The Nashville plot thickens
A July 17 article by Brad Schrade -- who has been doing yeoman's work reporting on the convoluted machinations that led to legal scrutiny of Del Biaggio's finances -- disclosed this gem from Doug Bergeron, a Canadian investor Del Biaggio announced as one of his backers the night before the sale of the Predators went down:
"Boots bragged to me that he was able to convince Bettman's office to overlook the need for his audited financial statements because it was too much work," Bergeron is quoted as saying.
Yikes!
Now, understand that this is one man's word. The NHL, through a statement issued by Deputy Commissioner Bill Daly, disputes Bergeron's statement and claims the league conducted the same stringent checks on Del Biaggio that it does on other owner candidates.
But what Bergeron is saying -- and what Del Biaggio may someday have to testify about in court if the matter gets that far -- is that the NHL's much-touted financial checks were somehow bypassed or, at the very least, substantially reduced when it came to Del Biaggio buying a minority stake in the Predators. That stake was said to have been the cash necessary to complete a deal with local investors and keep the team in Nashville. But beneath the surface, questions are raised as to whether the NHL had Nashville's best interests firmly in mind.
Bergeron said that Del Biaggio told him in December that Commissioner Gary Bettman's office gave him special permission to buy a share of the team. Bettman has been silent on this subject, but there are published reports that claim he told the NHL Board of Governors at a recent meeting that he had no knowledge of at least some aspects of the complex financial arrangements, including loans made to Del Biaggio by two members of the NHL's Board of Governors.
However, TheTennessean reported Bergeron said that Bettman himself told him that he (Bettman) helped arrange the agreement that Del Biaggio had with the Predators' local ownership. Bergeron is also quoted as saying the commissioner told him that the deal is "a great structure that we put together" and that Del Biaggio should be happy "because it was my idea."
If true, this is important because, as The Tennessean points out (and an SI.com source has previously confirmed) that agreement essentially gave Del Biaggio and his partners contractual rights to take control of the team and under certain conditions move it to another market. SI.com and others have reported that Del Biaggio at one time had an agreement to help bring a team to the new Sprint Center in Kansas City -- a building owned in part by a company headed by Los Angeles Kings owner Phil Anschutz, who is listed in Del Biaggio's bankruptcy filings as having loaned him $7 million in order to close the Predators deal.
Del Biaggio filed the bankruptcy petition to protect himself from claims against Anschutz. Former Preds owner Craig Leipold, according to the documents, loaned Del Biaggio an additional $10 million. Banks are also involved and Del Biaggio has been accused in various lawsuits of defrauding those lenders and other investment partners.
According to The Tennessean, Bergeron never did buy into the Preds (despite published reports attributed to Del Biaggio that he had indeed signed on to the deal). Bergeron came forward because as a hockey fan and potential investor, he was concerned that the NHL had apparently failed to do its due diligence on Del Biaggio. Bergeron, who says he met with the commissioner in his New York office in October while considering the deal, also said: "This whole drama was eminently avoidable."
Earlier this week, the paperprinted a Power Point presentation it obtained that showed Del Biaggio was wooing potential investors with claims that, should the Predators fail to meet attendance and financial goals spelled out in the documents that govern his shares, the team would revert to his investment group and could easily be moved. Local ownership and the NHL are on record as saying they were unaware of Del Biaggio's actions and that the document in the newspaper's possession is a working agreement and not the final contract.
However, there are clauses in the agreement that would allow the team to be moved after five years, according to Nashville mayor Karl Dean, who also noted that he and the agency governing the Preds' current arena relied on the NHL's due diligence with Del Biaggio.
There is much to be sorted out here, for sure, but no matter how you draw it, this is not a pretty picture for the NHL. Under fire for its apparent lack of scrutiny with regard to Del Biaggio, the league has resisted claims that it brought him to the table to thwart an offer from Canadian-based billionaire Jim Balsillie, who raised displeasure among team owners last year by attempting to buy the Predators and move them to Southern Ontario where they would have opened a can of legal and political headaches by encroaching on the powerful Maple Leafs' territorial rights.
Ballsillie's agents have claimed that he submitted a substantially higher bid to then-Preds owner Leipold, but was rebuffed in favor of a lower bid by local interests and Del Biaggio. Once the Nashville deal was closed, Leipold purchased the Minnesota Wild and was approved as that team's new owner -- leaving Del Biaggio and friends with a franchise he may have been hoping to move to a location more acceptable to the league: Kansas City.
Did simple haste in attempting to block Balsillie ultimately deliver a public relations black eye? Was the league napping while Del Biaggio tried to stick his hand in the Nashville cookie jar? How could the NHL fail to recognize the precarious state of his finances? Were Predators fans and their community gulled from the start while the team was ultimately being primed for a league-approved move?
Stay tuned.
If Boot Del Biaggio was the only problem the league had with Nashville, it would be more than enough. However, the signing of Alexander Radulov, a former first-round draft pick who was under contract wiith the Predators, by a team in Russia is also the cause of much consternation.
Radulov last week signed a multi-year, multi-million dollar deal with the Continental League seemingly just hours after it and the NHL had agreed to honor each other's contracts while an expired transfer agreement is being renegotiated. It's not clear how this will be decided, but Nashville is certain that Radulov is their contracted player and if there isn't some sort of agreement that respects the contract that Nashville had with the budding star, it's likely that an all-out war between the two leagues could erupt.
The International Ice Hockey Federation is expected to get involved, a decision which could impact whether contracts are respected by all the hockey-playing nations in the federation. It's expected the IIHF will be pressured by the NHL to deny Radulov permission to play in the upcoming Olympics and other international competitions until the matter is resolved.
It's hard to see the dismissal of coach Ted Nolan from the New York Islanders as anything but vindictive. There had been rumors for months that Nolan and general manager Garth Snow didn't see eye to eye on several matters involving player personnel, but in firing Nolan after virtually every NHL head coach opening had been filled, Snow added to the undeserved reputation that Nolan can't work with management.
Nolan had a year left on a contract that saw him deliver an undeserving team to the playoffs in his first year and just miss with a lightly talented squad that was riddled with injuries in his second. Snow, who took off his goalie pads to become the interim GM after Nolan was hired in 2006 by owner Charles Wang, could have extended Nolan's contract thereby assuring him of job security while he worked new (read young) players into the lineup of what is really a horrible hockey organization. He chose instead to use the sword that has been hanging over Nolan since he was ousted in Buffalo.
It was a small-minded move on the part of Snow (who, by the way, had his interim label lifted shortly after the firing) and it's hard to imagine any kind of real leadership in a franchise that seems to change day by day regarding the mood of Wang. In the end, it is Wang who has put the diss in and taken the fun out of hockey's most dysfunctional franchise.
And there is no end in sight. Just ask Nolan, Neil Smith, Pat LaFontaine, Mike Milbury and a host of others who have run afoul of Wang's ownership style. Those who are outraged by Nolan's sudden dismissal can rest assured that Snow is closer to the door than he is to any kind of success on Long Island, no matter what he did to his coach. Recent history is provides a pretty reliable crystal ball.
