October 11, 2011
Since 2006, Research In Motion co-CEO Jim Balsillie has failed in three attempts to purchase NHL teams. Which is as frustrating as an interruption in service for a BlackBerry owner, although less frequent.
There was the $185 million bid for the Pittsburgh Penguins, which he finally pulled after the NHL imposed restrictions on his purchase; his bid for the Nashville Predators, with then-owner Craig Leopold walking away from a $238-million offer, and his bid for the Phoenix Coyotes, as his $212.5 million bid to acquire the team through bankruptcy court was rejected and the NHL eventually took control of the franchise (which it still owns).
In all three cases, Balsillie allegedly sought to uproot the franchises and relocate them to Hamilton, Ont.
Today, RIM is struggling to maintain market share in the smart phone industry. Takeover rumors and speculation about spinning off parts of the company swirl.
Much of the criticism has been pointed at RIM's leadership — and Balsillie's pursuit of an NHL franchise has become the go-to example for taking his eye off the BlackBerry.
From CNBC today (watch here), Jaguar Financial CEO Vic Alboini, whose company owns eight percent of RIM shares, said this about Balsillie:
"Part of the problem at RIMM has been the management dominance. We have a board here that has displayed a lack of oversight, and that's been part of the issue. You cannot have a co-CEO spend three to four years chasing a hockey team."
From the Canadian Press, Tom Caldwell, chairman and CEO of Caldwell Securities Ltd., said:
"Once the CEO is building the maxi yacht or the great mansion or trying to buy hockey teams, he is not paying attention to his business in my mind," he said of co-CEO Jim Balsillie's unsuccessful attempts to buy an NHL franchise. "As the stock goes down, people look for someone to blame and it's natural to try to blame the CEO and particularly when he's got a profile of trying to do things unsuccessfully that don't relate to his business."
This meme actually stretches back to the summer, when The Street put the cards on the table in July and asked if Balsillie's "hockey obsession doomed RIM":
Did a hockey fantasy kill RIM? Wasn't Jim Balsillie working on his own time to spend his own money, which he has a right to do? Well, you can call it a coincidence, but here are the numbers:
Since Balsillie's Oct. 5, 2006 bid for the Penguins, RIM's shares are down 16%. Over that same period, the Nasdaq is up 24%, and Apple -- riding the incredible success of its iPhone, which it turns out people did want -- has risen 358%.
And here we thought having to battle Gary Bettman in court was the most unpleasant aspect of Balsillie's failed NHL pursuits. Well, that and selling season tickets for a team that never relocated.