Another "Southern Belt Is A Failure" Article

Hamilton Tigers

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Just playing devil's advocate - could it be possible that the ownership groups were the only options available to the BoG at the time of these franchises' inception? Was there a lineup of buyers to place teams in the failing markets? I would point at the debacle in Phoenix to show that there is not a large base of potential owners who are willing to dump money into the NHL in these markets.

Just a thought. Look forward to being refuted if the facts prove my opinion wrong.

A recurring argument for the Atlanta situation is, that it's the ownership and not the market to blame for the failure.

Could very well be, but I don't think we can really know. Why the bad ownership?

Could it be, as dobiezeke ponders that there just aren't "proper" owners willing to invest in non traditional hockey markets? Sounds like a reasonable line of thinking.


What I dont know is who, if anybody, got passed up in the process that in retrospect would have been a better choice.

I emphasized "if anybody" because if there were no better options, then it does fall into dobiezeke's line of thinking. But, as you say, "Who knows?"


Also interesting is that once the Thrash sale goes through(to whomever) only one of the four expansion teams will still have their original owner(although Leipold traded one for another)

Hmmm...interesting fact. I wonder: "How" did the owners leave? Richer, or poorer?
 
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dronald

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A recurring argument for the Atlanta situation is, that it's the ownership and not the market to blame for the failure.
It's a great excuse for the people who are actually fans of the Thrashers, but then I'm just puzzled that True North doesn't buy the Thrashers and keep them in Atlanta...
 

Hamilton Tigers

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It's a great excuse for the people who are actually fans of the Thrashers, but then I'm just puzzled that True North doesn't buy the Thrashers and keep them in Atlanta...

Methods aside, there's also Balsillie who was willing to pay what? $242m + plus millions to the COG for a team in Hamilton?

A perfect example of two, deep pocketed, owners who no doubt are "hockey people" and would be great franchise owners.

No such prospective owners for the non-traditional markets.
 
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Pantokrator

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My dentist has large posters of all the Preds players in the office. She's also the team dentist. She is probably rich. Do you think that qualifies her to be an owner?

;-)

If she has the money to suck up losses and doesn't mind those losses, then yes. The problem is when the owners think they will make money with the franchise and expect to do so. There are not many franchises that are going to make a lot of money, so you need owners who don't care about the bottom line and can handle losing millions each year.
 

Jumptheshark

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Terrific article! And the absolute unvarnished truth!

sorry--disagree

Both the canes and TB have won and if you win you gather fans and support

in ten years if the peg has that same record the thrashers had--lets see how full the peg arena

people dont spend money to watch losing teams

and before you bring up the oilers

oilers went to the cup(the winning side of the argument) and for 3 years they lived off of that and now they are racking up prospects and top picks and even though they are losing the fans see the light at the end of the tunnel

with the thrashers they never won and don't have the prospects to show fans the end of the tunnel
 

Adz

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If she has the money to suck up losses and doesn't mind those losses, then yes. The problem is when the owners think they will make money with the franchise and expect to do so. There are not many franchises that are going to make a lot of money, so you need owners who don't care about the bottom line and can handle losing millions each year.

I don't think those kinds of people exist in Tennessee. We pay attention to things like "losses" and we mind them. I guess she'll just have to stick to the drilling business.
 

KevFu

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Funny thing is that this is exactly what happened. Tampa Bay set up shop in 1992, and their IHL affiliate was the Atlanta Knights. The Knights were enormously popular and had a huge following, then went away to clear the way for the Thrashers.

In fact, let's see here...

Houston had the Aeros, who were hugely popular. Houston nearly got the Oilers. Columbus had the Chill (ECHL), who were affiliated with Chicago (NHL) and Indianapolis (IHL). The Chill only had about 200 sellouts in eight seasons, including 91 straight. Nashville had the ECHL Knights, who were popular. And so on.

This may be a shock, but not everyone in an NHL market that's added a team in the last 20 years is a complete rube that doesn't know what they're watching. The sport isn't the problem and the market isn't the problem.

Oh, I'm totally aware of the roots of minor league hockey in markets which moved up to NHL hockey. That wasn't my point though. The point was that you needed to have Tampa be successful, then add Miami. When Miami's successful, you add Charlotte. When Charlotte's successful, you add Atlanta. (the order doesn't matter, what matters is you only have ONE GROWING MARKET IN EACH CONFERENCE AT A TIME).

