August 2, 2007

BETTMAN, LEAFS WIN MACHIAVELLIAN BATTLE WITH BALSILLIE

      There is one main reason why Gary Bettman has remained as commissioner of the National Hockey League for so long.  He can, apparently, convince seemingly powerful men to make decisions that at one point seemed highly improbable—in essence Bettman can sell ice to an Eskimo.  How else to explain the major league flip-flop (Kobe Bryant would be proud) that outgoing Nashville Predator owner Craig Leipold pulled off by announcing a letter of intent to sell to a local business group while denouncing aggressive purchaser Jim Balsillie at the same time.

       Leipold announced this week that he was signing a letter of intent to sell to a Nashville group of businessmen whose intentions were to keep the financially feeble franchise in Music City.  While congratulating himself and the local business group on the deal Leipold also took a hammer to Balsillie’s blackberry in an attempt to crush the Canadian businessman’s hopes of ever owning an NHL hockey team.  But when Leipold spoke you could actually make out Bettman’s lips moving—as if Leipold had been placed in a tiny perfect commissioner trance.

       Before I go forward into the hypocrisy of this week’s activities I will backtrack to fill out the story.

       As I reported in an article dated July 13 Bettman had deals in place with David Anschutz that if any team moved it would be placed in Kansas City.  Bettman also had a deal in place with Toronto to ensure that the vast Southern Ontario marketplace remains the sole custody of the Maple Leafs.   Further to these deals is Bettman’s original intention to strengthen the US market and place as many teams as possible south of the border to hopefully grow the game within each region.  For Bettman another team in Southern Ontario would defeat his plan, and crush his side deals.  As such Bettman needed to be as involved with these negotiations as he was last year when he effectively loaded up the negotiation process with codicils and forced Balsillie to back away from purchasing the Pittsburgh Penguins.  This time Bettman order Leipold to back away. 

      "We were advised by Mr. Leipold that the commissioner had found out about the existence of the negotiations and ordered him to immediately cease any further communications with us," Balsillie's legal representative, Richard Rodier, told ESPN.com.  This became the first of many correspondences from Bettman to Leipold that were eventually termed the “cease and desist” orders. 

       Rodier, Balsillie’s legal representative, to publicly prove that the commissioner was creating barricades and attempting to poison the negotiations, turned over e-mails between himself and Leipold to ESPN.   In one e-mail, dated May 4, Leipold wrote, I would say that the cease and desist order is still in play.”

       It is common knowledge that Balsillie wants an NHL franchise, and he wants one in Southern Ontario—specifically Hamilton.   The issue becomes--is Bettman doing what is best for Bettman, or is he doing what is best for the NHL?   In the ESPN articles following the publicizing of these e-mails it was reported that many players believed Hamilton would house an incredibly successful franchise, and that league governors and GM’s, including Wayne Gretzky, believed that Hamilton would be a “sure fire success”. 

       The numbers prove such a fact.  Canada is home to one-fifth of the 30 NHL teams, but generates one-third of the league’s revenues.  There is no reason to think that Hamilton wouldn’t continue that trend. 

       Bettman was able to hold up the negotiations between Leipold and Balsillie, even though a letter of intent to sell was signed by both parties.  In his press conference this week Leipold lambasted both Balsillie and Rodier…”Jim Balsillie went his own direction with a rogue lawyer who had no intention of honouring the process of being an NHL owner.  Obviously, we didn’t go forward, so we began the process to find a new owner.” 

      What a load of crap.  Leipold originally couldn’t sign the letter on intent to sell to Balsillie fast enough.  As the e-mails indicate Leipold was simply waiting for Bettman to sign off on the deal so he could collect his $230 million.  There is no logical reason why Leipold, who flies in from out of town for the games and is not a Nashville resident, would suddenly stiff, and then insult, Balsillie.  Unless, or course, Bettman convinced Leipold that Balsillie would never receive approval from the NHL governors.  The reason—Balsillie’s brash behaviour and the Canadian businessman’s lack of interest in following proper NHL procedures. 

      The problem with not allowing Balsillie to have a fair shot at the Predators was that Leipold was stuck with two sub-par offers from groups representing Boots Del Biaggio, whose desire was to put a team in the brand new arena in Kansas City (he was part of Anschutz’ consortium), and a local group of Nashville businessmen who couldn’t hope to put together enough capital to make a proper bid.  Enter Bettman again.  Somehow the commissioner convinced Del Biaggio that his best option was to join the Nashville group and become a minority owner—for the time being—which would create enough capital for the locals to produce a quality offer. 

       Leipold insisted that Balsillie ruined the deal between the two parties by trying to move the team to Canada before the deal was finalized.  (crap)  However, if Balsillie was going to convince the NHL governors that Hamilton was an attractive location he needed to do exactly that.  NHL bylaws require that owners have an arena deal in place and proof that the club can be successful in the new market before relocation is approved.  As such Balsillie would have told Leipold of this plan before using the Predator logo to accomplish his goal.  Leipold seems to have conveniently forgot about this as well as most of the other discussions that took place between the two groups.

      So, in the end, Bettman gets his way—he keeps his deal with the Leafs, he keeps his deal with Anschutz (no team is moving, yet) and now he has another deal in place with Del Biaggia.   One wonders if all this dealing will one day come back to haunt the commissioner.   

      If the NHL governors are insistent that they want successful franchises, and if the Nashville consortium fails to turn the Predators around financially, then it is possible that they could blame Bettman for making such a short-sighted and self-serving deal.  And if the supposed financial benefits gained from the lockout continue to fail, well…maybe in a couple of years Bettman will find himself in the same unemployment line as Ted Saskind. 

      I wonder what kind of a deal he could strike at that point.

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