Go to the Globe and Mail homepage

Jump to main navigationJump to main content

BlackBerry billionaire Jim Balsillie arrives at the U.S. Federal Bankruptcy Court in Phoenix on Thursday. (JOSHUA LOTT/Joshua Lott/Reuters)
BlackBerry billionaire Jim Balsillie arrives at the U.S. Federal Bankruptcy Court in Phoenix on Thursday. (JOSHUA LOTT/Joshua Lott/Reuters)

Lawyers expected to grill Bettman Add to ...

Judge Baum will not rule on Moyes's status until after the sale, but he told Milmoe that if Moyes wins the decision, it would mean a lot less money would be available for the other creditors.

The first witness of the day was former CFL commissioner Tom Wright, who wrote Balsillie's relocation application to the NHL. Shep Goldfein, one of the NHL's lawyers, tried to take issue with Wright's assertion that the Coyotes would never be successful in Glendale. He tried to get Wright to admit that if the Coyotes, who have missed the NHL playoffs for six consecutive seasons, were a consistent winner on the ice, they would be successful financially.

Wright replied that any team that relied on making the playoffs and winning the Stanley Cup every year was not using a sound business plan.

"So teams with losing records can make money?" Goldfein said.

"Given the city I live in, I can state that with confidence," said Wright, who lives in Toronto, home of the Maple Leafs.

Wright later scored some points when he pointed out a contradiction in the two reports commissioned by the NHL about the Coyotes' financial prospects in Glendale. He said one report said it was possible to make more revenue by marketing Coyotes head coach Wayne Gretzky more aggressively. But a few paragraphs later the same report said one way to save at least $16-million a year was to drop Gretzky's contract, which pays him $8-million annually.

"It didn't pass muster with me," Wright said.

The afternoon was taken up with the NHL and Balsillie's lawyers pounding away at the other side's economic experts.

Zimbalist made a report for Balsillie on the value of an NHL team in Hamilton ($174.9-million) and projected revenues of $83.74-million in the first season, rising to $116.4-million in the sixth season. He also said a reasonable fee for relocation would be no greater than $12.9-million.

Goldfein questioned everything from Zimbalist's methodology to his competence, which resulted in some testy moments between the two. But the most Goldfein could get Zimbalist to admit was that a team could be viable in Glendale but only, Zimbalist insisted, if the city gave it an annual subsidy of at least $15-million.

Franklin Fisher was the first of the NHL's three economics experts, who produced two separate reports on relocation, to testify. He was put on the defensive by Kessler. Kessler tried to get Fisher to admit the Coyotes would be worth more in Hamilton than they ever could be in Phoenix.

After Kessler pointed out that the NHL's other report said a team in Hamilton would be in the top five in the NHL in revenue, Fisher agreed such a team would be successful.

But, he insisted, it "well may be advantageous for the team to move but it's not established that it's appropriate for the league." Later, on redirect, Fisher said leagues need to act as regulators in a sense to prevent teams from moving any time they felt like it. He said a team changing cities may leave a league with long-term problems concerning fan loyalty and its commitment to all cities.

Kessler also took issue with the relocation fees suggested by the NHL reports, which were $101-million and $195-million. He noted that previous relocation fees were $4-million (to the Hartford Whalers in 1997) and $8-million (to the Quebec Nordiques in 1995) and that expansion fees were always the same to all teams no matter where the team was based.

So, Kessler wondered, why would the NHL have wildly different relocation fees for Hamilton. Fisher did not have an immediate answer.

Kessler then clashed with a second NHL expert, Michael Rapkoch, over his numbers. But he got him, like Fisher, to admit a franchise in Hamilton would rank in the top five in the league in revenue.

The NHL's third expert, Daniel Barrett, was the one who originally said the revenue would be in the top five. He projected revenue of $93-million in the first year for a team in Hamilton.

Kessler also spent a lot of time going over with Fisher the issue of whether or not the NHL constitution grants each team a veto over someone moving a team into its home territory, which is a radius of 80 kilometres from the city limits. That was a precursor of an anti-trust argument that the NHL is blocking Balsillie only because it does not want to get into a legal war with the Maple Leafs, who asserted in a letter to the league that they believe they have a veto and are prepared to fight hard to protect it.

Report Typo/Error
Single page

Next story




Most popular videos »

More from The Globe and Mail

Most popular