How High Will He Go?

This is Jim Balsillie's trump card. And a measure of how much he wants this to happen.

All along, throughout the slow, molasses-like bankruptcy process of finding a new owner for the Phoenix Coyotes, the unsaid issue behind the scene has been Balsillie's deep pockets and the limit, if there is one, to how much he might be willing to pay for the Coyotes in an open auction.

Of the three bidders left, none seem likely to out-bid the Waterloo billionaire on a dollar-to-dollar basis. In theory the NHL could, but there have to be real limitations on the price NHL owners would be willing to pay to buy this team through auction. It's one thing to bid $140 million with the out being selling the team in order to move it elsewhere after one year.

But let's say Balsillie, who upped his offer to $242 million last night, would be willing to go as a high as $400 million to get the Yotes and move them to Hamilton. That price might even make sense for a franchise in lucrative southern Ontario, but the NHL would be facing a major loss if it wanted to try and match that offer and later sell the team to Las Vegas or Kansas City or wherever.

Open Ice Holdings, meanwhile, has $150 million on the table, but there are lots of conditions on that, certainly enough that the NHL felt it had to put its own bid in.

So how high would Balsillie be willing to go? Assuming this auction finally goes ahead on Thursday and Friday, we may finally find out. More specifically, we'll find out if he's willing to try to blow any and all other offers out of the water.

Comments

[Matt]

$400 to $450 million sounds about right, I imagine.

Damien, I'm curious to hear your thoughts about this: yes the NHL's mandate under Bettman is to grow the game in the (deep) South, but how can they come across as pro-Canadian at all when they admit Hamilton "may be a market worth investigating", and then prefer either Las Vegas or Kansas City? You can't fault them for wanting to expand the game in the US, but it always seems to come at the cost of the Canadian fanbase.

[Bryan M]

I think Balsillie might be pushing a bit too hard, but both him and the NHL seemed hell-bent to lose the public-relations battle. What a mess. A boring, tiresome mess at that.

My advice to Jim Balsillie remains the same. Save your money - don't give it to the NHL, which doesn't deserve it. Wait 2, 3, maybe 4 years for a few other sun-belt franchises to fail (or the Coyotes fail again, which they will if they remain in Phoenix or go to Las Vegas). At that point the NHL will need your $, and I'll bet you scoop up a franchise for $175 million or less. Any money you save, pump into a fancy new arena wherever you locate your team.

[Arthur Bailey]

I wanted this team in Hamilton.

But now that I moved from Toronto to Red Lake, ON, I'd rather see an NHL team in Winnipeg, which is only 6 hours away, as opposed to 24 hour drive to Hamilton.

BUT, Bettman has shown that as long as it's on his watch, Balsillie's admittedly underhanded tactics are the only way to make it 7. So I still hope this pays off for Mr. Blackberry.

Making it 8, will probably involve a changing of the guard for the NHL brass. The day that happens cannot come soon enough.

[DamienCox]

Damien here. . .to answer Matt's query, I don't think the NHL has ever said it prefers KC or Vegas. That's most people guessing, and on the basis of recent NHL history, the guess is probably right. Moreover, I think we've all learned, unfortunately, that what Bettman and Co. actually say and what they actually want aren't necessarily the same thing, and really its what the 30 owners want, and they'd all rather go anywhere but to a small Canadian market that doesn't really add anything for the 24 American-based teams.

[Victor]

I can't believe people think this is boring. I applaud JB for what he is doing. It is perfectly leagal and he has tried do get a franchise the ""clean way" but could not. Anyone who thinks it is not because of the leafs is a fool. I'm a leafs fan and I think it would be fun to play Hamilton 6 times a year. For some reason the Leafs think it will hurt its bottom line, and don't be fooled, it is all about the money, period. JB has the means and the wherewithall to take this as far as he has to. How many of you critics are willing to put yourself out there like that. I would love to be in his position because while this is business it is definately a game for him too. He must be loving it. This latest move is timed perfectly, right before a crucial ruling. How can the judge dismiss him now, I can't see it. Not only that but come auction day that is when he really gets the cheque book out. I can't wait for the Leafs to Hamilton on Hockey Night in Canada. Go Leafs go.

[PG]

I am totally confused... an NHL team could be worth $400 million in Hamilton, but the NHL wants to keep it in Phoenix, where according to their own valuation it's only worth $140 million?

