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The bottom line regarding franchise relocation

For those of you who’ve been thinking in red, white as royal blue as the sky over the Manitoban prairie, the CBC, Yahoo Sports’ Nicholas J. Cotsonika, ESPN’s Pierre LeBrun and even the Globe and Mail’s (!) David Shoalts and James Mirtle are doing their best to remind everyone that the machinations, egos and bucks involved are in fact quite complicated…

And the Canadian Press’s Chris Johnston provides an article which we may need to bookmark down the line, outlining the Board of Governors’ bottom lines regarding the sale and/or relocation of a franchise:

The league’s constitution requires any sale to be approved by three-quarters of the board of governors—which translates into 22 owners—before it becomes official. A majority of the board must also support an application for relocation. Winnipeg-based True North Sports and Entertainment is reportedly close to buying the Atlanta Thrashers and bringing them north of the border.

The league’s constitution includes specific language about the “transfer of membership or ownership interest in a member club” and spells out territorial rights for where each team plays. Section 36.1 of the NHL bylaws states that an application for relocation must be submitted by Jan. 1 of the year prior to relocation “unless a majority of the member clubs consents to a later filing date.” If the Thrashers are to move to Winnipeg before next season, that will need to take place.

The bylaws also include 24 points for the board to consider when voting on a possible relocation, including such things as whether the team is financially viable in its current location, how it has been supported by fans, if there is another potential owner who wants to keep it in its current location and whether a suitable arena already exists in the new city. Another key part of relocation is the payment of a transfer fee to the NHL “to reflect the goodwill developed by the league in the new location.”

The Thrashers sale price is expected to be around US$170 million, with $70 million of that going to the league for a relocation fee, according to a source.

Any expansion or relocation fees are not subject to the NHLPA’s 56-and-change percent take of revenues, so they are free and clear profits for the NHL.

Johnston also simplifies a team’s potential realignment—there won’t be any if the team is moved after January 1st, so the Nashville Predators, Detroit Red Wings and Columbus Blue Jackets would have a full year from this year’s Board of Governors’ meetings at the draft, which will be held on June 21st, to lobby their fellow governors, who have the final say in their franchises’ ultimate fates—and contractual issues:

Even if the Thrashers end up in Winnipeg prior to next season, the team would likely spend the year in the Southeast Division before potentially being shifted prior to the 2012-13 season.

One thing that won’t change dramatically is the makeup of the team. All contracts are binding—meaning any player that has signed a deal with the Thrashers will remain property of the franchise if it is moved north.

 

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Comments

MsRedWinger's avatar

Another key part of relocation is the payment of a transfer fee to the NHL “to reflect the goodwill developed by the league in the new location.”

Does anyone think the NHL deserves a fee for “developing goodwill” in Winnipeg?

Posted by MsRedWinger from Flori-duh on 05/21/11 at 09:21 AM ET

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About The Malik Report

The Malik Report is a destination for all things Red Wings-related. I offer biased, perhaps unprofessional-at-times and verbose coverage of my favorite team, their prospects and developmental affiliates. I've joined the Kukla's Korner family with five years of blogging under my belt, and I hope you'll find almost everything you need to follow your Red Wings at a place where all opinions are created equal and we're all friends, talking about hockey and the team we love to follow.