As I've said dozens of times over the last two years: "When you add one or two members to your club of about 21, you grow the club; When you add 10 people to your club, you CHANGE the club." That's what the NHL did. They didn't GROW, they CHANGED.

The other main reason to bring new markets in SLOWLY is because if you wait until the last newbie has success, the next new guy HAS A BLUEPRINT to follow.


There are two variables that are overlooked far too often.
1) Options. Given the choice between watching a successful team or an unsuccessful one, people prefer the successful one. If someone is a fan of football and hockey and they can watch a successful football team or a feeble hockey team, what's that going to do to attendance?
2) Mediocrity. Plenty of people will see a good team or an average team, but no one will spend huge amounts of money to watch a team that they know is not only rebuilding or on the way down, but has no hope for a few years. Toronto is the exception that proves the rule on that; frankly, the idea that "Toronto does it, so the fact that (American city) doesn't is proof that it's not a hockey market" is a little bit like saying "I don't care that this player had 700 goals and 1500 points in his career; he didn't hit 895 and 2858, so he's not a Hall of Famer!"

The proof is in the pudding. The Minnesota North Stars had a year averaging less than 8,000 attendance; Chicago post-lockout had games of around 8,000; Pittsburgh in 2003-04 had a year of less than 12,000; and so on. That in is no way a reflection of whether or not that market can support hockey or an NHL team.

Maybe people would stop lumping Columbus in with Atlanta and Phoenix if the hockey team in Columbus wasn't about to become an economic disaster on par with the ones in Atlanta and Phoenix. I don't think map skills come into the equation anywhere.

I'll address these two things together, because they ARE linked. Unsuccessful, struggling teams happen EVERYWHERE. It isn't geographic. There only difference is a "Southern" team that's struggling is called a failure; a Northern team that's struggling has fans that will "Come back" when they start winning.

And yes, this isn't a market issue. The idea that a market the size of those with major pro sports teams can "fail" is absurd to me; Hockey can't fail. It's awesome. If large groups of people don't embrace hockey, it's because they haven't been properly introduced. That's not the failure of hockey, or the market. It's the failure of the people in charge of the introduction.

The only "market failed" case I could accept would be a market that simply doesn't have the cash to financially support a team.

Like (A) an NHL team in Caspar, Wyoming. That would be a failure. Because you expected a city of 75,000 with a per capita income under $20,000 to support a major pro sports team. That would be a "failure" because it was straight up a stupid decision.

Or (B) an actual city is too small to support it's NUMBER of major pro sports teams. Cleveland, for example, probably doesn't have the disposable entertainment dollars to support the Browns, Indians, Cavs... AND an NHL team.

There's a REASON the NHL is in Columbus and not Cincy (MLB, NFL) or Cleveland (NFL, MLB, NBA).
Nashville has NHL/NFL; Memphis has NBA
Tampa has MLB, NFL and NHL; Orlando has NBA
And a half-dozen other examples.
You get the idea.

Just playing devil's advocate - could it be possible that the ownership groups were the only options available to the BoG at the time of these franchises' inception? Was there a lineup of buyers to place teams in the failing markets? I would point at the debacle in Phoenix to show that there is not a large base of potential owners who are willing to dump money into the NHL in these markets.

Just a thought. Look forward to being refuted if the facts prove my opinion wrong.

Going back to the whole "Sudden expansion" was more of a failure than "Southern expansion" thing... When you are adding nine teams in 10 years, you're willing to give teams to ownership groups that aren't very strong because you're hell bent on expanding.

The potential ownership groups emerging NOW look a lot stronger than in the 90s when the NHL had all these teams to add and were looking for owners.

An existing team is going to cost you $160m to $250m. That's basically twice as expensive as an expansion team ($80m for ATL, CBJ, MIN, NASH). That weeds out owners who wouldn't strong owners.

Methods aside, there's also Balsillie who was willing to pay what? $242m + plus millions to the COG for a team in Hamilton?

A perfect example of two, deep pocketed, owners who no doubt are "hockey people" and would be great franchise owners.

No such prospective owners for the non-traditional markets.

