Kukla's Korner


Waiting To Move Forward, In And From Phoenix

In six days, legal proceedings will finally get started, even though the ‘control over bankruptcy declaration’ issue is hardly the game-changer that will gather the masses. It will only gather the Canadian media.

What has happened already is that Pandora’s box has effectively been opened, and howling out of it have come a million questions that need to be answered. Answered not just by Balsillie, Moyes, and the NHL, answers that affect not only this potential sale, but answered by a host of stakeholders, answers affecting the future of the League as a whole.

That we are in the middle of a recession highlighted by subprime loan collapses is no small detail. The dream of owning a home was sold to countless people who couldn’t afford it thanks to deceptive introductory rates, and then the repackaging of those loans for sale around America and much of the world spread the net for the impending collapse.

Is it so hard to see parallels there with the National Hockey League?

Much as blame could be laid at the feet of Moyes for some of the team’s problems in Phoenix, can the owners and the League that approved the sale and relocation escape blame? That teams have been sold to individuals under criminal investigations, along with other troubled turns, will not show a League that does due diligence, and the subprime loans have set the stage to blame both parties for looking the other way.

Ignoring for a moment what might go down as the disastrous stroke of planting the arena in Glendale rather than Scottsdale (don’t worry; understanding the ‘dale difference took me a while, too), and the biggest assertion against ownership will likely be that they didn’t ice a successful team, a team worth paying for, worth cheering for.

In a League so proud of its rules, that just isn’t one of them. Can fans or other owners blame Moyes, who has reportedly lost $300 million since 2001, for not wanting (or being able) to finance an additional $10-15 million per cap season (or more before the lockout)?

It’s been reported that Reinsdorf’s offer remains, but allegedly only in the neighbourhood of $130 million. It pays off many creditors, but what do other owners think when they realize that it could be Moyes’ equity that goes unpaid, possibly alongside some of those League loans they indirectly financed? What would they think of losing their entire investment if their in situ team does not elicit bidding wars? What will they think if they find out that it only took a comparatively small loan from the League to hand over all control of their asset? Could the advances that many clubs are seeking, in itself a form of loan, ‘unchain’ them from their asset? How long would they themselves be willing to support through League coffers the Coyotes or any other ‘unchained’ franchise?

Could Reinsdorf’s offer even work? Before all this started, the Arizona Republic reported

Less than a quarter of Glendale voters surveyed said they would support spending taxpayer money to keep the financially struggling team from leaving the city’s Jobing.com Arena, the poll says.
When asked whether Glendale should give the Coyotes $3 million to $15 million each year to keep the team local or to allow the team to move out of state, 72 percent said to let the NHL team leave.

Opposition to the team grew when asked to compare “the prestige of having a pro hockey team in Arizona” with Glendale’s spending “millions of dollars in local taxpayer subsidies to keep the Coyotes here.”

Seventy-six percent said the prestige would not be worth it.

Damning numbers? Perhaps not when the survey only asked 300 voters, and allegedly left out many ramifications of the Coyotes’ departure, but this all came in advance of Balsillie’s and Moyes’ actions. Another article suggests that the Goldwater Institute will put its 2-0 U.S. Supreme Court record on the line should the city choose to use taxpayer dollars in any way to support the team.

Even if Balsillie wins, the list of affected parties will only grow. Contacting the local OHL and AHL teams, I received a couple responses. The Guelph Storm’s Director of Business Operations Matt Newby felt that the team “would force us to strengthen what we already do well and that’s providing quality family entertainment at an affordable price. That would allow us to further differentiate our game from the NHL’s corporate driven product.

“Media coverage (would probably be affected). Throughout the year the Storm is highly visible and our local media have made a conscious decision to put local teams first, but with a local NHL team they might choose to lead with them.

