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NHL Hockey Returning To Winnipeg

In 1996, the Winnipeg Jets left town for what they thought were greener pastures in Phoenix.  The Phoenix Coyotes are stuck in bankruptcy and NHL control for their third season.  It seems improbable that there will be a successful team in Phoenix.  Their eventual sale to another market seems almost inevitable. 

In the meantime, Winnipeg missed NHL hockey.  They missed the Jets.  Popular sports bars throughout Winnipeg still retained their Winnipeg Jets memorabilia.  Stores still sell Winnipeg Jets memorabilia.  This is true in larger cities in Manitoba (such as Brandon) which lie a few hours from Winnipeg itself.  The Winnipeg Jets maintained a strong following even though they didn’t exist anymore.  The Manitoba Moose were an AHL team that moved into Winnipeg in the Jets absence and they were one of the more popular franchises in the AHL.

Finally, after 15 years we have the official announcement that NHL hockey is returning to Winnipeg.  The Atlanta Thrashers are moving there.

The NHL really has no choice but to move the Atlanta Thrashers to Winnipeg.  Atlanta ownership gave up on the team years ago but could not sell because of an internal lawsuit.  They claim that they have wanted to sell since 2005 and lost over $130 million in the process.  Now that they are out from the lawsuits and can sell, they cannot find a local buyer.  The Atlanta Spirit ownership group basically handed back the franchise to the NHL and said they were unwilling to cover the losses.  Unlike Phoenix where the city of Glendale, Arizona (where the Coyotes play) have put up $25 million last year and a further $25 million next season to cover losses, there was nobody willing to cover Atlanta Thrasher losses.  This left the NHL having to support the team financially or sell to a new market. 

The only market that was realistic was Winnipeg.  It is the only place in North America that has an arena ready and a strong ownership group.  The NHL had no other realistic choice, despite Gary Bettman’s claims to the contrary.

As for Atlanta, they are the only market in recent times to lose two different NHL franchises - the Thrashers join the Atlanta Flames who left in 1980.  Neither had strong ownership.  Neither was a winner.  It is unknown how well the Atlanta market would have done if they had a winner, but the NHL is bound to fail if a market must be a winner to be successful.  By necessity for each winner in hockey there will have to be a loser as well.  Nothing can be done to change that.  For the NHL to succeed in 30 markets, they need 30 markets that will survive win or loss.

On a personal note, I was in Atlanta in the spring of 1999 and noticed a twenty something year old man roller blading through Piedmont Park wearing a Team Finland jersey with Ville Peltonen’s name on the back.  That was a clear sign that some dedicated hockey fans existed in Atlanta, Georgia.

In the 15 years that NHL hockey has been missing from Winnipeg, three major changes have occurred.  The biggest is the increase in value of the Canadian dollar.  In 1996 it was as low as 60 cents US and today it is worth more than one American dollar.  This is significant for Canadian franchises.  They pay salaries in American dollars (as do all NHL teams) and make their revenue in gate receipts in Canadian dollars.  When the Canadian dollar rises against the American dollar, Canadian markets do well.

Another major change is the salary cap and revenue sharing under the current CBA.  This helps qualified smaller markets to survive.  It cannot help a market like Phoenix or Atlanta where hockey never caught on (in part due to inept ownership), but a market like Winnipeg that loves their hockey will be better able to survive hard times, for example downturn in the Canadian dollar, with the current economic structure.

The final major change is the failure of Gary Bettman’s strategy of expanding southward.  For the most part, hockey has not caught on the way it was promised with Southern expansion.  The NHL does not have a big national TV contract despite their southern expansion.  Several of the new generally southern teams are on life support.  Atlanta is moving to Winnipeg.  Phoenix is likely moving next.  Markets like Florida, Columbus, NY Islanders, St Louis and Dallas are in unstable situations.  Some might be forced to move.  The Southern US markets are large but they are not traditional hockey markets and they have been tough to crack.  They are no longer considered the future of the NHL.  They are depending on market either a measured success or an outright failure given how much time and money (including a year long lockout)  have been invested into their success.

As a result, more hockey teams in Canada looks likely, when the opposite was true in the mid-1990’s.

