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News and Notes, and a Bankruptcy Question or Two

I’m pulling myself out of Pittsburgh sports myopia today.  We have this NHL hockey team, the Penguins, and the team are on an amazing playoff run, and they’re quite fun to watch and, well, the lunacy here is unbelievable.  Of course, in most of the U.S. ice hockey is at best a minor league sport.  Must . . . stop . . . dreaming . . . in black and gold.

Fans of professional sports have other things to pay attention to these days:  The start of the WNBA season. The coming end of the NBA season.  Major League Baseball finding its summer rhythm.  And the upcoming Champions League final between Manchester United and Chelsea.

On that last note:  The New York Times speculated yesterday that more entertaining, free-flowing NBA play in recent years might be attributable to the influence of European and Canadian players who grew up . . . kicking the ball.  One year on, this little example of athletic convergence between soccer and basketball recalls the series of madisonian posts on sport and governance — one, two, and three — prompted in part by William Birdthistle’s guest stint at The Volokh Conspiracy.   Here is a thought prompted by the Times piece:  Officiating in professional soccer accounts in some ways for the expectation that the flow of the game is mostly managed on the field, by the players.  For example, referees have a great deal of discretion to let play continue even if a foul has been committed.  Dead ball restarts are usually taken without a prompt from an official.  From what I can tell, officiating in NBA basketball proceeds from a default that the flow of the game is mostly managed from the sideline, by the coach.  Rule enforcement appears to be largely mandatory; all restarts are controlled by an official’s whistle.  Should a more free-flowing style of NBA play prompt a reexamination of the modes and methods of NBA officiating?  And if so, what kinds of changes would be in order?

Elsewhere in yesterday’s Times, a profile of the magicians’ “king of the pack,” John Gaughan, the man responsible for building and keeping the secrets of many of professional magicians’ most daunting illusions, included this tantalizing quotation:

Mr. Steinmeyer [the author of “Hiding the Elephant: How Magicians Invented the Impossible and Learned to Disappear”] and other professionals credit Mr. Gaughan with unraveling enduring mysteries and reintroducing them to modern magicians. “What’s a shame is that secrets fall out of fashion,” Mr. Steinmeyer said.

Or, to turn the phrase around, it would be a shame if fashion were to run out of secrets.  This has nothing to do with sport, but I’m thinking of writing a paper that talks about using secrecy to create commons.

And finally, to reward those of you who have read this far, a couple of bankruptcy questions.  Yes, bankruptcy.  Here in Pittsburgh, where the Stanley Cup is just about the only topic covered in the Post-Gazette, a few of us are watching developments in Vallejo, California and Birmingham, Alabama.  Vallejo is a modest city just up I-80 from Oakland, and earlier this month it filed for bankruptcy protection under Chapter 9 of the Bankruptcy Code, which applies to bankruptcy filings by “municipalities” — political subdivisions of a state.  (California optimism being what it is, some local residents proclaimed themselves “excited” by the news.)  Birmingham is the largest city in Jefferson County, Alabama, over which the cloud of a possible Chapter 9 filing has been hovering for some time.  Jefferson County has more than $3 billion in debt related to its sewer system.  A “Jeffco” filing would be the largest Chapter 9 ever, prompting some to suspect that the bond market will save Jefferson County from itself, on the “too big to fail” theory.

Birmingham is sometimes called the “Pittsburgh of the South,” and to be sure, Pittsburgh has a substantial amount of debt all its own, with a couple of twists:  One, on a per capita basis (taking into account Pittsburgh’s relatively small municipal population), Pittsburgh’s debt — roughly $1.5 billion in total — is higher than Jefferson County’s.  Two, Pittsburgh’s debt is divided into two pots.  The Steel City of the North has accrued close to $1 billion in general obligation debt.  *And* it has an unfunded pension liability of roughly $500 million. Both burdens have been sitting there for some time.  If the City were to file under Chapter 9, the junior debtor might well object, claiming either that it is entitled to senior status or that the City isn’t eligible for Chapter 9 protection, or both.  And my bankruptcy questions are:  How would a bankruptcy judge sort out the insolvency and priority questions?  Has there even been such a situation?

Pittsburgh is pretty bullish on tech-based economic development and entrepreneurship, but this sort of thing is depressing!

3 thoughts on “News and Notes, and a Bankruptcy Question or Two”

  1. Frank — The natural population decline is much more pronounced in the City of Pittsburgh, to be sure. And technically, the financial impact of a municipal bankruptcy would fall only on City residents. But Pittsburgh’s suburbs and the City are economically dependent on one another in a more or less traditional way (that is, there are only a few, relatively modest centers of economic activity in the region outside of the City proper). In other words, in my view if Pittsburgh goes, so goes the rest of the region. Mike

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