“Corporate sponsorship is another area because in the past national sponsors have worked with OHL teams across Ontario, excluding NHL markets. Sometimes it’s a regional budget issue and ultimately we’re all trying to attract the same dollars. And third, to a much lesser degree would be general attendance. The OHL brand is very established here and we spend a lot of time and effort to better Guelph with programs such as minor hockey partnerships and school programs.”

Hamilton certainly would not have the same draw as a team situated closer, perhaps in the Kitchener-Waterloo region, but what about Copps Coliseum’s current tenant? According to a Hamilton Spectator article, the Bulldogs’ lease allows them to be booted from the arena if an NHL team comes to town.

[Owner Michael Andlauer is] very disappointed, however, that he hasn’t received so much as a courtesy call from Mayor Fred Eisenberger or any official from the City of Hamilton. He says that shows great disrespect for everything the Bulldogs have done for the community.

What is it that irks so many people about Balsillie? His current moves may be maverick, but he tried less drastic measures with Nashville, and it was the League which added last minute deal breaking stipulations in the Pittsburgh agreement, forcing the team to stay, the League in fact starting the maverick moves in the first place. Those two public deals are the only ones that truly made it far, and Balsillie has gone down the road privately but obviously never successfully before. Every time he’s been rebuffed, he has come back to try it again, and stepped it up at each further League-imposed roadblock.

Money should not be the prime factor in any decision, but does the League really want to keep a billionaire who is so hockey obsessed that he was brought in to play in the IIHF Champions Alumni game at the Worlds last year in Quebec City? An owner for who the cap ceiling would be the only concern? An owner who, in this instance, would very likely turn one of the lowest drawing teams into one of the most exciting and profitable ones?

In reality, this is gut check time for the League. They might well be able to prevent such incidents from occurring in the future (and with all the teams currently having financial troubles or ownership woes, such incidents could be just gearing up), but it might mean the dreaded reality of admitting that NHL franchises are not licences to print money (insert gasp here). It might even behoove the League to look to an unpleasant act for guidance.

Joining the NHL is very much like a marriage, and when you can’t know everything about your spouse, you hope for the best, but plan for the worst. Yes, some marriages need (and many get along fine with) the dreaded prenuptial agreement. Perhaps one where owners recognize that in taking over a team, or moving it, or starting a new one, they should be able to ‘print money’ enough for the first few years, and be able to waive their right to revenue sharing. Or perhaps one that requires a team to go through therapy of putting their best foot forward for a number of seasons, whether through a minimum salary and/or standings cutoff that, if maintained for a few years with no profitability to be found, finally allows for the dissolution of the match that just was not made in heaven.

Rules and reality might seem like the enemies of the state, but these are not akin to suggestions that only four defenders ever be allowed in their own end on the rink; rules, regulations, and dealing with reality are the only prudent way for the League to run itself. After they’ve been muddling through the issue, you have to wonder if they can step up and answer to what they’ve unleashed, and if at the bottom of the box they can find hope to move forwards with.

Filed in: NHL News, NHL Rules, NHL Teams, | SENShobo | Permalink


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About SENShobo

Native of Northern California.  Hockey fan since 1998... sort of... there's a hiatus in there that I still can't explain.

I want to know about anything and everything related to the sport and the spectacle.  I watch, I react, I write it down.

My interest in the Sharks was initially a matter of geographic convenience and regional loyalty because that seemed to be how it worked.  I had no prior interest (at all-- AT ALL) in professional sports of any kind.  When I met hockey, it might have set off a chain reaction of general sports fandom.  It hasn't, I don't think it will.  At all.

Since then, that interest developed into full blown (mostly sort of usually almost completely) exclusive loyalty to the Sharks.

I started blogging a couple years ago on wordpress. I still occasionally put things there that I don't think fit here because they are not about the Sharks. Wherever my words wander, here on Kuklas Korner, they will (usually) hang on to a teal thread.

I can be found in cyberspace on Twitter @petshark47, or emailed at talkingstick@petshark.net