Thursday, June 18, 2009

Too many clowns in the car.

For such a smart, successful guy, its amazing Jim Balsillie isn’t getting the hint.
The NHL is not Walmart. You can’t go in and take what ever you want off the shelves just because your Visa card has no limit.

In the tech world he lives in, you can make your own rules. Out maneuvering and out marketing your opponent works. Those techniques guarantee a losing campaign in the NHL world or almost any other franchise based industry. Just because you can afford the franchise fee to acquire a Tim Horton’s store, doesn’t mean they have to grant you one. If they do, Tim’s decides where that store will be and how it will look. If you don’t like those rules you don’t have to apply for a franchise.

The NHL is no different. In effect this is a private club and its members have decided what the rules, procedures and protocol will be. If Jim Balsillie wants to be a franchisee he must go by their rules. I use the word “their” intentionally. Some believe this is a personal battle between Balsillie and Garry Bettman. Bettman is the commissioner but it’s the governors (owners) who decide what the rules are. In fact Bettman doesn’t even get a vote when it comes to ownership purchase or transfer. He is fighting the fight the owners want.

Why would an owner like Toronto arbitrarily give up a piece of the region they legally own and control just because Jim Balsillie doesn’t think it’s fair that they control it?

I don’t think it’s fair that the Shriners jam all those clowns into one car, but if that’s they way they operate what right do I have to challenge it. The Shriners have a private organization with their own rules and bylaws for their members and all the individual units which make up their organization. They are allowed to by law and I have no right to challenge it.

Jim Balsillie is now organizing a rally to keep the dream alive of buying and moving Phoenix to Hamilton. He is great at tech and marketing just lousy at reality.

When Jim Balsillie understands he has to go through all the laid out channels to acquire a team, the sooner his relationship will get better and maybe one day to the point where he would be accepted as a prospective owner. Right now he’s just that annoying freshman who keeps knocking on the door of the frat house party. He doesn’t know the password, but thinks that more knocking will do the trick.

Learn the rules and you’ll need less useless knocking.

See you at the rink.


Anonymous said...

You are missing the point, Dean.

The NHL IS different from a Tim Hortons. If you don't like working at Timmy's you can walk across the street and get a job or be served by a Dunken Donuts - or wherever.

In the NHL if you are a player and don't like the NHL you can go work for...the KHL ? The NHL is very much a monopoly and that changes all the rules. Further, what if Timmy's said 'we know we are the only donuts place around, but we are granting 'Territorial rights to the Ottawa area' to our franchise in Toronto.

In the US that is acting like a cartel and the NHL is traveling in very dangerous waters at the moment.

The difference is that Balsillie has nothing to lose at this point, while the NHL has already taken a public beating over the lies Gary Bettman (bet-man, Vegas here I come) has told. The NHL has plenty more they can lose here.

Exposing the state of the Coyotes has probably hurt Franchise values and it's hard to see anyone other than the NHL continuing to fund a team in Phoenix. Does anyone seriously doubt the team will be moving ?

The NHL can even win this fight, keep the team in Phoenix, or in KC or whatever hole they find.

It's clear Balsillie will try this again, it looks like there will be more southern teams available in the near future.
You would think that the NHL would make the smart play and get Balsillie on board somehow.

But Ì guess the NHL doesn't like him. You can see why, it`s unlikely he would fit in with the rigorous financial & ethical process that people like Charles Wang (CA) and `Boots` Bataglia are able to pass.

Again, Balsillie only has to win one of these battles, whereas the NHL has to win every time. Why not just invite him into the tent

Anonymous said...

You actually just made dean's point for him. The NHL is not a monopoly because there ARE leagues like the KHL alond with pro leagues in Switzerland, Sweden, Finland, Germany, Austria, France, Britian, Japan and others. Guess what. All those leagues have rules and prodecures for both players and owners just like the NHL. Any player who dosent want to work in the NHL dosent have to. They go work in many other leagues. It is their choice thus it is not a monopoly. When the WHA folded that took away any top flight North American competition from the NHL but its not the NHL's fault that nobody else competes with them on this continent. Again that dosent qualify as a monopoly.

I think the NHL probably wants a guy like Balsillie as an owner, but he has to go through all the steps that everyone else has to go through.