Well, as I said before, JB was willing to pay a discount rate for a team in Hamilton, but has never attempted to buy a Hamilton franchise at it's full value.
His offer was $213 million for a team in Hamilton; when a team in Hamilton is valued anywhere between $275m and $315m, not including territorial rights to Buffalo/Toronto. He was trying to land a Hamilton team for 40 cents to the dollar of what it would realistically cost to get a team in Hamilton. I will dispute any claim that JB is an owner like George Stienbrenner or Sheikh Mansour bin Zayed Al Nahyan until JB pulls out the checkbook and says "Tell me what it costs, and I'll write the check."
 

JMROWE

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I have no doubt in my JB. is willing ot put his money where his mouth is to get what he wants money is no object to him for pete sakes the guy is worth bettwen 2.5 - 4 billion dollars . I belive right now he is doing everything within his power to get back in the good graces of the NHL. if he has not done so already by signing a big sponsership deal with the NHL. last year . It would not surprise me if he has not been taking to NHL. already regarding the coyotes , some other sad sack franchise or an expansion franchise for southwestern ontario (Hamilton) .
 

Metzen

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I didn't play until I was 45. I was terrible. Still am. I had no illusions of NHL greatness, I just wanted to stay upright til the shift was over. Put a goal in the net? That was not happening. The guys were sweet to me since I was an old lady trying to play, but I determined I was much more helpful to my team by staying on the sidelines as cheerleader and beer maid.

Know thy limitations.

That said, a 35 year old friend of mine took to the game like he'd been playing all his life and he'd never even stood up on skates before.

?
 

PuckInTheNards

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Somebody remind me... how did Phoenix get its team? They relocated from somewhere... never mind, probably another failing sun belt market. Have the Stars always been in Dallas? No?
 

rj

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As I've said dozens of times over the last two years: "When you add one or two members to your club of about 21, you grow the club; When you add 10 people to your club, you CHANGE the club." That's what the NHL did. They didn't GROW, they CHANGED.

There's a forum on BigSoccer that is called MLS Expansion discussing potential markets. The tagline for it at least used to be "We're not the NHL, we're not the NHL..." :D
 

PredsV82

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Oh, I'm totally aware of the roots of minor league hockey in markets which moved up to NHL hockey. That wasn't my point though. The point was that you needed to have Tampa be successful, then add Miami. When Miami's successful, you add Charlotte. When Charlotte's successful, you add Atlanta. (the order doesn't matter, what matters is you only have ONE GROWING MARKET IN EACH CONFERENCE AT A TIME).

As I've said dozens of times over the last two years: "When you add one or two members to your club of about 21, you grow the club; When you add 10 people to your club, you CHANGE the club." That's what the NHL did. They didn't GROW, they CHANGED.

The other main reason to bring new markets in SLOWLY is because if you wait until the last newbie has success, the next new guy HAS A BLUEPRINT to follow.

well, of the four new teams added in the last round, only Nashville was a truly "new" market.

Minny and Atlanta had teams before, and Columbus was a new NHL market but was in a region where hockey wasnt exactly "new"
 

dobiezeke*

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well, of the four new teams added in the last round, only Nashville was a truly "new" market.

Minny and Atlanta had teams before, and Columbus was a new NHL market but was in a region where hockey wasnt exactly "new"

When it comes to ownership, the markets are irrelevant - were there sound owners for the markets, or did the NHL accept the first bid given? History has shown that multiple owners were less than acceptable. If multiple bidders existed, why did the NHL choose the owners that would eventually turn out to be duds? Two choices: The owner was able to present a plan that was acceptable to the NHL even though it was unobtainable, or the NHL took the first viable bid to ensure that they were able to place the franchise in an area that met there needs.

Based on the present state of the NHL and the teams bleeding/up for sale, I would suspect that it was a mixture of both options. Alas, we now have multiiple teams for sale by owners who have realized that NHL team ownership is not a profit making venture...
 

KevFu

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well, of the four new teams added in the last round, only Nashville was a truly "new" market.