Hmm, but the Leafs have no veto. Riiiiigggghhht

[Giller]

This is nothing about the Leafs. This really comes down to Bettman and the NHL governors wanted control of the process and their league. They do not want to let some cowboy come in and ride roughshot all over them. This would set a very bad precedent and open the doors to others. The point being - if you want in the club, you have to play by their rules. Jimmie boy isn't doing this, therefore, they don't want him in. If I was an owner, I wouldn't be very impressed with all his name calling and trying to take over the whole process.

[Aditya]

NHL doesn't think the relocation fee of $195 million is enough....ye right.....

[Shah]

NHL owner Del Biaggio jailed 8 years and NHL is questioning Balsillie charactor, it's joke, NHL owners are anti canadian period.

[Hendrick]

I wonder if perhaps the reason the NHL does not want to move a team into Hamilton may ultimately be because when expansion does happen again, the franchise fee for that market will be huge. If a team there is worth anything close to what the Leafs are, why would the NHL want to take less to have an existing team simply take over that market. I doubt it has anything to do with growing the game in the USA.

[Peter Wallace]

The Garden Gnome's Golden Parachute

As it turns out, Ice Edge Holdings was a stalking horse bid and not real after all. Instead it was dreamt up by the NHL executives and BOG and designed to keep the US Competition Bureau from getting suspicious. The NHL knew that IEH was going to bail, so they backstopped it with their own "conflict of interest" and hastily thrown together bid.

Now we're down to two bids...the bullsh*t bid vs. the real bid. The NHL has the moxy to submit the lowball bid while trying to prevent the only legitimate bid from the auction. More manoeuvers and shennanigans from our friend, the garden gnome.

Sorry GB, but your game is just about up, as of this Friday. You should start planning your exit strategy as commissioner asap. The NHL goodwill, credibility, prestige and money you squandered in legal fees for this disaster in the desert, will be taken into consideration for your golden parachute.

P.S. Please do not show your face on TV anymore from this point onwards since Canadians have grown exceedingly weary of you.

[Guelphdad]

Damien, do you think the extra $30 million is to make the bid worth more than the NHL bid? I was listening on the radio the other day and they said that if Moyes and Gretzky's money are not considered outstanding debt, but rather an investment, then Balsillie's offer does not include that $100 million? Thus his offer may be $80-$100 million less? So now topping up the $30 extra his bid may at least be considered equal dollar wise to the NHL bid if Moyes and Gretzky's debts aren't assumed by the purchaser?

But yeah on top of that I can easily see him throwing in another $100 million or so.

Look at what he settled the lawsuit filed against copyright infringement of Blackberry or whatever it was. $600 million wasn't it so he could prove his point?

[The Canadian Revolution]

Damien,

The sorry truth is that Gary's American NHL is damaging to hockey in Canada. From moving franchises - and denying logical repriation - to exploiting Canada's love of the game to the tune of $500MM/yr. In fact, the six Canadian teams generate 50% of NHL revenues. 50% of the revenues for 20% of the teams? That's not good ROI for our investment.

Until there is a Canadian League, built upon a model that makes sense for hockey in Canada, Canadians' sporting hopes and aspirations will be held hostage by Americans. We Canadians need to realize that the American NHL (Starpucks) is simply a brand - and for Canadians, we prefer our Canadian brand... in coffee and, soon enough, in hockey.

Join the Campaign for Canadian Hockey Independence. Join The Canadian Revolution

[Maritimer]

I think Hendrick has hit the nail on the head. This really has nothing to do with Phoenix and Glendale, and has everything to do with the next expansion of the league. I read somewhere that if a new franchise opens in southern Ontario, the franchise fees would be on the order of $500 million. For years now, the NHL's official story has been that the league is not expanding. But as other commenters have pointed out, Bettman often says one thing and then does the exact opposite.

[OakvilleFan]

Seems like the former CEO of Copps has written an open letter to Balsille's legal team claiming he has first hand experience with MLSE's veto regarding Hamilton. Here's a link to the website of the newspaper running the story...

www.bayobserver.ca

[DGL]

If I was an owner in Tampa Bay, Florida or Nashville, I'd be making overtures to move my club to Ontario ahead of Balsillie. It's a circus now, Balsillie doesn't want follow any rules. Lets make a division in southern Ontario.
The NHL is sleeping here. I'd be making plans NOW to move a team to southern ontario and collect the proper expansion fees, play dirty, just like Balsillie.
He wants a team alright, he wants a team that will line his pockets with cash people.

