Extra large battle brews for Balsillie
Hortons magnate once craved his NHL fix, too
Joe O'Connor, National Post
Published: Saturday, May 09, 2009
Ron Joyce knows Jim Balsillie, and he respects and admires him as a businessman. Joyce is a businessman, too. He helped transform a small coffee and doughnut shop that was opened in Hamilton by his hockey-playing buddy, Tim Horton, into a Canadian cultural icon and internationally recognized brand.
Joyce has done some other things with his life along the way, including the very thing that Balsillie, the BlackBerry king, is attempting to do now.
In 1990, Joyce was Jim Balsillie. He was the guy with the deep pockets trying to bring a National Hockey League team to Hamilton. Unlike the Canadian maverick now confronting Gary Bettman and the NHL in an Arizona bankruptcy court for control of the Phoenix Coyotes, Joyce's Hamilton bid played by the rules. His group was not trying to move an existing franchise, it was trying to win a bid for an expansion team. They were convinced they would be successful right up until learning they had been rejected in favour of Ottawa and Tampa Bay.
It was a devastating blow to Joyce, his group, and the city of Hamilton, and it was largely delivered by the Toronto Maple Leafs and the Buffalo Sabres, two existing franchises with no interest in seeing an upstart appear in what was -- at least in the Leafs case -- their recognized territory. Joyce was so upset by the news he broke down in tears during a television interview.
Nearly two decades later, Balsillie is making another run but by his own rules. Balsillie's legal team in Phoenix has accused the NHL of running its business like an "illegal cartel" in court documents, while alleging the Leafs have long been colluding with the league to preserve their lucrative financial fiefdom in the Greater Toronto Area. The gloves are off, and Joyce suspects that getting into to a legal brawl with a league you want to join is not the best way to bring an NHL team to Hamilton.
"If [Gary Bettman] does not want Mr. Balsillie to have the franchise in Hamilton, or anywhere as far as that goes, he has got a bit of an uphill battle," Joyce said yesterday. "If you depend on the courts, the courts could make a decision. And let's assume Balsillie wins. Are they going to accept that as a win, or will they challenge it with an appeal? So, I guess what I am saying, if they don't want him at all as an owner, and they don't want him in Hamilton, [balsillie] has got a real uphill battle legally."
The courtroom fight is not the only problem facing Balsillie, according to the former coffee-shop magnate. There are larger issues. Is Hamilton an economically viable destination for the NHL? Joyce does not think so. He loves the Steeltown, but discounts the notion that having a professional sports team puts a city on the map. Teams do not matter. Money does. And with the NHL business model dependent on ticket sales and, more importantly, selling corporate boxes, Hamilton is an unnatural economic fit for the big leagues.
"I count my lucky stars that I didn't get the team, because of the financial mess the NHL is in today," Joyce said. "Mr. Balsillie, if he is successful, has deep pockets and he is going to need them, because you don't have enough head offices in Hamilton, in my opinion, to support the private boxes program which is such an integral part of making it work today."Joyce should know. The Hamilton bid failed, but the multimillionaire philanthropist did get into the hockey business for a time as a part owner of the Calgary Flames. Skyrocketing player salaries and a weak Canadian dollar in the 1990s, as well as questions as to how the team was being run, prompted Joyce sell his stake in the Flames in 2001.
Now, the man who played by all the rules and lost in 1990 believes the billionaire who is breaking them in 2009, would be best advised to close his wallet and walk away.
"Now, we as Canadians would love to get another Canadian team," Joyce says. "Would Quebec City work? Probably not. Would Halifax work? Definitely not. Would Winnipeg work? Maybe, I don't know, they sure want one. But you need a lot of head offices and you need a lot of capital, and especially when you look at what is going on in the world economy today, owning a NHL team -- or any professional sport, really -- is a challenge, profitability wise, with a lot of different cities. To answer your question: There is not a lot of optimism. I see more negatives than positive."