So Leipold set about trying to make both the offer and Balsillie acceptable to the NHL—if Balsillie was able to relocate the team after the deal closed, so much the better. For a while, Leipold seemed to be succeeding. By May 1, he says in documents filed in the Phoenix court, he’d persuaded Rodier to drop the demand to have relocation as part of the deal before closing; 11 days later, the Balsillie camp agreed to a new term sheet requiring them to sign the league’s dreaded seven-year non-relocation clause and to put $10 million in escrow as a non-refundable deposit.
Then, without warning, Balsillie changed his mind, and Leipold is still not entirely clear why. Balsillie has since said he feared what would happen if the city failed to reach the 14,000-ticket mark and the team found itself without an arena lease. “Before I wrote this $220-million cheque—and that’s a big cheque—I needed to know,” he said in his deposition. He also deemed the new terms to be last-minute changes all too reminiscent of his experience in Pittsburgh, according to Leipold, and was especially offended by the escrow demand (a spokesman for Balsillie said he was unavailable for comment).
The better question, however, is why the RIM CEO agreed to the terms to begin with. Because at this point Balsillie seemed to snap, turning to tactics that were clearly designed to inflict maximum embarrassment on the NHL. On May 24, he left Leipold sitting alone at a press conference in Nashville to announce the sale of the Predators, while Balsillie’s legal team set about rewriting the agreement on their own. The next day, Leipold received a revised purchase agreement from Balsillie’s lawyers transferring all financial risk back to the American businessman if the team wasn’t allowed to relocate. And that was just the beginning. One week later, at a meeting in Waterloo that Balsillie attended, Rodier began issuing veiled threats, Leipold alleges, suggesting the Predators’ owner would soon find himself answering to the Canadian Competition Bureau should he refuse to close the deal on Balsillie’s terms.
At the same meeting, Leipold testified, Rodier suggested that Leipold should sue the City of Nashville for bad-faith negotiating over their lease. Under the cover of this litigation, said Leipold, the Balsillie team could “bring in trucks in the dead of night and move [the Predators] out of town.” (Reached by phone this week, Rodier refused to comment on Leipold’s allegations, saying only that he addressed the claims in his own deposition; however, that portion of his testimony is not available in the public court file.) The competition bureau did open an investigation that fall, calling Leipold to testify before concluding the league had not engaged in anti-competitive activity.
The Balsillie camp’s most provocative move was yet to come. On June 14, the team began selling reservations for season tickets to fans in Hamilton, surpassing the Predators’ 9,000-subscriber base in Nashville within 12 hours. Balsillie has said he did so to demonstrate support for the team. It now seems more an attempt to inflict damage on the Predators. Leipold revealed in his deposition that he had personally called Balsillie four days earlier to tell him the deal was off. So why sell the tickets if not to scare off fans in Nashville? “He didn’t have an application pending to relocate,” Bettman fumed during his own deposition in August. “He didn’t even have a valid contract to buy the franchise. What he did here was completely out of line.”
Against this backdrop, it is hard to view Balsillie’s recent attempt to gain control of the Phoenix Coyotes as anything less than a frontal attack—an opportunity to put the NHL on the public hot seat for a change. But the process has laid bare the worst of Balsillie’s machinations, too. In Pittsburgh, he refused to put his signature where his mouth was. In Nashville, he used methods that seemed at best irrational, at worst underhanded. By the winter of 2009, when Balsillie first set his sights on the cash-starved Coyotes, even he realized there was only one real option left: getting a court to do what the NHL won’t. “I spent five years looking for a front door,” he told reporters in May. “I found a side door.”
Or is he hell-bent on blowing up the entire building? In April, Balsillie struck a secret deal with Coyotes owner Jerry Moyes, who agreed to file for bankruptcy and then sell the team to Balsillie for US$212.5 million—on the sole condition that the club be moved to Hamilton. As part of the pact, Moyes launched an anti-trust lawsuit against the league, claiming the NHL was an “illegal cartel” and that the Toronto Maple Leafs have conspired to preserve “market power” in the GTA. If the other owners didn’t despise Balsillie already, they certainly do now. “You’re trying to join a group, and you don’t join that group by making their life miserable,” says Gabe Feldman, a sports law professor at Tulane University. “Balsillie has more than shot himself in the foot. He shot his entire leg off.”
At least his intentions are clear this time around: Balsillie will buy the team only if he can move it north of the border. But after all he’s said and done, transparency may not be enough. Redfield T. Baum, the judge overseeing the Coyotes bankruptcy, has repeatedly voiced reluctance to force a new partner on an unwilling sports league—much less the relocation of one of its franchises. Meantime, the owners have every reason to doubt Balsillie. Why did he lead the owners in Pittsburgh and Nashville to think he was willing to purchase and try operating their teams where they were? Why did he turn to bully tactics against Leipold when he didn’t get his way? For NHL owners, it all comes down to the issue of trust. “We have just a tremendous amount of experience with Mr. Balsillie, and it hasn’t been good,” said Boston Bruins owner Jeremy Jacobs, testifying at his own deposition this summer. “His memory was very selective in how he construed things. He just wasn’t somebody that we felt was really truthful and acceptable as a future partner.”
A written declaration filed last month by the league is even more blunt: “There is something sad about Mr. Balsillie’s inability to grasp the plain fact that it is his conduct, insensitivity, perceived lack of trustworthiness and unwillingness to accept responsibility for his own actions over several years that has caused the NHL Board of Governors to wish to not be associated with him in the business of professional hockey.”
Such harsh words likely won’t be enough to scare away Jim Balsillie. He is committed to his dream, and consumed by the desire to best the NHL once and for all. So consumed, in fact, that he’s blinded to a paradox the rest of the world can see: the greater the lengths he goes to reach his prize, the further away it gets.
