NHL facing glut of potential for-sale teams
Gary Bettman earns about $8 million a year as commissioner of the
NHL. That's as much or more than roughly 98.6 percent of the
players earned last season. But then again, Bettman probably works
harder than the vast majority of players whose job it is to show up
at the rink and give their best for a couple of hours each day.
You see, a big part of Bettman's job is to ensure the league
has as much stable ownership as possible. That way, franchise
values remain high and the fellows who write the checks are happy.
If there is a sag in ownership in a market, Bettman is intimately
involved in every aspect of securing a new owner.
Even if it means battling so hard to keep the Phoenix Coyotes
that even when you win, you lose. The ownership situation, as we
all know, is a complete mess in the desert, so much so that Ice
Edge is back in the picture and could be the new owner of the team
if the City of Glendale agrees to a number of concessions that
would cover Ice Edge's operating losses.
Nice deal if you can get it, eh? Build a rink for a team,
then get held hostage by it. As was first reported by THN.com in
March, Phoenix faces the prospect of caving to NHL/Ice Edge/Jerry
Reinsdorf or losing their major tenant to Canadian billionaire
David Thomson, who already has a memorandum of agreement to buy the
Coyotes and move them to Winnipeg if a local solution can't be
found.
(THN.com has been told, however, that at least if Ice Edge is
involved and gets its concessions, its cockamamie scheme to play a
handful of games in Saskatoon to offset the loss of revenues will
be scrapped.)
But you have to wonder how many more proverbial rabbits
Bettman can pull out of his hockey helmet. I mean, you can only
stumble over so many Jeff Vinik's in the world and convince them to
risk their wealth on the shaky prospect of NHL ownership.
Bettman and Vinik met at this year's Winter Classic and in
the next few months, Bettman convinced Vinik — a hedge fund
manager from Boston and a part owner of the Boston Red Sox —
to buy the Tampa Bay Lightning. Now that Vinik is in control of the
Lightning, he's getting a nice glimpse of what a mess things are
there. In fact, sources maintain that he has offered the CEO job to
five people and they have all turned him down.
If rumblings are correct, however, Bettman is going to have
to come up with a lot more Jeff Viniks in the near and long-term
future if he wants to clean up all the messes that exist. Depending
upon with whom you speak, almost one-third of the teams in the
league either is or soon will be put up for sale. And some of the
markets are surprising.
We all know about the Coyotes, the Dallas Stars and the
Atlanta Thrashers, but if speculation is to be believed, Bettman
will have to brace himself for a slew of other owners who will be
looking to get out of NHL ownership in the next little while. And
if it's true, it also proves there are even billionaires out there
who get tired of watching their cash continually get sucked into a
money-losing vortex.
The first spot is Los Angeles, where it's believed the Kings
will likely go up for auction sometime in the near future. We know
what you're thinking. That's to pave the way for Kings owner Philip
Anschutz to move a team into his building in Kansas City, but it
turns out he's apparently just getting tired of losing money.
The other spot where there are rumblings of an ownership
change is St. Louis, a team that appears to be on the right track
after bottoming out a couple of seasons ago. The Nashville
Predators are looking for a cash infusion in the way of investors
and there are signs the Carolina Hurricanes and even the New Jersey
Devils might be for sale in the near future.
The problem is that almost all of those teams lose money.
That, in and of itself, is a problem, but business people also like
to talk about "cost of capital," which is the cost you bear by
having your money tied up in ventures that don't make anything. So
assuming the cost of capital is 10 percent, an owner who has his
money tied up in an NHL team is losing the opportunity to use that
money to invest in something that will give him a better return,
plus he has to absorb the operating losses, which, in many cases,
are between $20 million and $30 million a season.
Another situation that bears watching is the New York
Islanders. Reports that owner Charles Wang is ready to walk away
from the franchise appear to be a little premature, but there is
little doubt he is running out of patience. The Lighthouse Project,
which would have given the Islanders a new arena and revitalized
the area, looks like it will be scaled back considerably if it even
sees the light of day.
Wang has lost millions over the past 10 years and might not
be willing to wait another 10 years to get a new building. Waiting
in the wings is New York Mets owner Jeffrey Wilpon, who could buy
the team and move it to a new arena near the Mets' new Citi Field.
So, if Bettman has dark rings around his eyes the next time
you see him, you'll know why.
Ken Campbell, author of the book Habs Heroes, is a senior
writer for The Hockey News and a regular contributor to THN.com.
His blog will appear Wednesdays and Fridays and his column,
Campbell's Cuts, appears Mondays.
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