The Atlanta Thrashers are selling for $110 million which goes to previous ownership plus a $60 million relocation fee, which goes to the NHL to be distributed to all teams.  They originally paid $250 million for the rights to expand to Atlanta.  That is a poor investment that lost value.

The NHL is stronger with hockey in Winnipeg instead of Atlanta.  They would also be stronger with hockey in a successful market instead of Phoenix.  There are a few more potentially troubled markets on the horizon and few places that they can be moved as successfully as Winnipeg will be.

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Comments

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Southern expansion started under the regime of John Ziegler. All Gary Bettman has done is continue that policy.

The Thrashers had a very promising start, but ASG had no intention of ever being competitive, and when the NHL told them to get their shit together they blithely ignored the requests. In the end, the fans suffered for it because ASG decided they couldn’t be arsed to listen to any local offers from groups that only wanted the Thrashers and not take the NBA’s Hawks in the bargain.

The fans stayed away because they didn’t want to give money to incompetent ownership—if this were a Northern team, I highly highly doubt that you and the rest of the smug assclowns sackdancing on the Thrashers fans would be cheering or welcoming this move.

If Jets 2.0 don’t sell out every single game, I will fully expect you to take them to task—though I know you won’t, because they’re not in the Dirty South where we’re just all ign’ant rednecks that don’t deserve hockey.

Posted by AcidQueen from Raleigh, NC on 05/31/11 at 08:24 PM ET

PuckStopsHere's avatar

Southern expansion started under the regime of John Ziegler. All Gary Bettman has done is continue that policy.

Gary Bettman SIGNIFICANTLY expanded things southward.  Technically, southern expansion began under Frank Calder (but that has nothing to do with whether or not Bettman’s version has succeeded).

If Jets 2.0 don’t sell out every single game, I will fully expect you to take them to task—though I know you won’t, because they’re not in the Dirty South where we’re just all ign’ant rednecks that don’t deserve hockey.

Acid Queen, you were a decent hockey blogger (do you do it anymore?), but you have set up a real straw man argument here.  I have never taken any team to task for failing to sell out every single game and I will not start now.  However, when a market fails financially twice as Atlanta has, it is hard to say nice things about it.

As a Carolina resident, you feel beaten up by this situation and you get lumped in with failing markets by being a southern team, even though Carolina is doing pretty well at the box office, but your rant is misplaced.  It doesn’t address what I am actually saying.

Posted by PuckStopsHere on 05/31/11 at 08:34 PM ET

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Again, all Gary Bettman has done is continue a policy started by his predecessor.

However, when a market fails financially twice as Atlanta has, it is hard to say nice things about it.

The first time, it was because the owner of the Flames couldn’t keep the team and the Calgary group was the only bidder.

This time, it’s because the owners of the Thrashers are incompetent boobs who had no intention whatsoever of entertaining bids from local investors, internal lawsuit or no. The fans stayed away not because they didn’t care, but because they didn’t want their money going to line the pockets of a group that had absolutely no intention of building a competitive team. Somehow, that makes them “bad fans” who don’t deserve a team—but if they were up north they’d be considered smart and passionate.

Straw man?  I don’t think so. If this were a northern team, you and everyone else would be all about making excuses for them, and no talk would be raised about “the failure of northern teams”.

But when you talk about “the dismal failure of southern expansion”, that makes your true feelings clear—I’ve been around for far too long to not recognize the bias, whether flagrant or subtle.

As for the blog, I was forced to give it up by my employer. If the blog paid my rent like my 9-5 job does, I’d still be blogging.

Posted by AcidQueen from Raleigh, NC on 05/31/11 at 08:46 PM ET

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While I have heard St. Louis is in some kind of ownership mess, their attendance and TV ratings have been strong. I don’t think they should be in your unstable bad market list.

Posted by Devils In The Details on 05/31/11 at 09:23 PM ET

PuckStopsHere's avatar

Unstable ownership can make a market a bad one.

Posted by PuckStopsHere on 05/31/11 at 09:24 PM ET

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Back in 2005-2006 the Blackhawks were averaging 12,000-13,000 fans a year.  They were 29th in attendance out of 30 teams.  I guess Chicago is just not a hockey market unless of course they put a winner on the ice.  Based on the reasoning of the article above, if Chicago didn’t turn things around, they might be on there way to Winnipeg or Quebec City.

