#Throwthesnake Goes Big Time

Things happen fast on the Internet.  This should come as no news to people who, unlike myself, get around without the use of a cane and don’t spend large portions of the afternoon yelling at those damn kids to get off the lawn.

Monday morning, I checked Twitter around 9 or 9:30.  I did a bunch of work and generally had to be away from the online world for several hours in a row.

When I returned, all hell had broken loose.  Apparently, Chemmy from Pension Plan Puppets had floated the idea that fans of the Phoenix Coyotes ought to be throwing snakes on the ice as a counterpoint to the Red Wing tradition of cephalopod-tossing.  He and Coyotes-blogger and PPP-friend @TravisHair started discussing it, and one thing led to another, and very shortly thereafter a twitter-meme was born;  apparently, it became the #1 trending topic on Twitter for a while.

Travis ran with the ball and even tried to help the Coyotes out a bit by turning this awesome little groundswell of fan support for a troubled team into something positive for the club – he sought their official blessing for the phenonmenon, but was rebuffed rather summarily.  Score one for suits with no vision.

The story got picked up by Puck Daddy, and from there, places like some blog that apparently NBC has.

All eyes in the PPP community were on the ice in Phoenix tonight when the Coyotes took to the ice against the Red Wings in game 1 of their first round series.  Would the snakes hit the ice?  The Wings scored first because they’re terrible human beings, but shortly thereafter Keith Yandle tied the game for Phoenix and at least one snake hit the ice.

Then the #throwthesnake phenomenon hit the big time as it was discussed at the intermission on Hockey Night in Canada during the iDesk segment by Jeff Marek and Scott Morrison.  YouTube goodness follows:

Chemmy correctly pointed out thereafter on Twitter that he is responsible for getting the Coyotes their only positive publicity from the Canadian media since…well, forever.

UPDATE: The game is now over. Phoenix wins 3-2; the power of the thrown snake is not to be trifled with.

Apparently, the #throwthesnake phenomenon was also mentioned on the TSN broadcast tonight, but I was busy watching the Versus feed – where they were ignoring Muhammad Ali for a period and a half, so I missed that bit.

Coming from America: Why the Maple Leafs Will Sooner or Later Have Neighbours

Copps Coliseum Panorama_0122
Coming Soon to This Corner - NHL Hockey?

James Mirtle’s work following the Phoenix Coyotes bankruptcy matter as it has unfolded has made for a fascinating read.  If you ignore for a moment the fact that this corporate soap opera is a passion play wreaking havoc with the emotions of fellow hockey fans – fans  who are loyal, hardy and dedicated enough to (in the middle of a desert, mind you) root for a perenially underachieving and brutally mismanaged team that has so often been an unwanted afterthought for its own owners – it’s been an entertaining diversion, and a way to fill the days in an off-season locally short on summer weather.   At some point in the next few days Judge Redfield T. Baum will deliver a ruling as to whether Jim Balsillie’s company, PSE, is a bidder qualified to participate in the upcoming auction of the team.  Many other consequences will flow from that ruling for the Coyotes and their fans;  depending upon the identity of the successful bidder, a greater or lesser likelihood that the team will leave town.  Whatever the result, appeals and further litigation remain a distinct possibility.  For the Coyotes, all that is presently certain is that there will be uncertainty surrounding the future of the team.

Regardless of Mr. Balsillie’s status upon delivery of that ruling, however – whether he’s declared a qualified bidder or not -Balsillie’s desert offensive is likely to have far-reaching implications for fans of NHL hockey in southern Ontario.  Specifically, it now seems very probable that at some point, someone will bring another NHL team to southern Ontario.  If and when that happens, fans settling into their seats before the faceoff will have Balsillie and his attorneys to thank for it.

Balsillie’s choice to force his showdown with the NHL into the public arena via the courts has, for the NHL and the Toronto Maple Leafs in particular, opened a kind of Pandora’s Box.  As a result of the public nature of this dispute, we now know the following things about the business of hockey in southern Ontario:

  • There is potful of money to be earned by anyone who puts an NHL franchise in Hamilton.  Through Dr. Andrew Zimbalist’s declaration on the relocation fee issue, we learned that PSE was estimating (in its pro formas) first-year revenues for the Hamilton club at almost $73 million dollars – in relative terms, more than 12 other NHL clubs, and “within five million dollars” of another four (see Zimbalist’s declaration, paragraph 12).  According to Zimbalist’s declaration, PSE believes that revenues would increase by a little more than 9 per cent annually in each of the first four years, as renovations to Copps Coliseum are completed and the capacity of the building to earn some bank for its corporate masters is suitably tricked out. Common sense tells us that Balsillie’s expert analysis, advanced in a situation in which (by relocating into a market) he may well be required to compensate the league for the theoretical value of a lost expansion opportunity, would have a tendency to quantify the value of that lost opportunity somewhat conservatively.  Seventy-three million bones coming in the door starting in year one is likely to get the attention of sports-minded capitalists everywhere.
  • Did I mention that there is a potful of money to be earned by anyone who puts an NHL franchise in Hamilton?  The NHL responded to Zimbalist’s declaration with two reports of its own:  The first estimated the value of a team in Hamilton as between $261.8 million and $279.8 million.   The second estimated the value of a team in Hamilton as approximately $315 million. By comparison, the same reports suggest the value of a team in Phoenix somewhere in the range of $120 million to $176 million dollars.
  • The Toronto Maple Leafs don’t have a “veto” that would allow them to prevent another team from moving into the area.  The commonly accepted wisdom is that the Leafs have been the driving force behind the league’s historical refusal to place a team in Hamilton.  In view of the almost papal level of secrecy surrounding NHL Board of Governors meetings, it is difficult to know the truth of the matter on that issue, but it does seem clear that – at least as recently as 2006 – the Leafs have behaved as though they do have a veto over such a relocation.  Forced into the courts by the Coyotes bankruptcy, however, and facing certain immutable facts of life in terms of the applicable antitrust law, the NHL sees the writing on the wall and cannot espouse the untenable position that one of its member clubs could unilaterally prevent the relocation of another into its home territory.   Backed into a corner in the courts, the NHL has had no alternative but to publicly align itself with the “no Leaf veto” theory.   Whatever the secret and private reality of the arrangement between the Leafs and the NHL in the past on the issue of the veto,  the league has now been forced to publicly espouse the view that relocation of a member club into the territory of another may be approved by a majority vote of the Board.
  • We also know that quite apart from the Coyotes, there are already a number of other NHL franchises in failing financial health.

