Saturday, May 23, 2009 Why the outcome of the Coyotes case is about more than hockey

What if a franchise in any professional sport could just move without the league rules stopping them?
Dan Weiss of KTAR asks the broader question of the bankruptcy proceedings involving the Phoenix Coyotes.

Tuesday, a bankruptcy judge in downtown Phoenix began listening to arguments that may ultimately determine the fate of the Phoenix Coyotes in the Valley of the Sun. As evidenced by the scant gathering at Saturday's "Save the Coyotes" rally (Winnipeg by the way had 36,000 people show up for their "Save the Jets" rally before they eventually moved to Phoenix!) and the general apathy expressed towards our local NHL entry over the last few years, it appears that few heads will turn whether the Coyotes stay or go.

This is an interesting point, but fan interest is such a minor component in owner interest in staying in a given market, but his point is well taken. Some markets are just not interested in a given business, to the degree that the business has failed.

Weiss goes on to the broader point facing major league sports:
But there's a bigger issue in play that transcends the Coyotes, Jerry Moyes, Jim Balsille, Phoenix, or Southern Ontario, and that's whether a bankruptcy court has the right to tell a professional sports league that its governing laws are flawed regarding the processes and procedures as to who can purchase a franchise and whether it can be relocated. Is there any wonder why the commissioners of the other three major leagues, the NFL, the NBA, and Major League Baseball, all came out in overwhelming support of the National Hockey League Monday? It's not because they like Gary Bettman or think he's doing a bang-up job of growing the game in the United States. It's because should Judge Redfield T. Baum eventually award the Coyotes to Mr. Balsille and allow him to circumvent the NHL's by-laws regarding ownership and franchise relocation and move them to Hamilton, he would essentially be granting a possible "get out of jail free" card to every professional sports owner in North America who is unhappy in their current situation. Ultimately, that could have the potential to create a virtual anarchy across the sporting landscape by individual ownership against their respective leagues.

Imagine being trapped in making a franchise work in a city where it clearly is not. Now you have two things stopping you, Bob Johnson, from relocating; your leases, and your league rules.
By-laws be damned, I'm moving to Southern Ontario (or Kansas City, Seattle, San Jose, Vancouver)?
Well, yes, that is a possible outcome. As Mr. Weiss points out, 15 NBA teams borrowed money for operations this year. How many of them would sell and move if they could?
What does the sudden lack of scarcity do to a product?

The fact is that no matter how this case pans out the NBA and the City of Seattle have both advised us that scarcity is not what it was. So, Bob Johnson putting his Bobcats up for sale in the worst economy in decades "wants between $325 million and $350 million".

$350 million? Not in a million years.
If any owner of a sports franchise can move without the league say-so then more teams are free to move. More teams being able to move increases the lack of scarcity, driving its price down. Sure, Clay Bennett had a point that there are only 30 NBA franchises, but being able to fold up your tent and move at any time your lease allows increases risk to the community, and lowers the value. Another team will show up in a couple years in a top 15 media market.

Read Dan Weiss' full story here!
Have a great day,
Mike Baker
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Peter said...

from SC:
"There are also rumors of a potential Bellevue building that have percolated a little bit."

does anyone know anything about these rumors? if they are true it could be great for us.

Mr Baker said...

I have not heard anything, though you should expect that to be discussed.
The single option, plan "A", KeyArena could be the only thing discussed while the legislature was in session.

Once that failed, and a remote chance of a special session hangs out there in September, you should expect other options to get put back into the discussion.
Go back to when Bennett was pretending to look for an arena site, add in a Sound Transit train going from Seattle through Bellevue and an eastside arena looks like a better idea.
Let's speculate:
This is the difference between Bellevue and Seattle, Seattle does not see a value in this, Bellevue is thinking about spending $500 million on a tunnel.
What if they spend the money on a destination for the train above ground, like an arena?

I think Sabey's land in South Seattle becomes an option, Auburn, all those other site except Renton because they kept developing the Landing site.

I think the Bellevue talk is partly "what if" speculation, and partl putting pressure on Seattle city and its state representitives to come up with a KeyArena solution, or get out of the way of any other solution.
Other solutions would be the death of KeyArena.

I am sure the B2 folks will surface again, but I am not sure who needs them for any of this.

The pressure will build until September and break for KeyArena or against it.

Peter said...

back when ballmer first got in, i remember reading an article in the times saying there were three potential ownership groups in the area, and only one was working with the city. i think is was ron sims and pete von reichbauer(sp) that said that in the article. could the bellevue rumor be one of those groups? it seems like if there was other potential ownership groups out there, they would keep a very low profile until they find out what ballmer does. just my thoughts.

Peter said...

personally, i would prefer to wait a few extra years and get an new arena. if there are other solutions out there, i think we should give them time to succeed. if keyarena fails this year, and another solution materialized, we should let keyarena die if we can't get a return team swiftly. a new arena would probably mean the NHL, too, which would also open up many more possibilities for the area.(NCAA Tournament, ETC.) The only problem would be the sonics name/history. i'm not sure what to think about that, but i agree with something i heard on SC earlier. that if we built a new arena and got a new team, bennett and the league would be under tremoundous pressure to just give the name/shared history up.