Posted by RogerNYLA on 05/31/11 at 10:51 PM ET

PuckStopsHere's avatar

Roger ignores a few important factors

1) hockey has succeweded in Chicago for many years long before 2005/06.  In fact at that time the Chicago Wolves in the AHL were outdrawing the Blackhawks.

2) Bill WIrtz was very happy to keep the Hawks in Chicago and likely had things set up so that he was making a profit despite low attendance.

But yes Bill Wirtz was killing the market had Chicago not been an established market he could have killed hockey in Chicago.

Posted by PuckStopsHere on 05/31/11 at 10:59 PM ET

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Roger was being sacrastic.  Roger’s point is that it’s wrong to just write of the south as a non hockey market based on the Atlanta situation.  The Thrashers were treated as the perverbial red headed stepchild almost since they’re inception.  They were there to have a 2nd tenant in the arena after the Hawks.  If the Thrashers had a stable management group that cared about hockey, they would have been a success.  In the late 80’s early 90’s the Jets were averaging 12,000-13,000 a year in attendance.  In their final year they averaged about 11,000 fans.  Atlanta averaged about 13,000 fans this year and back in 2006- 2007 when they had a more competetive team, the averaged close to 16,000 fans.  So it looks to me as if Atlanta might be a better hockey market then Manitoba.

Posted by RogerNYLA on 05/31/11 at 11:18 PM ET

PuckStopsHere's avatar

I wouldn’t be willing to own an NHL hockey team in Atlanta (assuming I had the money).  It is too clearly a money loser.  I think you would agree - wouldn’t you?

It seems that absolutely nobody who had enough money to own a hockey team was willing to own the team.  Potential owners wrote off Atlanta as a hockey market today (nobody is saying things cannot be different in 20, 30 or maybe 50 years or that if things had been run differently in the past we would be at a different point), but you know better.  Or at least you say you do.  The proof that you believe in Atlanta as an NHL market would have been for you to buy the team and keep them there.

Probably you do not have the money to do this.  That is why you can talk about how you think Atlanta is a good hockey market - you don’t have to put money behind the statement.  The fact that 100% of the people who have the money to do something about it unanimously voted with their money against the point that you are making should make you stop and think that your point isn’t accurate.

Posted by PuckStopsHere on 05/31/11 at 11:33 PM ET

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My unsolicited take on the “Southern Strategy” follows.

There are too many counterexamples to seriously argue that hockey can not, and will not be successful in “nontraditional” markets, just as there are too many counterexamples to the suggest that Northern markets will support their teams through thick and thin.

San Jose almost always fills their building. The Lightning generally draw well and have for most of the past decade, once ranking as high a second in overall home attendance the season after winning the Cup. Dallas, despite a recent dip in form, attendance and ownership troubles, didn’t have any problems playing to 90 percent and above capacity until this season. Even the Predators, after a long time being THE punchline for smug Northern fans, have slowly built their fan and corporate support and snuck above 16,000 per game this season.

Meanwhile, in the early portion of the last decade, two Original Six markets (Boston and Chicago) and another northern city with a strong hockey tradition (Pittsburgh) were among the league’s worst at the gate. The Joe was a ghost town during the Dead Wings era of the 70s and 80s. Even hockey-mad Winnipeg was a poor draw during the Jets’ final years.

Not surprisingly, the “nontraditional” teams that have had stable ownership, good management and some success are the ones more likely to be in better shape today, even if the teams are not currently very successful. A good example is Carolina, which has missed the playoffs four out of the last five years, but has also won a Stanley Cup and had some other deep playoff runs along the way.

PSH, your point about fans needing to support their teams through thick and thin, whether successful or not, is well taken. But generally speaking, I find that if give your fans some hope and show them your commitment to achieving success, they will come out to watch your games—even in nontraditional markets.

If you can give them some hope, something to cheer for, they’ll stick with you through ups and downs.

What fans won’t tolerate is sustained failure. You can say what you will about fans needing to support their team through the rough times, but the reality is that very few franchises can string together a decade worth of failure and still fill their arena. Toronto can do it. So can Montreal. Pretty much everyone else is subject to fluctuations in team success and currency values.

