Thanks to James Mirtle for pointing out the statement filed by NHL Deputy Commissioner Bill Daly (full text here), which goes into some detail about the July 29 Board of Governors interview with (and subsequent rejection of) Jim Balsillie and his application to purchase the Phoenix Coyotes.
Attached to the end of Daly's brief is a statement which former Nashville Predators owner Craig Leipold read to the Executive Committee before their interview with Balsillie. In it, he outlines previously unreported attempts back in 2005 (well before there was any discussion of selling the team) by Richard Rodier, Balsillie's legal representative, to stir up discord between the Predators and the City of Nashville, and Rodier's frank suggestions on how to relocate the team to Hamilton, Ontario by any means necessary.
If you Predators fans needed to get your blood boiling, take a look at some of these excerpts after the jump...
Before we get to Leipold's statement, there's this from Daly's review of the interview process. Craig Leipold grills Balsillie over the "Hamilton Predators" fiasco (all emphasis below is mine):
Mr. Leipold and others also questioned Mr. Balsillie at length regarding his actions
in 2007, which appeared to have been taken with the purpose and effect of destabilizing the
Predators franchise in Nashville. Issues that were discussed included the facts that in June 2007:
without the consent of Mr. Leipold and against the express direction of Commissioner Bettman, Mr.
Balsillie began soliciting "Hamilton Predators" ticket orders in Hamilton, Ontario using the
Predators' intellectual property; Mr. Balsillie had publicly announced lease negotiations with the
arena in Hamilton; and he had submitted a "conditional relocation application" to the League. Mr.
Leipold, Mr. Gillett, Mr. Ed Snider, Mr. Ted Leonsis and I all questioned Mr. Balsillie about his
conduct relating to these activities and his answers were wholly unsatisfactory. Mr. Balsillie
actually suggested that his unauthorized activities somehow "helped" Mr. Leipold by leading to a
resurgence of interest in the team in Nashville.
Wow, what a steaming piece of tripe that is. Far from being apologetic over his misappropriation of the Predators logo to drum up interest in Hamilton, Balsillie acts like he did Leipold and Nashville a favor.
The real meat, however, is the statement that Leipold read to the Executive Committee prior to the Balsillie interview, which starts with:
To be blunt, I plan on voting against Jim as a potential owner, and it has nothing to do with the Phoenix Coyotes or Jim's desire to move an NHL franchise to Hamilton, Ontario. Rather, I simply don't trust Jim, and don't believe he would be a good partner in the NHL or owner of an NHL franchise.
The bombshell comes when Leipold alleges that Balsillie, through his legal representative Richard Rodier, attempted to devalue the Predators back in 2005, well before the sale process began:
A. On February 23, 2005, February 25, 2005, and March 7, 2005 (which is prior to any contact betwen Mr. Balsillie and me regarding the Predators), Richard Rodier, the attorney for Mr. Balsillie, contacted the Director of Finance for Nashville inquiring about the terms of the lease between the Predators and Nashville and the Predators compliance with the lease. I have copies of these emails, and it is my understanding that Mr. Rodier also had telephone conversations with the Director of Finance and, potentially, other members of the Nashville administration. Specifically, Mr. Rodier inquired as to whether the Predators had met the net worth requirements of the lease, and suggested to the Finance Director that the Predators could be in default of their lease due to the unclear language in the lease regarding a net worth provision.
B. Prior to Rodier, The City of Nashville had never inquired about the Predators net worth or the requirements.
C. On March 9, (two days after his last e-mail) Mr. Rodier forwarded me a letter introducing himself and inquiring about purchasing the Predators.
D. Over the next 10 days, three articles in the Toronto Globe and Mail regarding the financial difficulties of the Predators. These articles were printed on March 10 (the day after Mr. Rodier approached me), March 16, and March 18. The March 18 article specifically referenced the fact that the Predators might not meet the net worth requirement under their existing lease with the City of Nashville. I should not that I have learned from subsequent conversations with Nashville officials that they never disclosed to Mr. Rodier that the Predators did not meet the net worth requirement. In fact, the city had absolutely no documentation regarding the Predators net worth, nor had they even requested this information prior to Rodier's requests.
