Ken Houghton distracts us from the important things with an examination of monopoly power, asymmetric information, and perpetuating a bad business deal.
By the time Gary Bettman got to Phoenix, his lawyer was lying to the court:
“There are three things that it takes to be an owner of an NHL franchise. One, you’ve got to be wealthy … two, you’ve got to love hockey. And Mr.Balsillie, he has got both of these in his favour in spades. Nobody’s denying that. But number three, your Honour, you’ve got to play by the rules that bind NHL owners.”
My Loyal Reader notes that NHL owners are clearly bound by something. In at least one case, handcuffs. From the WSJ, two days ago:
[William “Boots” Del Biaggio III’s] [bankruptcy] filing came amid lawsuits accusing him of fraudulently offering collateral he didn’t own to secure the loans he took out before buying the [NHL’s Nashville] Predators.
Del Biaggio pled guilty to forging financial documents in order to secure $110 million in loans from eight banks and National Hockey League owners Craig Leopold (of the Minnesota Wild) and AEG (of the Los Angeles Kings), loans that Del Biaggio used to buy his stake in the NHL team.
It’s good to see that the owners have a very strict policy when selecting owners, almost as sensible a policy as when they located a team in the Phoenix area in the first place. (Noted for the record: both the city of Phoenix and Scottsdale turned down the “opportunity” to have the Coyotes play in an arena there after the initial lease was up. Only Glendale was stupid enough to make an offer.) I guess none of them owns a Blackberry.
Webb version here.