It’s that time of the month when we take a look at what’s been happening in hockey’s business and legal world. Twice a month we cover the big and not so big stories in this arena. We also include a featured story of the period. Let’s take a look at what has been happening this period.
Hockey’s Business and Legal News
Hearing Set for Class Certification in Concussion Lawsuit Against CHL
The judge in the concussion class action lawsuit against the WHL, CHL and Hockey Canada set October 25 through 27, 2023 to hear arguments as to why this action should proceed as a class action lawsuit. Class action lawsuits must be certified before they can proceed as a class action. Former CHL players brought this lawsuit alleging that the CHL, its member leagues and teams responded inadequately to their concussion related injuries medically. They also claim to still suffer lasting effects. This lawsuit came shortly after the NHL settled it’s concussion lawsuit following a U.S. Court denying class certification. The CHL is also dealing with a lawsuit related to abuse and harassment and settled another lawsuit dealing with CHL players legal status as employees. With their hands full, it will be interesting to see if this lawsuit will proceed as a class action suit.
James McEwan, who says he fought 72 times in the CHL, is among 100+ players who have joined a concussion lawsuit vs the league.
— Rick Westhead (@rwesthead) May 15, 2023
Judge has set a date for lawyers to argue whether case should proceed as a class action: Oct. 25-27 in Vancouver.
Background:https://t.co/ShaqWsQxHb
Bids Submitted for Purchase of Ottawa Senators
The deadline to submit bids for the purchase of the Ottawa Senators ended on May 15, 2023. Reportedly, four groups submitted bids out of the potential six interested. This included one reportedly at one billion dollars. The groups led by Michael Andlauer, Jeffrey and Michael Kimel, and Steve Apostolopoulos, and Los Angeles-based producer Neko Sparks each submitted bids.
The sale of the Senators, now owned by Eugene Melnyk’s daughters, has garnered a lot of buzz. Ryan Reynolds, Snoop Dog and the Weeknd have all shown interest in owning the team. Galatioto Sports Partners is assisting the family in the sale of the team. GSP with the family will have to heavily consider the offers and decide how they would like to proceed. Reportedly, Anna and Olivia Melnyk would like to retain ten percent ownership of the Senators. The sale is also conditioned on the team staying in Ottawa. The sale will be a long process but keep an eye on this story as it moves forward.
GARRIOCH: Four bids for Ottawa Senators submitted, including one at $1B, sources say https://t.co/lguwZZH4cr
— Bruce Garrioch (@SunGarrioch) May 16, 2023
We previously wrote a three-part series on the process of purchasing an NHL team. Unfortunately for those excited about Reynolds, it sounds like he is out.
GARRIOCH: Ryan Reynolds has shut the door on owning the Senators, via @ottawasuncom https://t.co/tu7yRIYIZq
— Bruce Garrioch (@SunGarrioch) May 22, 2023
The Sparks Group’s Bid
Looking at the Senators further, Snoop Dog announced that the Neko Sparks group (to which he is a part) will include equity for Canada’s First Nations. We will see if this group is successfull in its bid. However, it certainly seems like Snoop Dog has an interest in bringing diversity to the NHL which may not be a bad thing for the league.
Snoop Dogg has welcomed Canada's First Nations into his bid to buy the Ottawa Senators with open arms.
— TSN Hockey (@TSNHockey) May 16, 2023
He posted a video to Instagram on Monday alluding to reports that the Neko Sparks-led bid includes an equity stake for local Indigenous communities. https://t.co/wAuHueqLzq
Meanwhile, the Sparks group may be looking for additional funding to be able to fulfill their desired bid. The other bids submitted may have driven their intended price up.
More alarming details surfacing about the Neko Sparks-led bid to buy the #Sens. Sources say within the last 24 hours, the "Sparks Finance Group" is still soliciting funding.
— Frank Seravalli (@frank_seravalli) May 26, 2023
"This is somewhat of an urgent matter," the Sparks Group wrote to prospective investors.
NHLPA Looking at Potential Conflict of Interest Involving Kyle Dubas and Agent
The NHLPA is looking into a potential conflict of interest involving the Wasserman agency and its representation of both former Maple Leafs general manager Kyle Dubas and star Toronto forward Auston Matthews. Chris Armstrong of Wasserman represented Dubas in his negotiations with Toronto, but Armstrong is not a certified NHL agent. He mostly focuses on representing golfers. However, the NHLPA has fairly strict rules when it comes to prohibiting certified agents representing both players and team executives. The question here is if those rules apply when a non-hockey related arm of the agency represents an executive while the hockey group represents a player. Many people think the answer to that question is yes but it will be something for the NHLPA to look into.
