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May 14, 2009

Balsillie gets Hamilton lease, NHL calls him "illusory" and "duplicitous"

The charges and countercharges have been flying fast and furious in the Phoenix Coyotes bankruptcy case, with the following transpiring just in the last 24 hours:

  • Elected officials in Ontario turned out to be just fine with Coyotes suitor Jim Balsillie's demand for $120 million in public money to renovate Hamilton's hockey arena if he moves the team there. Ontario Premier Dalton McGuinty, a Liberal, asked if he would rule out the use of public funds, replied, "I'm very much in favour of a new hockey team in Ontario"; his deputy premier, George Smitherman, went further, saying, "If we see success in terms of a franchise coming this way, if there are capital needs there, I think the premier's said we'll be open to the conversation." MPP Andrea Horwath, a New Democrat whose riding (that's "district" in Canadian) includes the arena, chimed in that while, "I don't think a blank cheque to a multimillion-dollar corporation is the best way to go, ... I think government should be looking to partner in whatever way we can." Then she talked about the battered steel industry and added, "So anything that can bring some excitement, some hope and some economic stimulation are all positive things -- particularly in an economic downturn." And her fellow New Democrat Paul Miller got special dispensation to wear a "Hockey Night in Hamilton" T-shirt in the Ontario legislature this morning.
  • The Hamilton city council unanimously approved giving Balsillie an option on a 20-year (or maybe 32-year — reports differ) lease on Copps Coliseum, provided he gets the Coyotes. No details on how much rent Balsillie would be paying on the place (if that's even been negotiated yet), but the city council did commit to lobby the province and federal government for renovation funds.
  • Balsillie, awed by the love of his fellow Ontarians, promptly released a statement saying he'd never asked for any public money, notwithstanding yesterday when his spokesman said he did.
  • The NHL, not awed by anyone, issued bankruptcy court papers calling Balsillie's offer to buy the team "illusory, at best, and a sham, at worst" and "a last-ditch effort" to get around league rules, and said that it had taken control of the team from principal owner Jerry Moyes and so Moyes' bankruptcy filing was illegal. And if it wasn't, it was just plain wrong: "Even assuming that Mr. Moyes' conduct was technically permissible, it smacks of bad faith and duplicitous dealing," wrote the league. "The court should not condone such inequitable conduct."
  • Balsillie fired back with a statement of his own asserting: "Who owns or controls the team is a distinction without a difference. The team itself is still bankrupt, voluntarily or not. The owner of the team has a fiduciary obligation towards the creditors."

At this rate, maybe they should forget about playing hockey and just sell tickets to watch the lawyers fight.


Neil, love the site & everything you do, it is extremely interesting to follow. The lease that Jim Balsillie signed with the City of Hamilton is a 20 year lease with 3 options each being 4 years, bring the total lease term potentially up to 32 years. Although it is not stated, it is assumed that the options are at the sole discretion of Balsillie. Also, the lease only becomes valid if he secures a team to play in 'The Hammer' by October 2010, although some in the media are reporting October 2009 which as we all know is not going to happen that quickly.

Posted by Alan on May 14, 2009 09:47 PM

Thanks for the clarification. Did they agree to lease terms, though? I saw that a previous lease (for when Balsillie was trying to buy the Predators, I assume) would have had him paying $2m a year in rent for control of the entire arena, but that's if he was going to pay for all the upgrades.

Posted by Neil on May 14, 2009 09:58 PM

I am shocked that the Libs and NDP are willing to spend PUBLIC money on Copps Coliseum, where are their principles? I thought they were against spending public money on sports facilities? I guess it has something to do with how pathetic Canadian teams have done in the Stanley Cup playoffs, since Montreal last won (Of course, adding more Canadian teams increases the odds that one will finally bring home the Cup to Canada, that could help explain the motivation).

Posted by Januz on May 15, 2009 07:18 AM

I highly doubt that it has anything to do with the Stanley Cup playoffs, i hope that you are just using that to take a shot at Canadian Hockey teams and don't really believe that.

McGuinty is a sycophant. He jumps on things that he knows the public will love and attaches his name to it. He does not have a spine. Your surprised that he has flip flopped? McGuinty, Mr. "I wont rase your taxes", (he then raised taxes), has a history of saying one thing and doing another.

Im completely convinced that no matter what the issue, if most of Ontario thinks its a good idea, McGuinty will jump on it, regardless of his past statements and parties believes. He wants to be re elected so bad he does not care what it takes.

