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NHL Anti-Thread: Bad Business Decision Aggregator


the admiral

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A legal-affairs expert for a Phoenix news radio station initially said Glendale had no chance of winning their case. Now she's walkin' back so nice that I can hear "Billie Jean" playing:

http://ktar.com/305/1843535/Legally-Speaking-We-finally-know-why-Glendale-canceled-the-Arizona-Coyotes-lease

FINALLY! We finally have the basis of the city of Glendale's argument as to why it is canceling the arena lease agreement with the Arizona Coyotes.

According to what it provided in a Wednesday motion, Glendale's position appears much stronger and more legitimate than it did earlier this week.

Glendale filed a motion to modify the team's restraining order to ask permission from the Superior Court to not hand over the payment of $3.75 million that is due in two weeks' time to the Coyotes.

The Professional Management Services and Arena Lease Agreement between the city of Glendale and the owners of the Coyotes requires the city pay $15 million per year in quarterly payments of $3.75 million to the organization. The next payment under that agreement is due on July 1.

The court issued the temporary restraining order on July 12, 2015 requiring, in part, "the city of Glendale to continue to perform and comply with all of the city's obligations under the agreement."

This meant the city would be required to make the payment; however, the city does not want to. It wants the court to relieve it of this requirement, or alternatively, allow the city to place the payment into an escrow account to keep it safe. If the court isn't willing to do that, as a last request, the city is requesting the bond (required to be paid by the Coyotes) be increased by $3.75 million to protect the city (if the city wins it wants to be able to get that money back and if it's handed to the Coyotes it may never recover it.)

Glendale's position is that it does not have to make this payment at all, and, in fact, can recoup all payments previously made to the Coyotes under the agreement since there was a violation of Arizona Revised Statute 38-511 (affectionately called the "Self-Dealing Statute").

Quick background: On June 10, the City Council voted to direct its city attorney to cancel the agreement because Craig Tindall and Julie Frisoni left Glendale and went to work for the Coyotes, thus triggering the remedies under the state law. Glendale argued in its motion that Tindall and Frisoni were "significantly involved in initiating, negotiating, securing, drafting or creating" the agreement on the city's behalf and, since they went to work for the Coyotes within three years, it has the right to cancel the agreement and recover any consideration it has paid under the agreement. Since it has the right to recover any consideration, then it should not have to pay the $3.75 million due on July 1.

In its motion, the city refers to and attaches several email strings between Craig Tindall (who was Glendale's city attorney until April 2013 and then became special counsel) and Anthony LeBlanc from 2010-2013; emails between Tindall and the city of Glendale regarding the Coyotes after Tindall resigned from the city (but still remained an employee of the city under a severance agreement); and emails between Julie Frisoni (who at the time was the communications director and later the assistant city manager of Glendale until April 2015) and the city in June 2013.

The city also explains its belief that:

"It was Tindall's ardent support for the agreement in the face of opposition by the then-city manager, the then-acting city attorney, and the city's outside counsel which is believed to have influenced and helped to secure the city council's approval of the agreement in July 2013."

Remember, according to counsel for the Coyotes, the negotiations for the agreement occurred in June and July of 2013.

The motion further points out Frisoni was employed with the city until April 22, 2015 and while she was the city's assistant city manager she was "significantly involved in securing the agreement's approval, including providing information to city council members in support of the agreement just days before the Council voted on the agreement."

On the Coyotes' defense that the city waived their conflict of interest:

Glendale pointed out in the motion the situation with Tindall and Frisoni is exactly what the law is there to prevent: self-dealing by government employees. It insightfully explains that this "conflict" cannot be waived under the law because to allow a self-dealing employee to waive their own conflict would defeat the entire purpose of the law. Well stated, Glendale.

Yeah no crap you can't waive a conflict of interest with yourself. That's why it's a conflict of interest! The Coyotes are so dumb.

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oh, and

I'm sorry, I'm still in awe of Glendale's erstwhile crooked city attorney getting a job with the Coyotes. Not that he did -- I knew he would. I'm just awestruck by how amateur-hour he is about taking the gig.


Tindall, a Phoenix resident, worked for about a month with the Phoenix law firm Fennemore Craig, before transitioning to the hockey team. He enjoyed working at the law firm, but the Coyotes presented a unique opportunity, he said.

He attended a press conference at Jobing.com Arena on Aug. 6, when National Hockey League Commissioner Gary Bettman formally turned over ownership of the Coyotes to IceArizona, an investment group headed by Canadians George Gosbee and Anthony LeBlanc.

“The opportunity came up with the new owners and I thought, ‘Well alright, I’ll give it a shot. It seems like fun,’” Tindall said.



Yeah. Like he just wandered in and someone offered him a job. "hurr durr, seems like fun!" Chicago's paths from public corruption to private enrichment are so well-worn that no one really has to say anything as they go, so the artless brazenness on display here is just so jarring to me. I bet you could walk in on this guy nailing your wife from behind and he would say "you seem to have caught me trying to retrieve a pen I dropped, which I can't quite reach."

