NHL Lockout: Would Relocating Struggling Franchises Help NHL's Bottom Line?

Nicholas GossCorrespondent IOctober 31, 2012

NHL commissioner Gary Bettman.
NHL commissioner Gary Bettman.Christian Petersen/Getty Images

Relocating struggling NHL franchises such as the Phoenix Coyotes would improve the NHL's bottom line and allow for the league and its players to have a larger revenue pie to share moving forward.

Part of the reason why we are in a lockout mess right now is because the league is trying to make changes to the previous system that will help teams like the Coyotes and Florida Panthers.

How long will the owners of large market franchises allow Phoenix or any other team's constant financial struggles to cost them millions of dollars?

It just doesn't make sense for the league's richest teams to keep propping up the struggling clubs when it's very unlikely that they will ever succeed in their current market.

Let's examine Phoenix's situation because it's the perfect example to why relocating teams will help the NHL's bottom line.

The league-owned Coyotes lost $24.4 million during the 200-11 season, according to Forbes, and there is little hope that the franchise can be financially successful long-term.

Former San Jose Sharks CEO Greg Jamison has been trying to buy the team for many months, but still hasn't been able to finalize the purchase. It's not hard to understand why Jamison or anyone else interested in buying the Coyotes would have trouble completing the deal.

The franchise annually loses money and doesn't play in a market that will allow it to generate enough revenue to justify its existence in Glendale. That's not a very attractive situation for any businessman, regardless of how deep his pockets are.

Take a look at where the Coyotes have ranked in attendance during the last six seasons.

Year Attendance % NHL Rank
2006-07 85.6 23rd
2007-08 84.7 24th
2008-09 85.0 27th
2009-10 68.5 30th
2010-11 71.2 29th
2011-12 72.5 30th

Why would anyone want to buy a hockey team with these attendance numbers, especially when you consider the fact that the franchise plays in a desert.

It's not like the Coyotes are failing to give fans a reason to buy tickets. The team has made the playoffs for three straight years and has a roster full of talented players, such as captain Shane Doan and young star defenseman Oliver Ekman-Larsson.

If the NHL wants to make more money as a league, then it cannot be putting more and more treasure into teams like the Coyotes, who, with all due respect, are a lost cause.

Moving the franchise to an area full of hockey fans who will willingly throw money at an NHL team to buy tickets and merchandise will help the league's bottom line. New arenas planned for Markham and in Quebec City should have an NHL tenant as soon as possible.

Doing this would allow the league to collect a relocation fee, and enjoy the benefits of putting a competitive team like the Coyotes in a market where they will be well-supported in good times and bad.

If the league, which reportedly has not made a profit in recent years (via Renaud Lavoie of RDS), wants to help its bottom line, league commissioner Gary Bettman has to give up on his mission to make NHL hockey work in Glendale.

League source indicated to me that the NHL as a whole is losing a significant amount of money.

— Renaud P Lavoie (@RenLavoieRDS) September 4, 2012

Another one said close to 240 million lost total, in the last 2 seasons.

— Renaud P Lavoie (@RenLavoieRDS) September 4, 2012

Despite having a franchise value of just $134 million, which is the lowest of any team in one of the four major North American sports leagues, no one has saved the Coyotes from league ownership since the team first declared for bankruptcy in 2009.

The best option for the Coyotes' long-term health is relocation to a traditional hockey market where they can thrive on and off the ice. When the Atlanta Thrashers were struggling on a yearly basis, the NHL allowed the franchise to move to Winnipeg for the 2011-12 season, where the team has done very well in a market that loves hockey.

There's no reason to make the other teams in the NHL give up a portion of their hard-earned revenues to help a team like the Coyotes that fails to to succeed financially year after year.

If the league really wants to improve it's bottom line, relocating franchises that struggle to earn money and draw fans consistently must be an option that is seriously considered.


Nicholas Goss is an NHL Lead Writer at Bleacher Report. He was also the organization's on-site reporter for the 2011 Stanley Cup Final in Boston. Follow him on Twitter.