Posted by James on May 15, 2009 10:32 AM

James, I was just adding a little humor to the Hamilton situation (I have a tremendous amount of respect for the History of Hockey including CANADIAN Dynasty's in Montreal and Edmonton. If ANYONE does not appreciate Canada's contribution to Hockey, then they are NOT Hockey fans).
I have read a whole lot about the situation on TSN, and the comments from fans about it, are borderline crazy. Including knocking Canadian Players who choose to live in the States after their careers are over, and accusing them not being "Real Canadians". And one person actually favoring Russian & European Players "Because They Go Back To Their Countries After Their Careers Are Over". Ignoring the fact, that many Canadians return to Canada (Including one man who may be their future PM (Ken Dryden)), and many Europeans stay in North America (Malkin comes to mind. He turned down $15m TAX-FREE to stay in Pittsburgh, do you really think he will ever go back to Russia, except to visit?).
Speaking of Pittsburgh, they may have the model that will bring a Cup back to Canada. They bring in guys who really want to live in the community (In addition to performing on the ice or field). This has happened with Lemieux and is happening with Rothlisberger, Crosby and Malkin. Draft and trade for guys from Quebec, Alberta, & Manitoba who have the love of Canada and the grit necessary to win.

Posted by Januz on May 15, 2009 05:41 PM

Ya know, this all happened because Richard Burke (ex Coyotes owner) foolishly got a lease at US Airways Center without realizing the sightlines for hockey were dreadful, then Ellman and Moyes back a second arena in the market (where there is already a couple of retractable roofed stadia as well) and no one bothers to look and see if the fans are really demanding an NHL team or not. Then again, we wouldn't be having all this silliness if the Good Lord had put the city of Hamilton 81 km away from Toronto... (/sarcasm).

Posted by Marry on May 16, 2009 12:17 AM

Can anyone tell me exactly how much money Ottawa and Toronto provide to the province and their cities (the economic impact) tax wise etc..Let's say the feds and the province provide $150 million to upgrade Copps (instead of spending twice that amount to build a whole new arena!)..if the team was successful in Hamilton, how much money would be paid back in tax alone. I just seen a book that states in Alberta players pay a NHL players tax of 12.5% which on a 40 mill payroll which would be 5 million a year. Also if the Coyotes are really losing 25-30 million per year, how could they ever make money?. If you added 4000 per game at an ave of $40 per game x41..that only equals $6.5 million...they would still lose 20 million or so...can't Bettman figure this out?..With Hamilton giving control of Copps, Hamilton Place and the Convention center...Hamilton will see a cost savings of 2 million per year running it which saves tax payers. With Basillie's connections as long as more private boxes are added they will be's a no-brainer..too bad Bettman can't do math.

Posted by brian on May 16, 2009 02:31 AM

...correction...the tax they collect would be on the games they played in more like 2.5 million each for Calgary & Edmonton

Posted by brian on May 16, 2009 02:40 AM

The NHL players tax is pretty much the entirety of the benefits to the province — just about all the other spending that would take place would be diverted from elsewhere in Ontario. (I suppose there would be some Sabres fans who would drive over for games in Hamilton, but that's a drop in the bucket.) You could actually make a better case for Hamilton to put city money in — since it could divert spending from the surrounding area to the city — than to use provincial or federal money.

In general, the rule for entertainment spending is that the larger the circle you draw, the more it's a zero-sum game.

Posted by Neil on May 16, 2009 02:41 PM

Thanks for that. It is really hard to tell the true economic impact to Hamilton and a NHL team wouldn't have that much but it all depends on other things happening. If they get the Pan-Am games in 2015 Hamilton would be getting a new football stadium a few blocks north of where Copps is (by the west harbourfront which would be quite suprising to people outside of Hamilton who only think of steel companies. The stadium would be for the Ticats but would probably attract a soccer team as well. Even if it wasnt the Major soccer league maybe the one the Montreal Impact plays in..united something. Hamilton is also close to getting Light rail transit to run through the city and the Go station isn't too far from Copps as well. Mcmaster inovation park is also going to be finished next year just west of downtown and will be home to 100's of scientists and research and will end up having 3000 jobs there and 500 scientists at a research insitute beside Hamilton General. and I'm sure Basillie knows all this and his idea is one piece of the puzzle. The biggest employer in Hamilton is Health Care, not's slowy dying off.

Posted by brian on May 17, 2009 12:46 PM

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