The NHL Coyotes New Deal

May 7, 2012; Glendale, AZ, USA; NHL commissioner Gary Bettman (right) and Greg Jamison (left) speaks at a press conference regarding the potential sale of the Phoenix Coyotes to the Jamison Group prior to game five of the 2012 Western Conference semifinals at Jobing.com Arena. Mandatory Credit: Matt Kartozian-US PRESSWIRE

(note: I apologize not much is mentioned for Coyotes fans on the

series win, most of this was writter earlier in the day.  My most
sincere congratulations in the victory and best of luck against the
Kings)

 

I will kind of short and frank with this latest proposal from the Jamison group:  Until the Goldwater Institute vows to not pose a legal challenge against the deal, there is no deal.  Glendale was just recently forced to raise the sales tax in their valley suburb up to 9.5% and also to lay off 51 municipal employees.  The Institute is also investigating the current “arena management deal” which the city pays an outside group to manage the dates at Jobing.com arena.  All of this being said, and with no disrespect to the fans of the Coyotes, I do not believe this deal or any deal will happen that does not involve the team being moved out of town.

It should also be noted that Goldwater still has the city in court over a refusal to release documents involving previous sale attempts as well as those pertaining to the $25 million arena management fee that has been paid to the NHL over the past 2 seasons.  Futher, the city is mere weeks away from being sued by the NFL’s Arizona Cardinals for breach of contract regarding a parking contract between the team and city.  The city is paid to keep 6000 parking spots for the Sunday games, 3200 of which have been lost due to the construction of a shopping center.  The city has until early June to either make alternate arrangements or pay the teams for the damages.  Reports indicate that the team is seeking $67 million from Glendale.  If they have watched the news, they can get in line.  It seems there is nobody in the state of Arizona that has not somehow fallen victim to the ineptitude of this city council

Most parties have pointed to negative publicity as being the reason that the Coyotes can’t attract fans and therefore is why they are losing money.  This theory can be explained away when looking at the LA Dodgers and their current fan base.  They were in bankruptcy as well, yet they never lost the sheer barrels full of money that the Coyotes franchise has since this saga started.  The Bidwell family when running the Cardinals as though they were playing a practical joke on the fans still made the team work.  A new stadium and a wild card playoff birth entry that turned into an NFC championship banner have the group pretty excited.  That said, it’s hard to lose money in the NFL.

What most people today do not realize is something that happened some 4 decades ago that which helped begin all of this mess.  When the WHA became a viable threat to the NHL and their prosperity, it became the goal of a small faction of owners to make life miserable.  The WHA was the vehicle which cost the Maple Leafs the services of one Bernie Parent, being signed to a team in Miami that went bankrupt before they ever played a game.  He played a full season for the Philadelphia Blazers before getting into a contract dispute with them.  Upon re-entry to the league, Parent did not want to return to the Leafs, and was able to secure a trade to the Philadelphia Flyers.  Harold Ballard hated to WHA for driving labor costs up, as he and his cohorts for years were able to collude to keep the player salaries much lower than was justified.  When public disclosure of salaries was required, notice the improvement in the fortunes of the Montreal Canadiens, and the collective drop off the map of the Leafs, Blackhawks, Bruins, Red Wings and Rangers.

The NHL absorbed 4 WHA franshises after the league went belly up, The Winnipeg Jets, Quebec Nordiques, New England Whalers, and the Edmonton Oilers.  Of these franchises, all except Edmonton has found new soil to call home.  The Whalers now occupy Raleigh, North Carolina and have won a Stanley cup since leaving Hartford.  The dispute in Hartford was over the size of the market as well as the building that the Whalers played in.  The arena was housed inside a structure that was small and also part of a shopping mall.  The Hurricanes are a good draw for the most part, but the team is far from a financial success.  Peter Karmanos has been looking for the last several years for minority owners, a strong indication that he is growing tired of being the only person writing checks.

