the new state of the art arena.
My original intent was to start blogging this September. That was before all hell broke loose in Phoenix.
When I heard the news about the Coyotes leaving town, it brought me back to a day almost 52 years ago. When my grandfather came home from work that day, he sat in his chair and cried. I wasn’t really old enough to understand but my grandmother took me aside and told me he was crying because the Dodgers were leaving Brooklyn. It took me years to understand what that moment meant to him. 52 years to be exact.
Now seems like the right time for me to raise my voice. I appreciate the “great call” comments on local sports radio and acknowledgements my posts receive. For those of us who have made significant life decisions around hockey, this is an important and dramatic time. Anyone who has the passion of a hockey fan knows and understands how much this means to so many people.
So here we go. I’d love to hear your comments, both in general and about specific stories, and I look forward to making the Western Hockey Exchange a good read whenever my time allows.
Since moving to Phoenix, I have been thinking about starting a blog that focuses on hockey in the Western US and Canada. Having lived all over the US, I’ve often found that hockey west of the Mississippi is underreported and often unappreciated by the North American Hockey establishment. And if you follow an Eastern team, getting good information from western games is just about impossible. I hope to fill a void by following issues and stories that might escape the glare of the eastern hockey media.
My love affair with hockey dates to the late 1950s, mostly as a fan but also from 4 years as a minor league team manager. I can’t remember the first time I watched a hockey game, but I have a crystal clear memory of November 1, 1959. I was listening to my beloved New York Rangers and Montreal Canadians play that night when an Andy Bathgate shot ripped open the face of goaltender Jacques Plante. While Plante was off for repairs, legendary Ranger announcer Jim Gordon announced that Plante would return wearing a mask. What a moment! I called my Dad to my room and he sat on the end of my bed as we listened to hockey history. I didn’t know what it all meant at the time but I certainly do now.
In the 1960s I followed the Rangers devoutly and when they weren’t playing, I would listen to minor league hockey on radio. Great clear channel stations like WBAL in Baltimore covered the American League Clippers. Bob Chase on WOWO described the International League Ft. Wayne Komets. And the Long Island Ducks, perhaps the most colorful team in minor professional hockey, played 10 miles from my home. Their games were broadcast by Al Baron, the electrical store proprietor who went on to become the team owner. He was a wonderful man who once bought me lunch when my school newspaper sent me off to write about the Ducks.
In the early 1970s I went off to Syracuse University and I began to follow the Syracuse Blazers, first as a fan and later as a front office jack of all trades. I had the opportunity to learn the business firsthand with one of the truly dominating minor league teams. From Syracuse I went on to Roanoke, VA and San Diego, CA where I served as the general manager of minor league teams. And along the way, I’ve also been a sportswriter with the Syracuse Post Standard and a sportscaster with WSLS-TV in Roanoke, VA.
Minor league hockey was struggling mightily with the recession of the mid-1970s. At that time, I had the good fortune to get in the restaurant business, where I have built my career as a marketing executive at some of America’s largest chains. Throughout the years, I maintained my love affair with hockey. At various times, I’ve held season tickets for 5 NHL teams and still have my Rangers tickets. My wife and I long planned our move to Phoenix, building a home 15 minutes away from the new state of the art arena.
My original intent was to start blogging this September. That was before all hell broke loose in Phoenix.
When I heard the news about the Coyotes leaving town, it brought me back to a day almost 52 years ago. When my grandfather came home from work that day, he sat in his chair and cried. I wasn’t really old enough to understand but my grandmother took me aside and told me he was crying because the Dodgers were leaving Brooklyn. It took me years to understand what that moment meant to him. 52 years to be exact.
Now seems like the right time for me to raise my voice. I appreciate the “great call” comments on local sports radio and acknowledgements my posts receive. For those of us who have made significant life decisions around hockey, this is an important and dramatic time. Anyone who has the passion of a hockey fan knows and understands how much this means to so many people.
So here we go. I’d love to hear your comments, both in general and about specific stories, and I look forward to making the Western Hockey Exchange a good read whenever my time allows.
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