Roger writing the LAWmag
Aug 2009

H for Hypocrisy: The National Hockey League's Sub Judice Gambit

The National Hockey League's board of directors, otherwise known as a board of governors, and in an attempt to influence bankruptcy proceedings presently being held in Phoenix, recently announced that the CEO of Research in Motion (RIM; makers of the Blackberry), Jim Balsillie lacked the requisite good character or integrity to become an owner of a NHL team.

It is a funny thing about sports that the fans and sports media seems too willing to buy, wholesale, statements made not by the athletes, but the other celebrities, the owners and executives. Howard Cosell used to bemoan the lack of real objective and intelligent reporters in sports journalism and if the Balsillie affairs is any example, it is all too true.

Indeed, the Balsillie situation is a perfect example.

First, the NHL brass was caught on summer break, asleep at the wheel and  outplayed by a Canadian genuinely interested in owning an NHL team and bringing it back to Canada. However, the old boys club circled its wagons led by the diminutive league president Gary Bettman, immediately burning their bridges with Balsillie.

Balsillie dartboardFor a 48-year old chartered accountant, Jim Balsillie has bals. He has been watching the NHL patiently and observed that kissing the rumps of the NHL governors was too private school for him or, to put this in business terms, too high risk. Balsillie, like any successful businessman, seeks to control his own destiny.

When he saw the Phoenix Coyotes stumble at the bank, he made his move, like any good businessman, hoping to scoop up the Coyotes without having to defer to the old boy’s club and their relocation fees.

The NHL is a rich man’s club. The sheer determination and shoulder-to-shoulder league-wide policy amongst owners speak to a lucrative flow cash (NHLPA take note) - motivation enough to stand together. And not only at lawn bowling tournaments: these guys are paying some serious cash in legal fees to oppose the upstart Balsillie – attorneys, lawyers, barristers, solicitors, motions, affidavits, depositions – and all in a Phoenix bankruptcy court.

Balsillie is not one of the world’s most successful business men because he prevaricates. By the time NHL general counsel Bill Daly's Blackberry started to vibrate, it was too late.

Confident that the fans and the sports media would back them up (and so far, they have), the NHL circled their wagons and put on a Balsillie Is Rotten campaign.

The pinnacle of NHL hypocrisy came in remarks recently made by Ottawa Senators owner Eugene Melnyk. Melnyk is often deservedly ridiculed by the outside-of-Ottawa hockey press for his allegiance to a lame-duck general manager. Ottawa's recent run of personnel crisises has been reflected in league and playoff results.

Melnyk, as the sports press seems so quick to forget, was the subject of an Ontario securities commission inquiry which alleged misleading and untrue statements made in the financial statements of Melnyk’s company, Biovail Corporation. Melnyk, before the OSC chastised him, blamed his staff! He settled the charges in 2007, was fined $1 million and ordered to cease being director of his company, Biovail, for one year. The OSC record is no credit to Melnyk.

What pricks the conscious of caring lawyers is the NHL pre-emptive strike against Balsillie even while the bankruptcy proceedings are sub judice in Phoenix. By sending out their general counsel Bill Day to media outlets to spin doctor the rejection of Balsillie by the NHL board based on, apparently, Balsillie’s lack of integrity and character, not only offends the rule of sub judice, but seems to be the epitome of hypocrisy.

The media is lapping it up too. The venerable Sports Illustrated published an article which actually quoted Melnyk’s self-serving drivel. The headline in the Canadian Press: Melnyk Victim of Balsillie ‘Cheap shot’.

It all seems premised on the assumption that Phoenix bankruptcy judge R. Baum is a fool, especially since the NHL approved Balsillie as a candidate-owner in 2006.

Behind Melnyl and Daly, the NHL front-line looks no-better and makes one wonder if the H in NHL stands for hypocrisy. The NHL's judgment of character and integrity leaves much to be desired:

  • For decades, the NHL was described as a triumvirate of NHL President John Ziegler, Chicago Black Hawks owner Bill Wirtz and NHL player union president Allan Eagleson. Eagleson stole millions of dollars from players pensions and investments. Both the FBI and RCMP chased convictions of Eagleson, for which he served six months in jail in 1998.
  • Harold Ballard was owner of the Toronto Maple Leafs from 1961 to 1972. From 1972 to 1973, he was incarcerated for three years (of a nine year sentence), guilty on 47 charges of income tax fraud.
  • Bruce McNall owned the Los Angeles Kings from 1986 to 1994 and chaired the NHL board of governors in 1992. McNall was convicted of conspiracy and fraud and sentenced to 70 months in prison.
  • Peter Pocklington owned the Edmonton Oilers from the mid-70s to the mid-90s. Pocklington presently faces two felony charges alleging bankruptcy fraud in the United States – trial set for November 17, 2009.
  • An owner of the Nashville Predators, William Del Biaggo has been sued in the USA for providing forged documents to banks. He now faces six years in prison after pleading guilty to fraud in an to fraudulently obtain US$110 million in loans from several banks.

By contrast, Balsillie has no securities legislation wrap sheet or criminal record. But he does have money and he wouldn’t mind winning a Stanley Cup or two.

By impetuously making a board decision even while judicial proceedings are ongoing in Phoenix, it apears that what the NHL owners really want is the relocation fee which would be there's but for an annoying American bankruptcy court; a fee they could suck from one very rich hockey-loving Canadian.

But to reflect on his character and integrity in that regard is to either be unaware of the culture of big money business – highly unlikely given the money nehind the NHL – or to seek to interfere with ongoing legal proceedings and a Phoenix, Arizona judge, through a gullible or willing sports media.


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