Gary Bettman's Folly

It's lost $300 million since leaving Winnipeg, having never turned a profit, but NHL Commissioner Gary Bettman is dead set on keeping the Phoenix Coyotes in Glendale. A hearing scheduled for Tuesday in the bankruptcy case may determine the future of the franchise (barring the appeals that will likely come from all sides involved).

The irony in all of this is that the team was relocated from Winnipeg in order to stem the losses being incurred by the ownership at the time. As the NHL expanded heavily into the U.S., it took a toll on the smaller Canadian teams. The NHL conducts business in U.S. currency, and at the time the Canadian dollar was worth $0.73 U.S.

The question that has never been fully answered is why Bettman is so insistent. Some point to southern expansion as Bettman's legacy to the NHL. Now, to be fair, NHL expansion wasn't started by Bettman. Prior to his arrival the NHL added San Jose, Tampa Bay and Ottawa and had already announced teams in Florida and Anaheim. And the owners did bring Bettman in for the sole purpose of selling the game in the U.S. and to complete the expansion. He did so by adding Nashville, Atlanta, Minnesota and Columbus, while the original Minnesota team relocated to Dallas, Hartford to North Carolina, Quebec to Colorado and of course Winnipeg.

But why fight so hard for Phoenix now? The only group that seems to argue that the Coyotes can be turned around is the city of Glendale, who stand to lose hundreds of millions if the team leaves. Is it really so dire for the NHL to have another team in the southwest? Sure, alignment gets a bit more tricky, but that's not a show-stopper. If anything, the Coyotes have been hit hard by the 2005 lockout and the subsequent increases of the salary cap floor...a common lament among most of the smaller-market teams that are struggling to spend up to the floor (currently about $40 million).

Bettman is easy to hate, especially for Canadians who feel he has an anti-Canada position, as he put in far less effort to save Winnipeg and Quebec than he has with Pittsburgh, Nashville and Phoenix. He's also been through two lockouts, the second resulting in the salary cap finally being instituted. I don't think the NHL owners look at him in the same way. Under his watch, league revenue has gone from $400 million to $2.2 billion as well as given most of the owners cost certainty.