In many circumstances such as law firms, the only way to represent two sides of a transaction or action is to have a very thorough set of protections and controls in the firm. This prevents one side getting information on the other. There are also situation where the clients give informed consent. You commonly see this in real estate transactions as well as estate planning. This might be a little different however since it is dealing with the NHLPA and agents. It is really the agency and not Matthews or Dubas that the NHLPA is looking at. The answer could impact how agencies operate going forward so is certainly something to keep an eye on.
The NHLPA is reviewing former #LeafsForever GM Kyle Dubas' relationship with agent Chris Armstrong for a potential conflict of interest, reports @frank_seravalli:https://t.co/4hrrEsObnv
— Daily Faceoff (@DailyFaceoff) May 25, 2023
The U.S. Congress is Likely to Propose Bills Related to NIL Rights and NCAA Rules on Pay for Athletes, Antitrust and Amateurism
Members of the United States Congress are looking to propose bills to address the relatively newly created Name, Image, Likeness (NIL) rights for college athletes as well as the general landscape of pay for play and amateurism in college sports. NIL is a somewhat complicated subject simply because it is a little like the will wild west at this point. Each state has their own laws and rules (or they have nothing). The NCAA does too. So there is not really a uniform set of standards at this point.
The bills are likely to be all over the place as far as favoring the NCAA or the players. Even though the bills are likely to fail, the attention these subjects are getting is noteworthy for college hockey players and those deciding whether to go the college route. So much of this can potentially affect NCAA eligibility rules for players.
The NCAA's strategy to rely on Congress to pass legislation that would fix what schools see as wrong with NIL, to prevent college athletes from employee recognition and to gain an antitrust exemption faces long political odds and legally doesn't add up: https://t.co/QG63DTMXvm
— Michael McCann (@McCannSportsLaw) May 30, 2023
Hearing Set on Proposed Claims Process for CHL Hazing Lawsuit
Ontario Superior Court Justice Paul Perell scheduled a hearing in Toronto on August 29, 2023 for the CHL and the representatives for the former players who filed a lawsuit against the CHL related to hazing and abuse to discuss a potential claims process. Following the filing of the lawsuit, Justice Perell rejected the plaintiffs’ attempt to certify the action as a class action lawsuit. Instead, he instructed the plaintiffs to proceed in a “individual issues protocol.”
This process involved notifying all former and current CHL players that they have a potential claim against their former teams and leagues if they were victims of abuse when they played major junior hockey. The liability to the CHL, member leagues and teams could still be very high even though it is not a class action lawsuit. Meanwhile, Justice Perell largely agreed that there seemed to be a significant, consistent culture of hazing and abuse in major junior hockey that needed to be addressed. The difference here is that each claim will be individualized to the person and team/league involved. This hearing should allow the sides to come up with a plan to handle the claims process.
Update: Justice Paul Perell has scheduled a hearing on Aug. 29 in Toronto where lawyers for the CHL and former players who were allegedly abused while playing major-junior hockey will discuss proposals for a claims process.
— Rick Westhead (@rwesthead) May 25, 2023
Expect both sides to file written material before then.
Arizona Coyotes Tempe Vote Fails
Our featured story of the period for hockey’s business and legal updates involves the Arizona Coyotes and their future. On May 16, voters in the town of Tempe went to approve or disapprove three propositions to build a $2.3 billion, privately funded entertainment district that would include a new arena for the Coyotes. The Coyotes have been in a somewhat constant state of uncertainty for a while as they are currently sharing Mullet Arena with the Arizon State Sun Devils. That arena is built for college level capacity and not NHL. The approval of the Tempe plan would be instrumental in giving the Coyotes some assurances of stability.
Instead, the voters in Tempe responded with a resounding NO. Its interesting that voters said no even though it was privately funded. Once again, the Coyotes find themselves searching for potential answers.
Considering the Coyotes are in an active lawsuit against the town of Glendale where they previously played, that is not an option. Downtown Phoenix seems questionable as well. They left there to go to Glendale (although it was largely due to issues related to the specific arena). In any event, the Coyotes once again will be on the prowl to figure out answers to keep the team in Arizona. Otherwise, relocation is a very real possibility. Numerous cities mentioned include Houston, Salt Lake City and even Hartford. Gary Bettman has been adamant about keeping the Coyotes in Arizona throughout his tenure. Stay tuned to see what happens.
The Arizona Coyotes' bid for a new arena appears to be dead.
— TSN Hockey (@TSNHockey) May 17, 2023
In the first release of results from Tuesday's referendum, voters in Tempe were strongly against propositions to build a $2.3B entertainment district that includes a new arena for the #Yotes. https://t.co/fmSAhAEfi8
Post image attribution: By Jenn G, CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0, via Wikimedia Commons