Bad news for U.S. economy good news for Hamilton?
October 1, 2008
And now, a little something to perhaps brighten your day in the face of all of those scary headlines: Could it be that an unexpected, happy consequence of the economic meltdown in the United States will be a second NHL franchise in Southern Ontario?
Hear this one out. It is clear now that, despite taking a severe haircut of his own over the past week (more than a half-billion dollars on his Research In Motion shares alone), Jim Balsillie is still fighting the good fight, and still determined to make NHL commissioner Gary Bettman's life miserable
Stonewalled in previous attempts to buy the Pittsburgh Penguins and Nashville Predators, Balsillie remains steadfast in his pursuit of an NHL franchise, perhaps now through the bankruptcy courts, where the 27-per-cent interest in the Preds formerly held by alleged flim-flam man William (Boots) Del Biaggio is in play.
Getting from there to the opening faceoff at Hamilton's Copps Coliseum will be a tricky, complicated business.
But understand the reason Del Biaggio - who is now in bankruptcy protection, facing fraud lawsuits from several lenders and under investigation by the FBI - bought the stake (allegedly with other people's money) in the first place was his belief he could gain control of the team when it inevitably failed in Nashville and move it to Kansas City.
He went so far as to solicit investors based on that premise.
If Balsillie is indeed interested, he must have similar views - minus the Kansas City part - and he understands that by working through the bankruptcy courts he can't be derailed by NHL politics or the legal butt-covering that prompted Bettman to twice make sure a sale to Balsillie was never consummated.
But even if it doesn't work, even if Balsillie is stymied once again, it isn't the end of the quest. And the continuing U.S. economic crisis, though it may well shave down his personal fortune, is playing right into his hands.
Life is going to get tougher for all kinds of businesses, including those at the bottom end of the professional sports food chain. Franchises with cash-flow problems, franchises carrying significant debt, franchises in sports that don't provide television-money lifelines are going to struggle to survive.
Everyone understands there were at least four NHL teams that fit that description even before the stock markets imploded: the Florida Panthers, Atlanta Thrashers, Phoenix Coyotes and Nashville.
You can bet there are a few more now, absolutely thrilled to be hitched to a collective agreement that forces them to spend at least $41-million on player salaries this season.
To keep Balsillie out of Nashville, Bettman performed the finest sleight-of-hand manoeuvre in his term as commissioner: first persuading then-Predators owner Craig Leipold to forgo a once-in-a-lifetime chance to cash out, then finding Leipold a nice soft, profitable place to land with the Minnesota Wild, then bringing Del Biaggio into the mix after some apparently slapdash due diligence.
(That Leipold in turn loaned Del Biaggio money to buy his stake - money Leipold quite likely won't ever see again - makes the delicious circle complete.)
But just try doing that again. Soon enough, a beleaguered team owner unwilling to continue believing that prosperity is just around the corner is going to take Balsillie's cold hard cash and take his leave from professional hockey.
Could the league governors still reject Balsillie as an owner?
Well they could try, but presuming he meets their own rather loose standards (remember, the NHL leads all professional sports in the number of owners that have left in handcuffs), they would do so at the risk of legal action.
If Balsillie got his team, could they try to block him from moving it?
Well, again, they could try, but if he met the criteria for relocation laid out in the NHL constitution (the reason Balsillie began selling season-ticket futures in Hamilton when it looked like he'd landed the Preds), they'd be similarly inviting a trip to the courts. And the NHL has in the past done everything possible to prevent its territorial-rights provision from being put to a legal test.
So if Balsillie buys the Predators or another club, it's a reasonable bet it would eventually wind up where he wants it.
It's a reasonable bet, also, that in perilous, uncertain economic times, the house of cards that is NHL overexpansion is going to start shaking.
Bad news for somebody, somewhere. But for others, perhaps, an opportunity.