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.
Tuesday, June 9, 2009
Gary Bettman's Folly
Thursday, May 21, 2009
1 for the Money, 3 for the Show
By now, everyone knows of the $212.5M bid Jim Balsillie has on the Phoenix Coyotes pending a relocation to Canada, and every knows Chicago Bulls and White Sox owner, Jerry Reinsdorf, is also interested, but his bid is believed to be roughly $100M less than the proposed off by Balsillie. What people do not know is that there is a third group of bidders on the franchise, as well as an interesting clause in Reinsdorf’s offer.
There were reports that Gretzky was supporting Reinsdorf’s bid, but that must be called into question now that it is publicly known that the offer is conditioned on the fact that Gretzky be fired. Reinsdorf believes the paycheck Gretzky has been cashing as head coach of the Coyotes is above and beyond fair. Gretzky is set to earn $14.5M over the next two seasons behind the bench and if the franchise is in fact sold to the Bulls/White Sox owner, Gretzky will no longer be a part of the franchise.
What is also interesting is Gretzky mentioning he will not be keeping his share in the Coyotes franchise if it moves to Canada. It was something I found a bit suspect considering the amount of money he has invested in the club and a relocation to Canada is nothing short of a gold mine. Unless he feels the process Balsillie is taking to gain ownership of the franchise is improper, what business man in their right mind would not want to cash in on relocation?
Now, it has come to the attention of the courts and the media that a third bid has been placed on the Coyotes. John Breslow, avid hockey fan and 2% owner of the franchise, is believed to have a group of investors ready to purchase the club and keep it in Phoenix. The proposal has already been delivered to the courts to consider along with the current battle of ownership. On June 22nd there will be a decision and if necessary, a court-regulated auction of the franchise.
There’s no doubt the league has no interest in allowing the franchise to be moved by command of the judicial system, but the conspiracy theorist in me believes the league could be contacting anyone and everyone to get their nickels and cents together to outbid Balsillie and maintain control of the Coyotes franchise.
It’s a different approach to a similar situation with the league as it was with the Nashville Predators and the Pittsburgh Penguins. The league formed a contract for Balsillie that included the guidelines of maintaining the Penguins franchise in Pittsburgh regardless of a new arena and if the club begins the lose money, Balsillie is still unable to move the franchise and the league would take control. Then came the Predators and the refused sale to Balsillie at roughly $240M and was sold for just under $50M less, but that’s alright because Craig Leipold, then owner of the Predators, was immediately sold majority ownership of the Minnesota Wild franchise. Seems like it’s good to be on Bettman’s happy list and not in the black book like Balsillie.
The most frustrating part of watching the circumstances unfold is being a Canadian. There’s no doubt every Canadian viewer overlooking the procedures are crossing their fingers for a new franchise, wondering if it’s right for the courts to determine where a franchise should and should not be, and also recognizing just how much the league doesn’t give a shit about Canada. The fact is, when the league was ready to expand by 4 teams in 1998 and onward, there should have been a Canadian team on that list.
My only question: When is the league finally going to give back to their largest, and ever growing, hockey market? It’s about time.
Micheal A. Aldred
michealaldred@hotmail.com
Tuesday, May 19, 2009
Coyotes Mess: Nobody's Talking
Could the NHL and RIM CEO Jim Balsillie resolve their differences, and come to an amicable solution? It seems highly doubtful considering Balsillie's underhandedness in trying to gain a franchise with the singular goal of relocating it to Southern Ontario, but there has to be some compromising ground.
The problem is that neither side has ever negotiated in good faith with the other. Balsillie's bent on moving a franchise, while the NHL is steadfast in keeping all existing teams where they currently are. It's been to his own detriment for Balsillie not to at least be open to the NHL Board of Governors stipulation of trying to make a team work in its existing location as a condition of ownership transfer.
The fact that Balsillie has gone out of his way to slap the NHL in the face by currying the favor of the Canadian fan base also hurts himself and the league. It's a direct shot at the Board of Governors, basically stating that he feels he doesn't need to follow their rules...that corporate law supercedes any actions the NHL can take internally. This action alone has grave consequences for all of pro sports, and it's the main reason the NBA, NFL and MLB have all written statements imploring Judge Baum to strongly consider the NHL's right to determine both team ownership and relocation issues.
In following live reports from the hearing today, the judge has stated previous cases do support the NHL's stand on relocation, but it won't be determined today who is rightfully in control of the team. The judge has stated that Balsillie's groups should have worked with the NHL instead of jumping the gun, and has wondered about current owner Jerry Moyes also working out a better deal with the league.
One thing is for certain. None of the parties involved seem to want to talk to each other, and that has caused a lot of the dysfunction in this case. Given the history, it's understandable that Balsillie would have doubts to the NHL negotiating with him in good faith. What's surprising is that the NHL seems more interested in taking over the franchise altogether, rather than sitting down with Moyes to discuss the future, possibly including the supposed deal from White Sox owner Jerry Reinsdorf.
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