The Thrashers had terrible ownership that had been trying to ditch its investments for six years. In over a decade, they only made the playoffs once and didn’t win a single game. They drafted terribly. They traded terribly. They had given their fans no reason to hope.

And they still drew 13,500 per game last year. That’s better than what the Blackhawks drew in 2004, 2006 and 2007. That’s way better than what Pittsburgh brought in the year before the lockout (under 12,000).

So I think the rush to call Atlanta a doomed, failed market is premature. There’s no reason not to believe that they would be stable and growing if they had found even an average amount of success over the last ten years.

Posted by Sven22 from Grand Rapids on 06/01/11 at 01:10 AM ET

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2) Bill WIrtz was very happy to keep the Hawks in Chicago and likely had things set up so that he was making a profit despite low attendance.

But yes Bill Wirtz was killing the market had Chicago not been an established market he could have killed hockey in Chicago.

Posted by PuckStopsHere on 05/31/11 at 08:59 PM ET

The Blackhawks lost money last season though they had record attendance and won the Cup. Highly doubt Wirtz was bringing home a profit during those lean years.

Posted by blankspace6 on 06/01/11 at 03:56 AM ET

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blankspace

I highly doubt that the Blackhawks lost money last year.  Rocky Wirtz owns the arena and the team and he can divide revenue as he sees fit when he makes public statements about how much he made or lost (as opposed to official salary cap statements which we never see).  Bill Wirtz set things up so that a large amount of the Blackhawks profits are funnelled through the arena.  I suspect that continues in the numbers Rocky publically reports.

Posted by PuckStopsHere on 06/01/11 at 04:47 AM ET

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blankspace

I highly doubt that the Blackhawks lost money last year.  Rocky Wirtz owns the arena and the team and he can divide revenue as he sees fit when he makes public statements about how much he made or lost (as opposed to official salary cap statements which we never see).  Bill Wirtz set things up so that a large amount of the Blackhawks profits are funnelled through the arena.  I suspect that continues in the numbers Rocky publically reports.

Posted by PuckStopsHere on 06/01/11 at 02:47 AM ET

Rocky Wirtz said he knew the franchise “wasn’t doing well because I could see (Wirtz Corp.‘s) consolidated tax return.” But in October 2007, on his second day in charge, he learned through an internal capital call that the team was short $6 million to $7 million for that month’s payroll.

In a follow-up interview this week, Wirtz said that the Blackhawks ran out of cash several times last season. Each time, he received a memo, known as an internal capital call, in which the team requested money from Wirtz Corp., the Blackhawks’ parent company, to cover operating expenses. And at the end of the season, Wirtz said he double-checked that the playoffs did not cover those losses; the franchise remained in the red, the team’s accountant told him.

Disbelieve all you want. I believe you’re wrong. http://articles.chicagotribune.com/2010-07-30/business/ct-biz-0730-confidential-hawks-20100730_1_rocky-wirtz-wirtz-corp-bill-wirtz

Posted by blankspace6 on 06/02/11 at 02:32 AM ET

PuckStopsHere's avatar

Unfortunatley media claims like that are not reliable.  They a public reltations for the franchise that they need to stay on the good side with to maintain access.

Nothing in that article addresses potential splitting of revenue or costs between the stadium and the team.  Likely the team assumes all the costs, while the stadium piucks up some of the revenue from games and is likely paid by the team a rent.

The article is the kind of story teams freqently trot out as PR to justify increases in ticket prices. 

The only real guess we have about how much teams are making comes from the salary cap.  There was a $59.4 million salary cap this season.  This means $2.7 billion was made by the league.  Thus an average team made $90 million.  It is pretty safe that Chicago did better than average in their Stanley Cup year.  Can you possibly explain how the team spent in excess of $90-100 million (this is likely an under estimate of how much money they made), when the NHL salary cap was $56.8 million in 2009/10?

Posted by PuckStopsHere on 06/02/11 at 02:48 AM ET

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About The Puck Stops Here

imageThe Puck Stops Here was founded during the 2004/05 lockout as a place to rant about hockey. The original site contains over 1000 posts, some of which were also published on FoxSports.com.

Who am I? A diehard hockey fan.

Why am I blogging? I want to.

Why are you reading it? ???

Email: y2kfhl@hotmail.com