Friday, September 11, 2009

What IS the 3rd/Public Option?

1) Firstly, before we at FR2 get into (yet another) post concerning the Phoenix soap opera, we wanted to mention, like FR did so eloquently/succinctly today, that it's been 8 years since the 9/11 attacks. We all remember the shock and outrage felt that morning. We want to have our readers recall that on that fateful day and the weeks and months after it, the heroism that was displayed by the police, firefighters, passengers on Flight 93, our Armed Forces, etc. They demonstrated in the wake of that senseless tragedy why we're all so proud to be American!!

2) Now to go 180 from those sentiments to the mess in the desert. Yesterday had been looked upon a few weeks ago as the date circled when the mess would essentially be resolved. Now the situation looks muddier than ever. Not only did the bankruptcy judge NOT make a decision yesterday, but directly alluded to an option not currently on the table. That BOTH current offers to buy the team, and satisfy the debt in the bankruptcy proceedings may be inadequate/rejected. Judge Baum did not say what that 'Third Option'; might be, leaving folks like us at FR2 to speculate based upon little information/limited sources what it might be. In either case, the NHL/Bettman or PSE/Balsillie, both parties are sure to NOT like the judge's choice. We think Balsillie will like it least.

3) So, you're undoubtedly asking what on Earth are you alluding to FR2?

  • We believe that the judge will essentially quash/kill Balsillie's bid saying that he doesn't want to set precedent for allowing an outside entity to decide league policy. This will delight Bettman. Who seemed poised to do anything possible short of assassination to prevent the Canadian billionaire from obtaining the franchise.

  • The judge will also NOT approve the NHL bid as it doesn't come close to satisfying creditors (its 100 million less than the PSE bid) this will not make the NHL happy!

4) We can foresee the judge 'staying' (we're not lawyers, so forgive us if we don't use correct legalese) the decision until either the NHL amends its bid, or other bids can be found that do satisfy creditors sufficiently. There is also another scenario one source told us that is being discussed in back rooms. "The public option". No, not the ominous Obama health care take over, but an option where the city of Glendale takes ownership control over the team. They were the one's who were poised to be the biggest losers if the team was sold and moved (a likelihood regardless of who takes over).

5) The city has already 'invested' a great deal of revenue to this and was going to be asked for compensation anyway, so why not get the equity if you're subsidizing the product anyway? This way the city can limit its losses and control the destiny. The NHL would like this less than a hand picked owner, but would begrudgingly accept this. However do NOT expect this to happen today. We believe that if/after the judge rejects both bids today, the city will begin to scramble to get its act together and try to convince their tax payers that a Green Bay like situation would be in their benefit. Stay tuned folks, this is getting crazier by the day!

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