Monday, June 25, 2007

Balsillie Conspiracy Theory

Tom Benjamin (post and comments) outlines an interesting conspiracy theory that everything we are being told about Jim Balsillie's attempts to get a hockey franchise to Southern Ontario are not on the "up and up". Jim Balsillie made a $175 million offer to buy the Pittsburgh Penguins last October. He withdrew the offer just before the Isle of Capri slots deal that was to finance a new Pittsburgh arena fell through. Allegedly, he did this because Gary Bettman forced him to sign papers where he guaranteed to keep the Penguins in Pittsburgh at any cost. This kind of agreement would be unprecedented (and likely not be able to hold up under legal challenge). It is possible that is only the public explanation of what happened. Perhaps, Bettman knew Pittsburgh was a good market and wanted to keep the Penguins there (instead of have Balsillie move them), so he saw this as an opportunity to help Pittsburgh extort an arena from taxpayers. He offered Balsillie first shot at an expansion franchise, as soon as the NHL had created the political climate to add franchises with minimal backlash. So Balsillie willingly withdrew, and we are fed a false reason for it which helps to establish a precedent for new owners being forced to sign agreements to keep from moving franchises.

Along comes the Nashville problem. Nashville is a failed expansion franchise. Even with a team that challenged for first place in the West Conference, they cannot make money in the salary capped NHL. This franchise cannot continue to exist in Nashville because owner Craig Leipold is losing money and wants out. Jim Balsillie can help out. He makes a $220 million offer to buy Nashville to move to Hamilton and Leipold can bow out of Nashville gracefully. Leipold is crazy to not accept an offer like that, so it doesn't anger the Nashville public much (afterall he did all he could to make hockey fly in Nashville). It establishes a ridiculously high sale price for a failing hockey franchise. Balsillie already seems to be bowing out of the race for the Predators despite already agreeing to help renovate Copps Coliseum in Hamilton for the team to be moved. He has asked the NHL office to stop work on the sales agreement until it is binding. He is set up as the boogyman who will force the Nashville Predators to move (it seems likely to Kansas City where there is a waiting empty arena (but not a clearly better market than Nashville). Tim Leiwike, the governor of the Los Angeles Kings and the president of the company that owns the Kansas City rink is in charge of an informal expansion committee in the NHL (that could be a record for the number of conflicts of interest). They are the immediately ready market for an NHL franchise. Likely Nashville could be moved there. After Copps Coliseum is renovated, the NHL can expand and give Balsillie his Hamilton franchise (probably with a reduced expansion fee for his assistance to date). At tat time, likely the NHL would expand by another team and Las Vegas would be the favorite.

Is there any evidence tat all this is true? Only the fact that Balsillie is willing to pay hundreds of millions of dollars to buy NHL franchises to relocate and to renovate Copps Coliseum and then seems to bow out before any decision can be made. By doing this, he is helping Pittsburgh and Nashville owners increase their profits. As the future plays out, we will see if there is any truth to this or if it is idle speculation.

Maybe this is an elaborate conspiracy by Balsillie and the NHL to up franchise values and pave the way for expansion to Hamilton.

But you know, everything I've seen of the business dealings of the NHL over the past 15 years that Bettman's been in power (and by his predecessors, for that matter) leads me to the conclusion that they're just not Machiavellian enough to pull this off.

Whenever I think of the NHL braintrust, I'm reminded of the line Hal Holbrook's character "Deep Throat" said to Robert Redford's character Bob Woodward regarding the Nixon White House attempts to cover up Watergate in the movie "All The President's Men".

"The fact is,these aren't very bright people,and things just got out of hand".
Southern Ontario is an obvious NHL market. Probably the best untapped market in North America. Jim Balsillie is trying to throw hundreds of millions into the NHL. You would think its a perfect fit.

The most damning evidence as I see it is that Balsillie is taking season ticket deposits in Hamilton and paying to upgrade Copps Coliseum, but doesn't bother to submit the right paperwork to the Board of Governors in the NHL. You don't make those kinds of business plans and start to spend money without some certainty that you will have a team - and you don't imagine you will have a team unless you at minimum file the paperwork.
Well we are all too familiar with one bright, but not-so-bright for the NHL and hockey, Gary Bettman. A portion of the troubles besetting the game now can be attributed to him.

The NHL needs to contract, not expand. We are about six franchises over the limit right now. And it's about time that both owners and players face up to that reality.

Perhaps Southern Ontario is a hot area with potential but the NHL needs to settle the issue of encroachment on the Sabres territory.

Kansas City? Hmm, haven't we been there before, i.e., the short-lived Kansas City Scouts? However this is a far preferable location to Las Vegas (!). What are they smoking down there at NHL headquarters?
I think I agree with lyle and dajerz. There's something less than conspiracy at work. The league fears that Balsillie may be more of a headache than his money's worth. (He does seem a bit flaky, and after the Spano debacle, they shouldn't take a chance.) They also are (truth be told) somewhat of a lazy lot. Instead of really ironing out some of the longer-term issues in the NHL, they give us the shootout, the pity point, an overly-unbalanced schedule, the worst TV contract in pro sports history, and talk of expanding yet again.

They'll never shrink to 24 clubs - primarily because the league would never agree to the necessary trimming of the playoff pool to make it happen - but four six-team divisions would give us some truly great teams. Give the division champs byes and let #3-6 in each conference square off in best-of-fives, and then roll from there.

Then let teams carry 25 skaters instead of 23. We'd see more rotating of players based on their strength of play, and they could get regular rest, leading to better games. (Since we're contracting about 150 players, there ought to be enough space to keep fifty more guys around and not hurt the quality of play.)

Three points for a win, one for a tie, nothing for a loss; ten minute OT, five shooters max if you keep the shootout (which I wouldn't, as fun as it is). People will risk that point to win, since 1-1-0 is better for a team than 0-0-2.

Oh, and widen the rinks. It need be no more than one row's worth of seats along one side and one end. And take that stupid trapezoid out and let the goalies play the darn puck. How does it hurt offense to have a keeper who can make a breakout pass and start the counterattack himself?
The NHL exists to make money and all of Nightfly's ideas would decrease the amount of money being made. You will still enjoy and watch hockey if the quality slips with expansion, so they wouldn't lose your business in doing so and they would gain millions from the new TV and arena revenue an expansion will provide.

I don't think there is an conspiracy. But there is certainly talk we aren't hearing about. You can't have a full built arena in Kansas City with all the luxury suites sold out already and not move a team there. The NHL would be stupid not to jump at the chance to get a team going in Kansas City. This town is begging for something to do during the winter.

Anyone that mentions the Scout failed franchise is grasping at straws because they can't come up with anything good. The Scouts was back in the 70's, KC is a much bigger town now and that team was universally agreed to have been horribly mismanaged. I totally discount the Scouts argument against a team in KC.

Sure the league wants to get the team out of Nashville. But you don't say that, lose all your Nashville support then have a deal fall through. You setup the deal first, behind closed doors and then announce the sale. Which does make it a back room deal, but not a shady one involving some elaborate plan amongst billionaires. Its just the only way to do business like this.

The NHL doesn't want another team in Canada. They wont make as much money as they will with the same team in an American market because most American markets mean new fans, new exposure and more money.
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