So let me do the math for you:  quite a few NHL teams are losing money in their current market.   The market in southern Ontario has been identified as undoubtedly superior to many such existing markets.  It seems likely that a team relocating to that market would quickly become one of the more valuable properties in the league.

And all it takes is a majority vote of the Board to get you there.

It’s one thing for the NHL to clandestinely or surreptitiously enforce a Maple Leafs veto by denying entry into the league for someone wishing to avail themselves of the Hamilton opportunity (perhaps by rejecting the prospective owner on the grounds of his purported lack of “character” or “integrity”;  such a thing might easily be accomplished when the votes are taken behind closed doors by folks who are already members of the fraternity.  It’s quite another for the league to be able to preserve unanimity on this issue in perpetuity among its existing members.  Sooner or later, one of the have not franchises – already admitted into the league, present for the discussion and votes on all league issues, able to avoid any backroom chicanery – will seize the southern Ontario opportunity for itself.

How long will it be before a club wanting to seize such an opportunity would have the votes necessary to achieve the result?  Teams struggling in their own markets and receiving financial assistance from their richer brethren might want to see one of their fellow have nots stop taking funds from the revenue sharing pool – and likely start paying a substantial amount into the fund instead.

No Fat Lady Yet: Tidbits from the Balsillie/NHL Ruling

Not Yet Needed in a Phoenix Courtroom

I spent some time this morning (on my coffee break, relax everybody) looking at what Judge Redfield T. Baum had to say about the Phoenix Coyotes bankruptcy proceedings (Odin Mercer at Five for Howling has posted a link to a copy of Judge Baum’s ruling.)

Much will be made of this ruling – and properly so – as a huge victory for those intent on keeping the Coyotes in Phoenix (including the Coyotes’ fans, the NHL and one Gary Bettman).  Any result that has the effect of delaying an auction and preserving – however temporarily – the status quo concerning relocation rights, transfer fees and the NHL’s procedures in respect of these matters has to be seen as a loss for Balsillie’s side.  This is so for many reasons, not the least of which is that Balsillie has lost the advantage of surprise at this point;  with the status quo preserved and the relocation train stuck in the station, the NHL has gained an opportunity to organize a competing ownership proposal, one that addresses the league’s concerns and (you can bet your sweet ass) does precious little boat rocking in terms of territorial rights, franchise relocation, etc.

My initial sense, though, upon going through this ruling, is that the victory is far from complete for the NHL forces.  In particular, it seems likely to me that:

  1. The drama is far from played out in Phoenix as a result of this ruling; and
  2. Lawyers for MLSE will be sitting Brian Burke and the Directors down and giving them some unwelcome news:  specifically, they’ll be telling the Leafs’ brass that it probably won’t be long before they have neighbours of one variety or another.

The NHL can’t reject Jim Balsillie as an owner.

As to the first point, regarding the change of ownership issue alone (i.e. transfer of the team to Balsillie’s company PSE, absent any consideration of the league’s geographic restrictions essentially requiring the Coyotes to stay in Phoenix), Judge Baum has ruled as follows (at p.8 of the ruling):

Significant to the court here regarding the objection to the transfer of ownership of the Phoenix Coyotes is the fact that in 2006 the NHL approved PSE [a holding company controlled by Balsillie] to become a member of the NHL.  The court has the firm sense that if the only issue here was PSE purchasing the Phoenix Coyotes [no relocation term] there would be no objection from the NHL.  The law implies in every contract a covenant of good faith and fair dealing.  Even when one party retains, by virtue of the contract, a right of approval or disapproval or a discretionary power over the right of the other, such powers must be exercised within the parameters of the duty of good faith (citation omitted)…Absent some showing by the NHL that there have been material changes in PSE’s circumstances since 2006, it appears to the court that the NHL can not object or withhold its consent to PSE becoming the controlling owner of the Phoenix Coyotes.  Therefore and based upon this record, the court concludes that the NHL can not declare a default solely due to the change in ownership terms of the APA.

This would seem to be a very powerful signal from the court that Balsillie can’t be rejected in good faith by the NHL as an owner, provided that he comes up with an offer for the team that otherwise would conform with the bankruptcy code.  As I see it, in this portion of his ruling, the judge has signalled that the race is on – he’s telling the NHL to get its alleged competing bidders together and get them to the table with their best offers, because Mr. Balsillie – if he wants to – can buy this team.  The judge is telling the NHL, “You can’t say Mr. Balsillie is an unacceptable owner.  You’ve already accepted him in principle into your club.”

What’s the big deal about that, you might ask; Balsillie wants a team in Hamilton, not a team in Phoenix. If he can’t move the team, he won’t want to buy it, right?  Well, maybe – but maybe not.