[Right Sense]

I was a Maple Leaf fan. Never again!!! I hate them because almost all this mess with Phoenix I am sure it is created by them. They show now the true face and real love for the canadian game. We fed them for years with our hopes and money and in exchange we got nothing to be pleased about. I hope that Mr Basille will succeed and show the world after that what a true canadian means. I am sure that he will resurect this team like no other owner ever did. And I hope taht in one day after all Leafs fans move to Hamilton, that The Maple Leafs will go bankrupt and will be sold in a court action and will be relocated immediately in Cuba.

[Jonathan]

Just further proof that being extremely rich allows you push people around and act without regard for others.
Balsillie wants a team in Hamilton so badly just to feed his ego of being able to "stick it to the man" (i.e. NHL and the Leafs).
Unfortunately, the bigger picture dictates that while a team in Hamilton should be successful, it cripples the NHL as a whole.
Consider:
- moving a team from out of Phoenix means a void in hockey viewership between LA, Dallas, and Colorado (estimated 10-20 million people [not all viewers, btw])minus moving a team to Hamilton (hockey loving area where everyone watches hockey anyway) = -10 million potential viewers
- NHL desperately wants a deal with ESPN; now vie for a deal with 10-20 million less potential viewers... not happening
- Americans do not know Hamilton. Imagine the losses in tickets, concessions, etc. with a Hamilton team rolling into town (think Nashville vs Hamilton, Florida vs Hamilton, Carolina vs Hamilton).
- These losses are incurred directly by the owners and indirectly by the NHL (to be offset with increased revenue from Hamilton i.e. into Balsillie's pockets). Further losses at marginal teams = impending disaster. Revenue sharing at 4.5% of league revenues will not compensate for lost revenues across several markets.

The league has stretched itself into markets it shouldn't be; i will be the first to admit. But at the time of expansion, the NHL was de facto number 2 sport in North America since baseball and basketball were in such decline. Expansion made sense at the time. Now we are at this point... either we contract some teams to shed expenses or get stronger by expanding to new markets (e.g. overseas). Bunkering down into already hockey-rich markets is the first step to becoming a niche sport akin to arena football and lacrosse.

[Will]

To Jonathan: what makes you think or everyone else for that matter, that the team, if it does move to Hamilton, will use the Hamilton name? It'll be the Toronto something or others..

[Hendrick]

With some support from the Canadian Revolution, I would love to hear Damien's comments on my thoughts..... Is it really more about future expansion fees vrs moving an existing team into the lucrative Southern Ontario market for much less?

Lets talk about that Damien.

Cheers,
Hendrick

[Jonathan]

What an insult that'd be to the people of Hamilton... all the more reason for people to hate Toronto, i suppose.

[GBetts]

To Right Sense,

You are fundamentally wrong on one major point: Canada is not already saturated. Hockey, in most markets, is barely the number one sport kids are following. In some cities, it is #2 or even #3 behind soccer and basketball. There is enormous room to grow. The fact that the kids are turning away from hockey in Canada should trigger some panic buttons in New York -- oddly, it's not.

GB

[other mark]

Damien, I think you speculate incorrectly when you say "...its what the 30 owners want, and they'd all rather go anywhere but to a small Canadian market that doesn't really add anything for the 24 American-based teams." How can it be that all 30 owners are opposed to subsidizing a money losing venture (Phoenix) instead of raising additional reviewing for sharing? Small market or not... Hamilton would be a net gain for all concerned. No, I think it is safe to say that Mr. Bettman has pleaded/cajoled many into going along for now. I doubt it will last. And, by the way, I think you also need to really reconsider your definition of "small market." Southern Ontario is better described as an under served market. Place the team in Hamilton, Waterloo Region or North York/Vaughn and watch the cash roll in.

[Right Sense]

To GB:
I am not wrong at all. It is a major sport with millions of live and die fans. It is right that not only me but a lot more past Maple Leafs Fans, will be Hamilton fans from day one. It makes the Right Sense after so many years waiting in shadow and hopping for a miracle from Maple Leafs. I know, it will be crazy but one of the best enemies in the League which will bring us nothing more but joy and a lot of benefits to this sport. If Mr, Basillie will not succeed, I will not watch a Maple Leaf game again. And that's the end of it.