It’s not all bad news. League revenues continue to inch forward last year because the league has a solid core of hockey markets than are showing healthy increases every year. Gary Bettman can take credit for a CBA that is driving the best talent to the big media markets. Boston and Chicago have been reborn and Los Angeles is a team that is clearly on the rise. The Rangers are making the playoffs and even the Leafs are starting to make some noise.
Also, one zombie franchise has been put out of business as the Atlanta Thrashers became the Winnipeg Jets. Ticket sales immediately put a tiny Canadian market near the top of the NHL middle class, a fact that probably turned a few more heads toward Quebec City.
If life in the NHL penthouse (and the rest of Canada) is very sunny, the basement is flooded, leaving several franchises underwater:
1) The Dallas Stars are nearly sold to Tom Gaglardi but the team is still headed to bankruptcy court because the purchase price won’t cover the team and arena debt. Lenders are going to take a haircut. I wonder if the Hicks experience teaches a lesson to those who have lent to sports teams. I wonder if money to invest in hockey teams becomes even scarcer.
2) Will the league ever be able to get rid of the Phoenix franchise? It is fairly obvious that a) nobody is prepared to buy the team for $170 MM without heavy subsidies from the city of Glendale, and b) the city of Glendale is finished with heavy subsidies. It is only going to write one more cheque for $25 MM to help cover losses this year. The gravy train is staggering into the station.
Is the league cutting the price for insider Greg Jamison? Does he have the money to sustain losses for a few years? What kind of a haircut is the NHL going to take? How much worse will it get if the team falters?
Does anyone care any more?
3) Dave Checketts in St. Louis pretty much has to sell because his principle investor wants out. They want $180 MM for the team they bought for $150 MM five years ago. According to reports they have received multiple offers but none that were close.
4) The Columbus Blue Jackets are threatening to leave the Ohio city if they don’t get a better deal on their arena lease. The solution? Get the city to buy the arena and rework the lease to deliver up $9.5 MM a year to the Blue Jackets.
(I sure get tired of the sportswriter response to this sort of thing. In this piece Bob Hunter knows the Jackets will end up with $9.5 MM a year and knows that the money comes from the taxpayer. But hey, it guarantees the Jackets will stay in town! Cheap, I guess.)
5) Nobody wants to build Charles Wang an arena, so the Islanders will continue to limp along losing money and credibility with every passing season.
6) The New Jersey Devils missed a $100 MM payment due September first. No problem here though – they are merely restructuring the financing while looking for a minority owner who wants to buy into a business that probably owes more than it is worth.
7) The Nashville Predators are not in financial trouble as far as I know, but they have been embroiled in a scandal surrounding the awarding of the concession contract. Apparently team executives lied to the city so that a company owned by Jeremy Jacobs (yes, that Jeremy Jacobs) wouldn’t have to compete for the contract, a contract they have held since the birth of the franchise.
I doubt if the scandal will have any legs – it’s too complicated – but it looks really sleazy. Crony capitalism at it’s best (or worst.)
8 ) In Florida, Dale Tallon signs several bad contracts just to get to the salary floor. Meanwhile, the Kings say they won’t pay Drew Doughty more than $6.8 MM and they wouldn’t accept a contract that is less than seven years. What kind of CBA produces that result? Unless Doughty gives up his right to UFA status at 25, Los Angeles will apparently let him sit.
9) The shape of a (temporary) solution to all these problems is emerging with the new NFL contract and the ongoing NBA lockout. Football players got 47% of revenues and the NBA is looking for a number a lot closer to that than the 57% NHL players get.
Knocking NHL players salaries back to the NFL percentage would cut salary costs by 17.5% and increase the owner’s share by $300 MM. The rich teams would get richer and the zombie franchises would be able to continue to lurch from crisis to crisis for another few years.
The players, I’m sure, won’t think much of the idea, but what can they do? Sigh.