The Quebec Nordiques move out of Quebec was perhaps of all the moves the most acrimonious.  The team was not a model franchise on the ice, but they were very popular when there.  Many great players wore jerseys donning a Fleur-De-lis, including NHL legends the Statsny brothers and Peter Foresberg (famously acquired in the trade which sent Eric Lindros to Philadelphia) and Mats Sundin.  The major complaint was that Le Colisee was far too small and somewhat antiquated in terms of modern NHL buildings.  The Pepsi Center was a fantastic building early on, and the team formed a great rivalry with the emerging Detroit Red Wings, another team coming out of the dark ages.  Many of the high profile players that wore the Avalanche jersey have since retired or moved on to greener pastures, and the attendance has fallen down with it.

The Winnipeg Jets move to Phoenix was met with a dull roar.  The team could not compete in the economic climate that existed in the 1990′s, with the collective bargaining agreement requiring all players to be paid in US dollars.  The Canadian dollar was valued almost at half of US currency, and between this and the state of the building that the jets occupied, coupled with a lack of interested parties to own the team made a move less surprising.  While the current jets fans are near to my heart, they were not in attendance in numbers back in the Jets final years.  Since moving to Phoenix, the team has lost over $100 million dollars, not once turning a profit.  This has not been a short term problem.

From a personal perspective, I have absolutely no recollection of the WHA as it was gone before I was born.  The four teams the NHL absorbed were simply the tombstone left behind from the era that drastically expanded the league.  The irony in all that has happened since the merger is that the league was adamant about moving teams that could not improve the arenas which they were in, and now the league can’t hope to fill the buildings that the new teams are currently in.  Colorado, once a strong draw, has become another cautionary tale about the on-ice product in relation to the incoming revenue.  Buffalo, Toronto, Montreal, New York, Winnipeg (V 2.0), Philadelphia, do not require the same on ice component to sell the brand (although when Buffalo was in bankruptcy the fans tended to stay away).  The NHL needs a lot more of these places and a lot fewer “if the team was winning we would show up in droves” type of fanbases.  Easier said than done.

The trouble with the NHL right now is that they have been outed to the rest of the world.  Remember one of the opening scenes in National Lampoons Vacation when Eugene Levy famously swindles Clark Griswold into purchasing the family truckster?  This is the equivalent of what the NHL did to places like Phoenix, Miami, Dallas, Nashville, and Tampa.  Dallas and Tampa were better equipped in a sense because they had some success early on, the others simply had to fend for themselves.  The NHL didn’t properly emphasize that in a 30 team league, not everybody can win.  In a non-traditional market, when you don’t, they don’t come.

Or perhaps better to quote Eugene Levy “If you think you hate it now, just wait until you drive it”.  Nashville has emerged from multiple attempts to be moved out of town, and are actually a pleasure to watch.  Phoenix and Miami have tasted some success, but the idea that if the team is winning things would be better is misguided.  Phoenix is 1 game away from the conference finals, which by any standard is very successful.  They have had winning records the last 3 seasons and earned playoff spots in each.  They could potentially make the Stanley Cup final in three weeks, and still have lost money.  This is not bad marketing, this is not sour grapes, this is not jealousy, this is reality.  This team is not financially viable where they are, and it is not the fans fault.  They didn’t move a franchise that the NHL got saddled with after a renegade league went bankrupt into a building that has twice the capacity that it could fill most nights.  The fans didn’t drink the kool-aide about Glendale being the ideal place to locate a beautiful taxpayer funded building for a team that had never made a nickel prior.

I will reiterate what I wrote about 2 weeks ago regarding the situation in Phoenix, a lot of people are to blame, but the fans are truly the ones that will suffer from all of this.  Chances are they will lose their team in a matter of months, not years, and for any fan that is the worst nightmare.  And if anybody should be holding a press conference when it happens, it should not be Bill Daly and Gary Bettman.  As much as I despise the 2, they are simply the mouth-piece for an operation consisting of the most imbecilic rich people the world has ever seen.  Let the Governors that let this 3 ring dog and pony show go on come up to the microphone and explain when it happens why local citizens of Glendale will face fewer municipal services, increased taxes, and 51 layoffs in the near future.  Becuase the NHL governors did not want a Hamilton businessman to dictate the terms of a franchise relocation.

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