E. Beginning in May of 2005, (and only after the Nashville Media became aware of the Globe and Mail articles) the Nashville administration began to publicly question whether the Predators were in compliance with the terms of the lease, because of our refusal to turn over confidential financial records. Unfortunately, the Nashville administration took an extreme position and argued that only physical assets (hockey pucks) could be used in calculating net worth under the terms of the lease. We believe this was the position being espoused by Rodier. For the next two years, our lawyers had to argue with the administration whether we were in breach or not, and the Nashville administration used this alleged breach to withhold large sums of money from the Predators and the arena manager.
F. To summarize, the City of Nashville had never raised the net worth requirements of the lease with me or the Predators for 8 years, until Mr. Rodier brought the provision to their attention. Mr. Rodier contacted Nashville officials prior to contacting me regarding the potential sale of the team. From the point Mr. Rodier e-mailed the city's Director of Financial and the subsequent public media attention from the Globe and Mail, our relationship with the city deteriorated greatly because the city was emboldened to argue that we were in breach of the lease. The episode ultimately cost the team thousands and thousands of dollars in legal fees and made the sale of the Predators far more difficult.
G. I only learned of Mr. Rodier's emails with the City Finance Director after I broke off negotiations with Mr. Balsillie in the summer of 2007, at which time certain administration officials advised me of the Rodier emails and inquiries of 2005.
Well, at least we know where all those reports were getting their information from. I can't imagine why other owners wouldn't want Balsillie in their club, can you? Actively stirring up trouble to devalue a franchise in order to buy it more cheaply and break their arena lease is hardly the way to earn your way into the NHL's good graces.
Check out this other nastiness from Leipold's negotiations with Balsillie during 2007:
B. The first Term Sheet we received from Rodier required that the Predators relocate to Southern Ontario at the end of the next season and that I be responsible for acquiring an "NHL Relocation Consent." For the next several months, we argued back and forth, but I always refused to guarantee relocation because of the terms of my Nashville lease and the NHL Constitution and Bylaws.
D. Then on May 15 after meeting with Gary in New York, I met with Balsillie and Rodier in Balsillie's offices (with my attorney taking notes over the telephone). In this meeting, I made it abundantly clear, on numerous occasions, that Mr. Balsillie was buying the Predators "Where Is, As Is" and that there would be no discussions of relocating the Predators until after his acquisition and until it became clear that he was buying the Nashville Predators and would be required to attempt to make the franchise work in Nashville. He also made it clear that he understood that he would be accepting any and all risk that he could not relocate the franchise.
E. After that meeting, we executed the Term Sheet. The Term Sheet clearly stated that the Sellers could unilaterally make the Term Sheet binding and that Balsillie would be required to put $10,000,000 in escrow as a break-up fee.
F. On May 24, we exercised the option to make the Term Sheet binding and force Balsillie to put $10,000,000 in escrow. We then publicly announced the potential sale to Mr. Balsillie at a press conference in Nashville
G. From that point forward, Balsillie never abided by the terms we had negotiated in the Term Sheet:
- He refused to make the Term Sheet binding;
- He refused to put $10,000,000 in escrow;
- He forwarded a Purchase Agreement, which was not in keeping with the Term Sheet and shifted all risk back to me regarding the Nashville lease or the failure to relocate;
- In Balsillie's presence, Rodier advised that the Predators should sue the City of Nashville for "bad faith" to create the color of litigation prior to closing.
- In Balsilile's presence, Rodier advised that after the June 30 closing, Balsillie would move the franchise in the dead of night using the litigation as cover;
Simply put, Rodier appears to be a loose cannon, willing to use whatever dirty tactics are at hand to serve his master's purpose of moving a hockey team to Hamilton. Perhaps I was too easy on him when I first dubbed him "The Mouth of Balsillie".