Blackberry fans got a windfall Wednesday, though most probably didn't even know it. A bankruptcy judge mercifully killed RIM CEO Jim Balsillie's ruinous quest to purchase the NHL's Phoenix franchise. Now maybe Balsillie can get back to running his company, which is withering from neglect.
Blackberry fans got a windfall Wednesday, though most probably didn't even know it. A bankruptcy judge mercifully killed RIM CEO Jim Balsillie's ruinous quest to purchase the NHL's Phoenix franchise. Now maybe Balsillie can get back to running his company, which is withering from neglect.Balsillie pulled out all the stops to purchase the Phoenix Coyotes and move them to Hamilton, Ontario, despite repeated rebuffs over the past year from National Hockey League commissioner Gary Bettman. Bettman wants the franchise to remain in Phoenix, period. (We won't debate the merits of that here).
But Bettman's rejection only furthered Balsillie's desire to become a Lord of The Rink. In May, he conspired with Coyotes owner Jerry Moyes in a complex scheme that saw Moyes put the team in bankruptcy and Balsillie emerge virtually the next day with a ludicrously high offer to buy it out of receivership.
Yesterday, U.S. Bankruptcy Court judge Redfield T. Baum sided with Bettman, ruling that the bankruptcy process does not supersede the league's right to determine the location of its franchises. (Cue sighs of relief from NFL, NBA, and MLB).
RIM stockowners and Blackberry users should send Baum a big Thank You note.
To say Balsillie was "interested" in landing the Coyotes is to suggest Ahab held a mild desire to catch a certain large, albino marine mammal. Balsillie, a Canadian, was obsessed with becoming an NHL owner.
He formed a separate corporation to pursue the bid, spent millions of his own money on legal fees and promotional campaigns (particularly irksome to the NHL was that Balsillie started selling Coyotes season tickets in Hamilton), and whiled away countless hours lobbying everyone from Canadian Prime Minister Stephen Harper to hockey icon and former Coyotes coach Wayne Gretzky to get backing for the move.
What's happened to RIM in the meantime?
Its stock price has been cut in half in just over a year-hitting a two-month low last week following dismal second quarter results. It's done little to respond to new competition from the Palm Pre, Apple iPhone and Microsoft's new Symbian alliance with Nokia. And it was recently slapped with a downgrade from Goldman Sachs.
To many, RIM seems adrift. "Their new product portfolio appears to offer little that is meaningfully different from existing products, while competiors will be launching numerous new phones," Deutsche Bank analyst Brian Modoff said in a note last month.
No surprise there, given RimJim's hockey habit.
CEOs are paid millions to run their companies and deliver the best possible results for shareholders regardless of circumstances. They're also ultimately responsible for the livelihoods of thousands of employees and, in part, the prosperity of businesses that use their products.
Where's Balsillie been, during one of the worst markets in history? Shuttling back and forth on private jets between Southern Ontario and the Arizona desert in pursuit of the Coyotes.
If Balsillie wants to abandon his fiduciary duties and blow a fortune on Quixotic pursuits, that's his right. It's his money. But if he really desires to be the next Paul Allen he needs to do what Allen did-step down from his executive role at a major, publicly traded corporation and hand over his position to someone who wants the job full time.
Imagine if Steve Ballmer, with Windows sales in the tank, spent most of his hours auditioning for Dancing With The Stars? (Actually, Steve did bust some pretty mean moves when he dodged Hungarian Egg Throwing Man). Ballmer will be on thin ice anyway if Windows 7 is a bust, but there's no question the man lives and breathes Microsoft.
C'mon Jim, just play fantasy sports like the rest of us and get back to using your formidable talents on behalf of RIM, which is still a great company that is relied upon by thousands of businesses for mobile communications. And if that's not enough, here's a final suggestion. Ask former CA chief and New York Islanders owner Sanjay Kumar how that whole tech mogul-to-hockey boss thing worked out.
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