by SENShobo on 05/06/09 at 12:13 PM ET
It’s been less than a day now since the Phoenix Coyotes have applied for Chapter 11 reorganization, and Balsillie’s put his offer on the table.
You may think you’ve heard it all, that Jim tried twice with the Penguins and Predators and failed (Pittsburgh Penguins, Predators, Phoenix, talk about alliteration in takeover targets). Truth is, this may be his best shot yet, as the one most resembling the current bleak state of the economy.
He’s been a dog sitting on a porch, chasing every car that comes by until they pass him by. Always chasing, never catching, and never knowing what he’ll do when he finally catches one. I’ll let you know whose words those are when Jim’s PR gets back to me, but regardless it’s about time we find out just what the ol’ dog might do.
You can see the dream. Bringing more of Canada’s sport back home. Shane Doan a captain in Canada. Wayne Gretzky coaching a team that likely won’t ever be aware that purses have strings, rather than one strung up by them, likely to be just a short drive from his hometown of Brantford, Ontario.
What’s on offer would normally be hard to compare, but thankfully we’ve got the recession to draw from. You’ve got a team worth a relatively paltry $142 million, according to Forbes, ranked dead last among the League’s 30 teams. The team, post-lockout, reportedly loses $30 million annually.
With Balsillie ponying up $212.5 million to pay down the various creditors, along with $17 million in Debtor In Possession financing to get them through the Chapter 11 hearings, that looks just like all those people right now, floating around with mortgages worth more than their house. With losses reportedly as deep as $200 million going back eight years, we also seem to have a toxic asset on our hands as well.
What will Bettman, that is to say the League, do? So far, they have already removed owner Jerry Moyes “from all positions of authority to act for or on behalf of the Club.” Too bad they couldn’t have done so before he went for Chapter 11, but are they really going to say that Balsillie can keep his $17 + $212.5 million, and on behalf of Mr. Moyes that he would most certainly like to continue losing tens of millions annually, with only the 2033 end of the arena lease in sight as relief, barring its breach should the Chapter 11 proceedings be completed? Or perhaps that he would love to take a drastically lower offer, such as those allegedly close to being tabled, to keep the team in Phoenix while paying back all the equity holders but himself?
When it was Pittsburgh, you had a team with a lot of hope and promise just looking for that extra hand, backed by one of the greats in Mario Lemieux, and along with a new arena Balsillie never really stood a chance (just ask Charles Wang what a key part those arenas can be). With Nashville, as serious as things appeared, you had an owner willing to part with his ‘prize’ for less than Balsillie’s offering, in exchange for a brand new franchise to take over in the Minnesota Wild, something Mr. Moyes likely has no interest in.
We’ve run out of excuses. Bettman may well be the general, but bankruptcy cedes power to the emperor, and all he or she cares about is getting as much money as possible for those creditors. No matter the incentives the city provides, it’s highly unlikely that anyone could be tempted to outbid Balsillie by even the $5 million they would have to, let alone that they could reach his likely all but unimaginable reserve bid.
When the recession came and everything collapsed on the ‘strength’ of those sub-prime mortgages, the blame lay both with the individuals foolish enough to take them, misguidedly failing to look past those introductory rates, but also with the banks who gave them out, failing to do reasonable due diligence on what should have clearly been seen as nothing but a foolish proposition. In the quest for expanding this League, it rests with both the owners and the League to ensure that markets can support teams, through all the levels of management, leases, and other circumstances, and it’s about time to see that essential philosophy put into action.
It won’t ever shine brightly on the League if they continue to peddle teams as beacons of sporting excellence, while seemingly allowing franchise after franchise fall on hard times due to owners under criminal investigations, crumbling financing, reneged deals for improvements and upgrades, especially if they seem to suggest with their actions that the ‘corporate restructuring’ that’s supposed to be saving jobs and businesses around the country right now is just crazy talk. It might even be the wedge that drives itself between Bettman and a greater portion of the teams’ owners, watching him advocate that a team be kept in place, sucking up revenue sharing and even League monies (currently pinned at $35 million), rather than have the team potentially become profitable, hopefully leaving more money in other successful franchises’ pockets, and more revenue sharing for those teams still struggling to varying degrees.
Balsillie started that work when he took deposits for “Hamilton Predators” season tickets, and his makeitseven.ca website for registering support for the move is at it again, very much a venting session for that ‘unserved market’ he spoke of. You can just see his face lighting up as his BlackBerry goes off every couple seconds, signaling another supporter, since the names haven’t gone anywhere else yet. RIM’s business endeavours have not been guided by a fool all these years, and Balsillie will do the foot work to find out how to make this happen.
If anything, Balsillie’s public statements and endeavours regarding his pursuit of franchises are an aspect of ownership that the League should be courting, the passionate, involved, dedicated owner, who seeks to continually put the best product on the ice for the fans, and does not look at the team as mere numbers and figures and profits to be maximized. That this potential franchise could soon find itself neighbour to the Leafs, with the oft-dehumanized ownership of the Ontario Teacher’s Pension Plan, is no small irony.
It will be a tough battle, but an even more tremendous task for the League to pin Moyes with this perpetual debt like a crude ball and chain.
And hey, since there is an undisputed Red Wings tilt to this site, I’ll even add this one potential surprise gift to think about: With another Western Conference team heading East, and no real viable dance partner to switch with to be found, a real shake up might be needed, and for once things might even go Detroit’s way (ignoring those Cup’s they’ve won and those sweet long-term contracts they’ve inked).
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