Minny and Atlanta had teams before, and Columbus was a new NHL market but was in a region where hockey wasnt exactly "new"

I'd agree. But while ATL, MIN, CBJ and NASH weren't all new markets (oh, and this also goes in the face of the "Bettman is the devil" crowd because ATL, MIN had teams before and he restored their teams, and CBJ and NASH were teased with relocating teams, HAR and NJ respectively), we still had SEVEN markets that weren't slam dunks to be instantly successful.

Let's face it... OTT, MIN, COL, and ANA... not really a concern. The first three are slam-dunk hockey markets. ANA was an extension of LA, which had the Kings for years.

The other aspect is that TB, OTT, FLA and ANA were awarded teams in 1990. The NHL DID plan ahead. But they didn't see four relocations coming.

There was nothing to do about SJ, TB, FLA, PHX, DAL, CAR all being new markets together because of the relocations.

But there WAS something that could be done about adding the four more teams. Not to go all revisionist on you, but...

As we stand now, SJ, TB, ANA are successful. DAL we had as successful until the Hicks thing, so that's fine. We have FLA and CAR who are not quite solid footing, but not in crisis mode. And PHX in crisis mode. We never doubted COL and OTT for a second.

So after the lockout, THEN you say its time to expand again. You then award teams to two of: MIN, QUE, WIN (first two to build NHL arenas). And lo and behold, PHX is in trouble, the third place winner of them gets the Coyotes.

Then it's "go to 30" time and you have ATL, NASH, CBJ, HOU, HAM, Seattle and Portland to choose from.
 

Marv4Life

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Of course, but I think it'd be more viable to have two NY/NJ teams rather than three.

Plus you don't know whether that's true. Only time will tell, however, the Devils are a good example of a local team who couldn't sell out consistently (even during the playoffs) despite being a contender for two decades.

I know I'm late, but if you did your research you'd know the Devils have sold out every playoff game since their new arena opened in 2007. And so what if they haven't sold out consistently? Neither do the Ducks and Hurricanes, should they move? The NJD makes more money than 2/3rds of the league, not to mention they're one of the better box-office draws. They just haven't done anything special since 2003. The bland product on the ice doesn't justify the insane ticket prices along with poor marketing. Who wants to spend $60 to sit in the upper deck to watch a "boring team who can't score goals" take on the NY Islanders, the Florida teams or the Minnesota Wild on a weeknight? Are you kidding me?
 
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JMROWE

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I belive with the thrashers moving to Winnipeg next season is the start of a mass relocation by the NHL. over the next 5 - 8 years to stronger markets plus 2 more expansion teams will be added as well .

Winnipeg *
Hamilton
Quebec City
Kansas City
Houston
Seattle



* Has a team now
 

MAROONSRoad

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This is NOT the case. For every American reading this thread: You CANNOT find outdoor rinks all over the place in EVERY Canadian City.

For example, Vancouver doesn't have any, and hockey is obviously pretty popular there.

No, but Vancouver is part of a country where hockey is the #1 sport for various reasons.

The key issue is really media coverage and national sports culture. Hockey is covered 24/7/365 days a year in BC on Canadian TV networks and on radio, etc. If I am driving on Vancouver Island and turn on the radio in November, I might get an update on the Lightning vs. Hurricanes game in progress as part of the news, along with the BCHL and WHL scores.

Far more hockey players come from BC than Washington state, where aside from having a few WHL teams (due to proximity to Canada mostly) hockey is not all that popular.

I go back to national media and sports culture.

Saskatchewan has 1 million people but probably has produced more NHL players anywhere per capita than any other jurisdiction. Meanwhile, a place like Montana, across the border, with a similar population and similar winter climate produces hardly any NHL players.

GHOST
 

Killion

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To be fair, if there were to be an outdoor rink in Vancouver, the ice would be pretty ******.

Actually, there is one, and its in the downtown core, its artificial & covered; strictly for pleasure skating, so that doesnt really count. We do however have Stanley Park, named after the same Lord Stanley of Preston, the "natural home" for the Cup, part of a matched set. Make no mistake, even without outdoor facilities Vancouverites' are absolutely hockey crazy & have been for eons. Throughout the interior of course, plenty of outdoor rinks, ponds, lakes, rivers & sloughs for shinny, one or two just an hours drive from the Lower Mainland.
 

mucker*

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This is absurd.
I am no apologist, but Atlanta got ripped off big time.