NAILED IT

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If they leave it will be very interesting where the team calls home. The NHL (ok, the owners) stand to make a very nice windfall from expansion fees. Why "waste" a Vegas, Seattle, or Quebec by relocating there? Could we possibly see a dissolution of the team, with a simultaneous expansion franchise being granted to still take in that sweet, sweet expansion fee? It's more complicated than that but I just can't see anyone leaving that money on the table.

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If they leave it will be very interesting where the team calls home. The NHL (ok, the owners) stand to make a very nice windfall from expansion fees. Why "waste" a Vegas, Seattle, or Quebec by relocating there? Could we possibly see a dissolution of the team, with a simultaneous expansion franchise being granted to still take in that sweet, sweet expansion fee? It's more complicated than that but I just can't see anyone leaving that money on the table.

San Jose Sharks had a unique birth. Not sure the NHL would announce to the world such a precedent though, axing teams so it could keep expansion $ on the table.

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If they leave it will be very interesting where the team calls home. The NHL (ok, the owners) stand to make a very nice windfall from expansion fees. Why "waste" a Vegas, Seattle, or Quebec by relocating there? Could we possibly see a dissolution of the team, with a simultaneous expansion franchise being granted to still take in that sweet, sweet expansion fee? It's more complicated than that but I just can't see anyone leaving that money on the table.

Maybe they settle for a relocation fee just to wash their hands of this whole affair and collect expansion fees on the other two. Also, still waiting on that Seattle building. OITGDNHL would the city with the brand-new state-of-the-art arena be behind a city that doesn't even have an arena.

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If they leave it will be very interesting where the team calls home. The NHL (ok, the owners) stand to make a very nice windfall from expansion fees. Why "waste" a Vegas, Seattle, or Quebec by relocating there? Could we possibly see a dissolution of the team, with a simultaneous expansion franchise being granted to still take in that sweet, sweet expansion fee? It's more complicated than that but I just can't see anyone leaving that money on the table.

San Jose Sharks had a unique birth. Not sure the NHL would announce to the world such a precedent though, axing teams so it could keep expansion $ on the table.

Could the league just call it a relocation fee?

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The debate between relocation fee vs. expansion fee is irrelevant. If the NHL was smart (which it's not, but still) their rules on relocation would be similar to those of the NFL. The NFL can change the fees depending on the size of the market (and it makes sense since an owner in Los Angeles would stand to make a lot more money than one in Houston). With the NHL, it's not about the size of the market, but how badly said market wants a pro team. If Quebecor wants hockey badly enough, it'll gladly pay $400 million in relocation fees on top of the $100 mil or so it would have to pay for the moribund Coyotes.

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If they leave it will be very interesting where the team calls home. The NHL (ok, the owners) stand to make a very nice windfall from expansion fees. Why "waste" a Vegas, Seattle, or Quebec by relocating there? Could we possibly see a dissolution of the team, with a simultaneous expansion franchise being granted to still take in that sweet, sweet expansion fee? It's more complicated than that but I just can't see anyone leaving that money on the table.

San Jose Sharks had a unique birth. Not sure the NHL would announce to the world such a precedent though, axing teams so it could keep expansion $ on the table.

Isn't this kind of the "cleveland deal"?

NFL dissolves (or, "suspends operations" - whatever) the Browns, then "expands" to Baltimore (with the entire Browns roster and front office), then re-expands back to Cleveland with Browns 2.0.

I can't recall if the Ravens had to pay an expansion or relo fee, or if Browns 2.0 had to pay an expansion or "re-activation" fee, but if so, then the precedent is set. Kinda. Sorta. Obviously the intent was totally different - the NFL's situation was more about 'preserving history', while the LOLNHL's would just be about money.

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If they leave it will be very interesting where the team calls home. The NHL (ok, the owners) stand to make a very nice windfall from expansion fees. Why "waste" a Vegas, Seattle, or Quebec by relocating there? Could we possibly see a dissolution of the team, with a simultaneous expansion franchise being granted to still take in that sweet, sweet expansion fee? It's more complicated than that but I just can't see anyone leaving that money on the table.

San Jose Sharks had a unique birth. Not sure the NHL would announce to the world such a precedent though, axing teams so it could keep expansion $ on the table.

Isn't this kind of the "cleveland deal"?

NFL dissolves (or, "suspends operations" - whatever) the Browns, then "expands" to Baltimore (with the entire Browns roster and front office), then re-expands back to Cleveland with Browns 2.0.

I can't recall if the Ravens had to pay an expansion or relo fee, or if Browns 2.0 had to pay an expansion or "re-activation" fee, but if so, then the precedent is set. Kinda. Sorta. Obviously the intent was totally different - the NFL's situation was more about 'preserving history', while the LOLNHL's would just be about money.

Both the Ravens and Titans paid a relocation fee of $29M.

http://www.baltimoresun.com/sports/ravens/bal-modell020996-story.html#page=1

When Al Lerner brought the Browns back, he paid an expansion fee of $530M.

The following year, Bob McMair paid a $700M expansion fee for the Texans.

http://www.nytimes.com/1999/10/07/sports/pro-football-nfl-goes-back-to-houston-for-700-million.html

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