NHL May Yet Rue What it Did to Jim Balsillie and Hamilton

Steve ThompsonAnalyst IIIMarch 13, 2010

As NHL Commissioner Gary Bettman leads the NHL into its latest war of revenge against Jerry Moyes for trying to recoup his losses by attempting to sell the Phoenix Coyotes to the outlaw buyer, Jim Balsillie, it is well to remember that his triumph in the courts over the now three time loser didn't change one ugly fact: the Phoenix Coyotes still lose huge sums of money every year.

Despite all the economies that the NHL has instituted, the Coyotes are projected to lose $20 million this year, down from the $35 million in Jerry Moyes last term.

They also lead the NHL with the worst attendance of under 12,000, despite some fans' claim that attendance is getting better because the team is playing better.

How much of that "increased attendance" is due to promotional gimmicks and ticket discounts can't be measured.

Bettman claimed that Moyes and Balsillie went outside the NHL's constitution in attempting to move Phoenix to Hamilton.  On that issue, he can't be argued against.

But the cost of winning has been high and still climbing.

To stop Balsillie and Moyes, the NHL paid $140 million to own and run the team because no credible owner came forward to bail them out.

The NHL is not going to continue to run the team at a loss forever.  There is speculation that there is an unofficial deadline of the end of the current season in June for a credible owner to step forward and keep the team in Phoenix.

After that the NHL will consider its only other two options: the humiliation of contracting the team, or selling the team to an owner who will relocate it.

The NHL is hoping the only bidder that has made even a partial commitment to Phoenix, Ice Edge, can work out a deal with the city of Glendale that has a horrible lease chained to the team.

No other bidder with a firm commitment to Phoenix has come forward, and Ice Edge showed how much faith they have in Phoenix by making its offer contingent on playing five home games a year in remote Saskatoon—perhaps a prelude to moving the team there permanently.

But even on the option, moving the team, the NHL may find itself with its back to the wall. 

To that end, Bettman has met with the mayors of old franchise holders Hartford, and Quebec, stating that the NHL is willing to return if they build state-of-the-art, NHL-size arenas that are fronted by credible investors.

That explains why the NHL has kept a low-key approach to Winnipeg (despite the efforts of the pressure group the Manitoba Mythbusters and similar local writers to play up every positive utterance by somebody in favor of the Jets coming back, even though it's only a crumb, to gargantuan proportions).

They don't like their small arena and no credible investor has stepped forward to front a bid, though a member of the acceptable Thomson family is said to be associated with a potential offer.

Kansas City was supposed to be the potential new home for the Islanders.  But an exhibition game which drew under 10,000 fans in an 18,000 seat arena has quelled talk about an NHL return.

That turn-out also doesn't bode well for cities like Houston, Las Vegas, or Oklahoma City, markets the NHL would love to establish a team in.

Cities in the northern United States which Bettman also studiously ignored like Canada when he was expanding the league, specifically Seattle, Milwaukee, and Portland, where hockey does have foothold, have shown no interest in getting a team.

As for Hartford, soon after meeting with Bettman, Mayor Eddie Perez was arrested on bribery charges though he remains the mayor.

There have been petitions for both a new arena and the return of the Whalers. Over 10,000 fans are said to have pledged to buy season tickets.

But no credible investors have stepped forward and no concrete action has been taken to build a new arena.  Talk has died away.

There remains Quebec.  From October to December there was a flurry of concrete activity.

Quebecor, a first class investor that was unsuccessful in buying the Montreal Canadians agreed to front a bid to get the Nordiques back.  Then the mayor, Regis Lebeaume met with Bettman who probably gave him an unofficial promise of a returned team if a proper NHL-size arena is built.

The mayor subsequently announced the city would pledge $50 million towards a new arena, said to cost $400 million, and called on the Provincial and Federal Governments to split the remaining $350 million cost between them.

Finally he announced that he was hiring an engineering firm to conduct a $4 million feasibility survey to determine if the Nordiques can be revived and solvent for the long term with a new arena.

Then maddening silence.

The use of public money to fund a facility that is essentially for a private sports enterprise will not go down well with the rest of Quebec and Canada, given the record of untrustworthy sports franchise owners.

The mayor has also said that the new arena is also part of a future Winter Olympic bid so that the rest of the province and the country will get behind it and approve the funds.

Not many people are buying it.  If Federal money were used, it would provoke outrage and possible political repercussions, certainly in Manitoba, which got little Federal funding for its too-small arena and new CFL stadium.

Canadians are willing to spend public funds on international sports events like the Olympics and the Pan Am Games, but not for arenas for a league that many see as anti-Canadian.

The solution is to acquire more private funding.  That is how the current arenas in Montreal and Toronto were built.  But during the long silence there has not been any announcements of new investors joining Quebecor in its bid or to build a new arena.

If Quebec had enough funds, there would no need for a feasibility study.  Talk would be about where to start building.

Then on March 12, it was reported that Quebecor's efforts to bring the Nordiques back was on track, praised the fact that a survey was being conducted, but gave no information about when it would be completed.

Marcel Aubut, the former president of the Nordiques said that the project remains a long-term one.

That's a far cry from what the mayor wanted when he hoped that a new arena would be built by 2012.

All this proves is that Jim Balsillie was right.  That Hamilton, Ontario is the best place to put a relocated or expansion NHL team in North America.

They have a first class arena that currently is the same size as some of the smaller NHL arenas that can be expanded to over the NHL median of 18,000.  Luxury boxes can be expanded to 200.

They have a wealthy market of several million people stretching from Niagara Falls to Owen Sound and from Mississauga to London.

It has been speculated that a Hamilton franchise could be the third most valuable in the NHL, behind only the Leafs and Rangers.  No wonder Balsillie wanted a team.

And its obvious why Toronto and Buffalo want to keep Hamilton out.  They want the rich southern Ontario market all to themselves.

Politics, not lack of fan support, nor a bad sports arena, nor lack of credible investors is depriving Hamilton of top level professional hockey.

Hamilton should have had a team nearly 20 years ago when chief investor Tim Doughnut fumbled away the city's chances and Ottawa got the promised expansion team instead.

Since then, the NHL has ignored Hamilton and pretended that it was minor league despite it hosting major events like the Briar, the Canada Cup, and the World Junior Hockey Championship successfully.

Meanwhile the NHL continues to lose huge sums of money in Phoenix and other franchises like Florida, Atlanta, Nashville, and the Islanders are said to be vulnerable too.

No credible owner has stepped forward to bail them out except the questionable Ice Edge bid.

The NHL may have got rid of Balsillie but it did not solve its franchise problems. 

Hamilton could solve one of them right away, but the NHL likes to pretend that it is located on the moon.



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