12 seasons (I think)?
1 playoff appearance.
0 playoff wins.

Poorly marketed with no commitment from ownership to win.
Sorry but when you are trying to build a fanbase from the ground up...you have to not always be a top contender, but you can't stink and be a joke (that is NO way to sell the sport) nor have negilgent owners who do not even attempt marketing it.

Atlanta deserves better, you cannot label them or the market a failure because they never, ever got a chance to enjoy.
 

Hamilton Tigers

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Michael Cramer, a former president of the Dallas Stars, said he believes the Sun Belt strategy has “failed,†calling Florida a “disaster†and the situation surrounding the Coyotes a “mess.â€

...

While it’s hard to argue with the NHL’s recent successes, there does appear to be a widening gap between the league’s rich and poor. Forbes said seven teams combined to make $241 million last year, while a whopping 16 were stuck in the red, dropping an aggregate of $63 million.

To fix that problem, Cramer believes the league needs to slash its salary cap to adjust for the economic realities of being the fourth (or some say fifth) major sport in the U.S.

“You have to bring the game to the level people can afford it given the fact it’s not the highest thing on their list to see,†said Cramer, who is a professor at the University of Texas at Austin.

Will Other Teams Follow Atlanta Northward?

While the players would likely resist a significantly lower cap in the next Collective Bargaining Agreement, Cramer said the move would open the door to small and medium-sized markets that have a natural affinity to hockey.

“I think the NHL is headed toward a restructuring of its teams with more of a northern creep again,†said Cramer. He pointed to Seattle, Portland, Hartford, Milwaukee, Salt Lake City or even Boise as possible target cities.

Today’s economics also make further relocations to Canada a possibility, including putting a franchise in Hamilton or a second one in Toronto.

Canadian teams, which must pay their players in U.S. dollars, previously suffered a steep penalty due to the relative weakness of the Canadian loonie versus the greenback. After slumping to nearly 60 cents on the U.S. dollar early last decade, the Canadian currency has rebounded significantly and is now worth more than its counterpart.

“I don’t think it’s a bad thing to get back into Canada,†said Robert Boland, a professor at NYU and former player agent. “It gets the sport back on the footprint where it’s popular, where the teams are beloved and where it’s more than a regional sport -- it really is a national obsession.â€

To be sure, it’s clear for now the NHL would prefer to avoid abandoning the south as Bettman showed by strongly resisting efforts to move the Coyotes to Hamilton.

Moving out of struggling franchises in the Sun Belt could alienate millions of fans and hurt the league’s standing with national advertisers who prefer big markets.

“I don’t think there’s a grand plan here – let’s move back to Canada,†said Glickman.

Yet Cramer believes the league may need to adjust that plan.

“You’re bringing the game back to the people who are interested in it the most. We don’t have a hockey team in Mexico City for a reason,†he said.




Read more: http://www.foxbusiness.com/industri...sed-to-make-northern-migration/#ixzz1Opbvwp6S
 

ThirdManIn

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Aug 9, 2009
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I belive with the thrashers moving to Winnipeg next season is the start of a mass relocation by the NHL. over the next 5 - 8 years to stronger markets plus 2 more expansion teams will be added as well .

Winnipeg *
Hamilton
Quebec City
Kansas City
Houston
Seattle



* Has a team now

Wait... are you saying that, in your opinion, all of those "stronger markets" (Kansas City didn't do so well last time, did it?) will get a team? If so, which teams will be moving? Looks like you'll need three more teams to relocate for this to happen.
 

Metzen

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Interesting article, and it brings up some interesting points... A stronger CAD$ (plus a stronger CAD economy) makes the Southern' teams more of a failure...

Back in the mid-90's it was fairly easy to accept the economy of the Canadian teams as failures when there were $ millionaire's in the US willing to purchase teams... But does owning a sport franchise come as a plateau in the south? That is, is a franchise in Phoenix only ever worth $70M (what it was bought from Winnipeg for) with gains in the decimal of a percent per decade? eg, not worth it unless an owner buys it as a toy...?

If Phoenix is only worth around ~$70M (what Hulsizer is willing to put in of his own $) which is what it was bought from Winnipeg for; what does that tell you? To me, it says that growth of the market in that segment is too slow to be a worthy investment, and rich people are now seeing this over and over in these markets.