Lets use Tim Hortons again. Can I open a store and call it Tim Hortons just because I want to? No because the brand and the business model has been trademarked. The NHL is no different. If you want an NHL franchise you have to go through the NHL to get one and they have a long standing process. I dont see whats wrong or illegal about that.

Anonymous said...

I think Balsillie will get a franchise. The NHL just wants him to pay a $300M expansion fee if he wants to operate it in Southern Ontario.

If he wants to operate a franchise in the US, he can buy an existing team as long as he doesn't move it.

The NHL is not saying that Jim cannot have a hockey team. They are saying that he cannot put a hockey team wherever he wants.

A Southern Ontario team will be a licence to print money. The NHL wants a potential new franchisee to compensate them for that privilege.

That being said, I don't think that the NHL is ready to expand yet. So, if Balsillie wants a team now, he has to operate it in an existing market.

Anonymous said...


Anonymous said...

About 'Bettman not having a vote'..He doesn't need one with all the shady backroom deals that helped out the Anschutz' and Leipolds of the league. He has cornered the market on Governors votes because of the shenanigans that have gone on the last 10-12 years. They will do what he says, and right now that is a firm resounding NO to Rim Jim. It IS personal.

Hello Kansas City!!

PS. The crux of it all, Balsillie or not, is why would the League accept 212.5 million that is split 0 ways between all the owners, when the soft, fertile Southern Ontario ground can be harvested expansion-wise for about 600 million split 30 ways?

Rob said...

The franchise comparison doesn't hold water, here's a an american franchise law firm. Explanations lie within.

- the coyotes are currently in bankruptcy protection, according to US law, they are now to be sold to to the highest bidder as the court has sole responsibility to the creditors.

- the league has already approved Balsillie (unanimously) in the past as an owner. If they reject him, they are walking dangerously close to collusion.

- for a closer look, the closest you'll see in US case law would be the Cleveland browns/Baltimore Ravens case.

- My favourite, the Milwaukee Brewers: only difference is that the league approved him buying that team out of bankruptcy and moving it to the home of crappy beer.

- The concept of a designated region is illegal and is going to bring out anti-trust lawsuits eventually. It may not be from Balsillie (though he's shown he's ready to do just that) but it will come. The NHL bi-laws prevent that true, but the private club analogy does not hold up. Private clubs such as the masons (shriners are masons) are not involved with the world of business.
The NHL can set its laws and despite the fact they've never been challeneged and they run their league the way they want to, when you get into anti-trust legislation there is no special clause for sports franchises.

Now, it would probably be easier for Balsillie just to be nice however he's very aware of what the law is. If you look at the last court ruling, it wasn't really siding with the NHL, it was just saying things had not been given enough time. The Sabres/Leafs propriety zones won't stand up to a court challenge, there's nothing in law that gives them that right. Sports are a unique breed, but there are no legal exceptions when it comes to the business aspect of it all.

Anonymous said...

The court is responsible only to get the best deal for the creditors, but the NHL is under no obligation to recognize any new owner if it chooses not to. The NHL can not be forced to schedule games with this team, include the new owner in any league meetings or in any way recognize their ownership of said franchise if they choose not to.

The NHL has previously accepted Balsillie as an ownership candidate. These designations are on a case by case basis. Just because he was recognized and approved in the Nashville and Pittsburgh scenario's dosent mean he is automatically approved in this Phoenix case if he dosent go through the channels the NHL wants him too. This is not like a pre-approved mortgage. Each application and approval are new and seperate from others previous.

The concept of designated regions is in fact not illegal in a franchise business which the NHL is. The league has a right to dictate geographic, sales and marketing regions for each franchise as set out in the standard ownership and franchise agreement with the NHL. It is true there is no special clause for sports franchises because they dont need a special clause. They are a franchise business just like independatly owned chain stores. The anti-trust laws you are trying to interpret do not apply to this industry.

A law degree is a horrible thing to waste.

Anonymous said...

Well said Anon 8:33 and couldn't agree more with Dean.

Just follow the rules Jim. Stop being a maverick and independent go-on-your-own and work within the NHL rules and bylaws.

No one care if you have 10 billion in your pocket, it's the NHL's rules. Follow them or stay empty-handed.

Alain said...

They should give him his franchise. At least, he would have the money to have one. Look at the clowns in Tampa! Seriously, before writing this rediculous blog, mention that some of the boards desicions don't make sense from the dollar standpoint.