Balsillie would forgo NHL aid if Coyotes moved here
May 25, 2009
Steve Milton
The Hamilton Spectator
http://www.thespec.com/News/Local/article/571505
BlackBerry baron Jim Balsillie will this week officially file an application with the NHL to move the Phoenix Coyotes to Hamilton.
And he's also willing, if the National Hockey League so desires, to forgo dipping into the league's revenue-sharing pool.
Balsillie's team is ready to make that concession because they are confident the Hamilton market will offer enough support from an eager fan base to make it a profitable venture.
Balsillie filed an application with the NHL to buy the Phoenix Coyotes late last week, and early this week he'll officially apply to the league to move the team to Hamilton.
So what exactly are the conditions the NHL will require him to meet before relocating the team?
Although he'd agreed to buy the Coyotes from Jerry Moyes as part of Moyes' contentious bankruptcy claim, Balsillie hadn't filed any applications to the NHL until Judge Redfield Baum told him to last week.
While the details in Balsillie's application to move the team and of a court filing he'll make before June 13 aren't yet known, an earlier court document filed by Moyes and the Coyotes offers a window into the argument the Balsillie camp will mount.
Last week, the Coyotes filed a document which deals, almost point by point, with Section 36 of the NHL bylaws pertaining to franchise relocation.
While Balsillie promised two years ago in his drive to buy and move the Nashville Predators not to accept his portion of NHL revenue sharing in Hamilton, should the team qualify, there is no such concrete promise in Moyes' filings, nor is there likely to be in Balsillie's documents.
But there was a fuzzy reference to it when the Coyotes answered the bylaw requirement that a prospective owner can absorb any early losses in a new location.
"(Balsillie) is willing to and able to sustain losses during the initial years of operation (in Hamilton), and is further committed to operate profitably without subsidy from other NHL teams," the Coyote filings said.
Yesterday, Balsillie's spokesperson Bill Walker told the Spec,"We anticipate operating profitably in Hamilton by bringing NHL hockey to the best unserved hockey market in the world and therefore not drawing on revenue sharing under the CBA (Collective Bargaining Agreement). Our support from more than 130,000 fans and growing on
www.makeitseven.ca tells us there's great demand for a seventh NHL team in Southern Ontario."
The first factors member clubs are supposed to take into account in a proposed relocation are whether the franchise has any reasonable chance to be viable in its current location and whether new ownership would make a difference in that location.
In response, the Coyotes point to the $300 million owner Jerry Moyes has sunk into the club, the $73 million the team has lost during the past three years and that "no prospective owner or investor has stepped up with a plan to make the club financially viable in Phoenix."
Here are the Coyotes' other key replies to major points of consideration in the league bylaws:
* The extent to which fans have historically supported the team in its current location:
The Coyotes point to the team's 24th overall ranking in NHL attendance, its low ratio of ticket revenue to overall revenue (fluctuating between 40.7 and 43 per cent, compared with an NHL average of roughly 50 per cent) and the low average ticket price ($12.21 below the NHL average) that the Coyotes must charge in order to attract fans.
* Whether the current owner has made a good-faith effort to find prospective purchasers who are prepared to continue operating the club in its current location:
The Coyotes answer that Moyes has tried to find an owner for a year and, at the NHL's suggestion, hired Citibank Banking Group to help sell the team. But no offer could be found that would take care of creditors and keep the team in the desert. The NHL will certainly counter that with the Jerry Reinsdorf offer and recently revealed interest in the team from minority owner John Breslow.
* The extent to which the club might be operated in its current location in a more prudent manner.
The Coyotes answer brusquely that the Coyotes' financial problems are not due to mismanagement. The team has taken several cost-cutting measures, including reducing staff; it has tried (unsuccessfully) to get arena-lease concessions from the City of Glendale; and it used younger players in order to have the fourth-lowest payroll in the league-- $25 million less than top-spending New York Rangers. However, since the Coyotes filed this brief, Glendale has said it will make lease concessions that will make the team financially viable at Jobing.com Arena.
* Whether there will be a suitable arena available to the relocated club:
NHL Commissioner Gary Bettman has taken to referring to it as "antiquated," but Coyotes say Copps Coliseum, with a 17,326 capacity for hockey, is suitable for NHL hockey and point out that funding for substantial rink improvements is being arranged.
* The extent to which the proposed transfer would harm the image of the NHL as a major league:
The Coyotes team says the NHL's image will actually improve by "immediately resolving the bankruptcy of a member team." They also point to the additional rivalries created by a new team in Ontario, which would increase the number of paid fans of both home and away Coyotes games.
* The extent to which it appears likely, based on population, demographics and interest in hockey ... that support for a franchise (in Hamilton) will make it financially viable:
Both camps -- the Coyotes and Balsillie -- consider this a "slam dunk" and argue the area has a population of more than 7 million "a substantial percentage of which are likely to be avid hockey fans."
When Balsillie files his application, it's likely to contain far more detail about the Hamilton market and Copps Coliseum than the Coyotes' court submission did.
If the issue ever comes to a vote of NHL governors, Balsillie would need 75 per cent in favour to be accepted as an owner, and a simple majority to relocate the team. However, the Coyotes argue that the bylaws also contain a clause that allows a territorial veto -- in this case by the Toronto Maple Leafs--and that is the heart of their antitrust allegations.