Tampa was purchased for (IIRC) $110M this is NOT justifiable. The last Canadian teams purchased were Winnipeg @ $170M, EDM @ ~$185M, MTL @ ~$400M (+arena, I know, so say $250M). For all three Canadian teams we know the increase in value and subsequent selling of the franchises made the sellers money. For the last few American teams we know it barely got them anything (TBL $110M, PHX $70M, ATL $125M) or lost money on their sale. It seems to me that there is a plateau between the rich, and really rich (ie Gary Bettman's $600M owner figure minimum [circa 1996]) and the rich can't afford to play in the NHL anymore and it's killing these franchises. View it as a "shrinking" of the "middle class"; if you will. The new "minimum amount a owner should be worth figure" may have to be in the $1B+ range in order to sustain a franchise. These people are getting harder and harder to find; especially in a southern market

In the end, it appears the NHL needs richer owners to support NHL franchises and these owners are now found less and less in the southern markets whereas there may be fewer "upper class" owners in Canada; a greater percentage of them want to own a NHL team to the point of just out bidding southern "middle class" would-be owner's.

I'm not sure what the NHL can do to change this outside of greater revenue sharing $ being dispersed. This essentially becomes a tax on the richer teams to support poorer teams but at what point does it become ridiculous? I think the top end is $16M or so being passed to the poorer teams that qualify for maximum revenue sharing with a $62M cap, but would these poorer teams be more sustainable with a greater share; double the current revenue sharing amount...? Would $32M dollars (half the cap!) going to Atlanta have kept the ASG group from selling the team? Essentially, revenue sharing paying for 75% of your cap floor roster...

In the end, to me, the rich in the southern US bought these teams on the cheap and the league grew too fast and the costs escalated too much per year. The 2005 CBA has exposed these owners and now their $70M franchise requires a $45M payroll! The "richer" are looking at these numbers and saying "no way" and the NHL is forced to hurt these franchises because the CBA requires a cap floor minimum. Remove that and we may see teams like Florida, Phoenix or Nashville spend $25<-30M on rosters *but they would have a better chance at being profitable and thus sustainable*.

...

...

...

And is that better in the end? A sustainable franchise vs. a franchise that just can't compete because it can't spend as much?

It feels like Edmonton circa 1998 all over again.
 
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Hamilton Tigers

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If Phoenix is only worth around ~$70M (what Hulsizer is willing to put in of his own $) which is what it was bought from Winnipeg for; what does that tell you? To me, it says that growth of the market in that segment is too slow to be a worthy investment, and rich people are now seeing this over and over in these markets.

Tampa was purchased for (IIRC) $110M this is NOT justifiable. The last Canadian teams purchased were Winnipeg @ $170M, EDM @ ~$185M, MTL @ ~$400M (+arena, I know, so say $250M). For all three Canadian teams we know the increase in value and subsequent selling of the franchises made the sellers money. For the last few American teams we know it barely got them anything (TBL $110M, PHX $70M, ATL $125M) or lost money on their sale. It seems to me that there is a plateau between the rich, and really rich (ie Gary Bettman's $600M owner figure minimum [circa 1996])

And to think Balsillie offered $240m to move the Coyotes to Hamilton.

And Tampa's purchase price was said to include more than just the team, and could have been lower than $100m, but who knows for sure?

Koules and Barrie bought the team in 2008 for $200 million and Bettman apparently wanted to get that much for the Lightning, its lease at the St. Pete Times Forum and a 5.5-acre parcel of land adjacent to the arena.

But Vinik, who has made his fortune buying and selling stocks and trying to outperform the market, would not pay that price, nor would he let anyone believe he paid anywhere near that amount. Sources say Vinik thought the $170 was too much, but was willing to pay it, but only if it meant Lecavalier could be moved.

In fact, it has been speculated the sale price could very well have already been agreed upon, but the two sides are haggling over what will be the announced price. Bettman, wanting to keep franchise values high, would like the announced price to be as high as possible. Vinik, apparently already concerned of his reputation on Wall Street amid claims he is making a vanity purchase, wants the announced price to be as low as $125 million.

http://www.thehockeynews.com/articl...tning-at-lower-price-and-keep-Lecavalier.html
 

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