Why fight so hard for Phoenix, but let Atlanta move so easily?

[AllByDesign]

The root of the problem is that the players earnings are disproportioned to the revenue their talent generates. This, of course, is the fault of the NHL. In an effort to design a Salary cap system that would be pallatable to the players, they gave the entire farm away.

If each of us looked at our own wages as an example. If I received ~58% of the revenue I had generated for my employer two things would happen. I would be set for life, and out of a job... my employer would be bankrupt.

Since most franchises today live and die by making the playoffs, so should the players salaries for their respective team. You don't make the playoffs.... you lose 60% of your earnings. Of course I jest, but why should the employers be giving so much away when they are the ones with the most at stake.

 

[RandR]

The problem with that scenario is that the lease payment ASG needs as arena owner would make the hockey team even less financially viable.

There's a reason so many teams are having taxpayers build them places to play...

I agree, but that wouldn't be ASG's problem if they were so lucky as to sell the Thrashers locally.

I am just countering the claim previously made here that

And, just to make sure this point is fully understood, even if the NHL were to buy/run the team they still wouldn't have anywhere to play in Atlanta.

I believe that if the NHL did buy/run the team, ASG would love to rent the building to them.

 

[Mantha Poodoo]

I believe that if the NHL did buy/run the team, ASG would love to rent the building to them.

Not unless they charged them an outrageous lease; ASG could make more money with other events (concerts/etc with 16k people per day, plus the concessions and so on). ASG doesn't really stand to benefit, and it also doesn't make their attempts to sell the Hawks and arena easier when you're dealing with having a mediocre asset attached, one that just happens to be a sports team that makes scheduling and arena management for the more desirable basketball team more difficult.

 

[Whileee]

Not unless they charged them an outrageous lease; ASG could make more money with other events (concerts/etc with 16k people per day, plus the concessions and so on). ASG doesn't really stand to benefit, and it also doesn't make their attempts to sell the Hawks and arena easier when you're dealing with having a mediocre asset attached, one that just happens to be a sports team that makes scheduling and arena management for the more desirable basketball team more difficult.

The point is that in their current financial state and the market conditions the Thrashers would not be able to pay a lease fee and still make money. In fact, as in many (most?) markets they would probably need revenues from the arena to help them come close to breaking even. That is the major difference between Glendale (Coyotes) and Atlanta. In Glendale, as the anchor tenant and with a desperate city council, the Coyotes have been offered substantial subsidies to offset anticipated losses on the hockey operation. That is just not on the table in Atlanta, which is why the NHL has cast their lot with the Coyotes and has to regrettably let the Thrashers relocate.

 

[Killion]

And thats the bottom-line Whileee. ASG spent nearly a decade destroying their own asset and in the end has shutout the NHL.

 

[Dado]

I believe that if the NHL did buy/run the team, ASG would love to rent the building to them.

Sure they would.

At a rate that would cause the NHL to puke, and relocate the team.

Which is just what they did.

 

[Whileee]

Sure they would.

At a rate that would cause the NHL to puke, and relocate the team.

Which is just what they did.

As I noted above, in Glendale the NHL and its potential owners is trying to figure out how to get the arena owner to pay the team to play there, not the other way around. It is a fundamentally different business proposition.

ASG could have built all sorts of synergies with the two pro teams and the arena, but seem to have messed it up badly. It will be important that the NHL doesn't sell the Coyotes to an owner that is either not committed, not skilled enough, or not rich enough to build the market. Already, there has been serious erosion of the market there, and three years of caretaker ownership by the NHL could really put them in a hole that is difficult to climb out from.

 

[manisback121]

ASG tried to sell the Thrashers to local interests who would keep the team in Atlanta. If they had found a buyer, where would the Thrashers have played? In ASG's arena of course. This would have been the ideal situation for ASG because they would have made money on the rent of the building and all the usual concessions + parking while being free of any risk losing money running a hockey team.

Correct if I am wrong, but that is how I understood what ASG most wanted to do> sell the team and rent the building to them.

FWIW, I agree that the BOG will approve the move of the team to Winnipeg. The league would not have given a tacit go-ahead to all these negotiations if they weren't prepared to allow it. And on top of that they league is going to collect something like $60 million as a relocation fee.

Speaking of which, is there any precedent for a relocation fee in the NHL or any major North American sport? Or is this something completely new that the NHL is trying to get away with and likely will?

Do not forget, relocation applications are due january 1 prior to the move date in same year. You need a 27/30 vote for a waiver, more stringent than relo vote. June is deadline before the team is locked into Atlanta. The Thrashers would have a home mostly due to the fact that Bettman could use his connections and clout with the NBA (you know the league he came from) to force ASG to giving the thrashers a lease extension.

Bettman - came from NBA and knows many from tenure there.

ASG - owns NBA team.

If you had NBA team, would you dare ******* with a former higher up with the NBA?

 

[manisback121]

Sure they would.

At a rate that would cause the NHL to puke, and relocate the team.

Which is just what they did.

No incentive to, Bettman could cause them real problems with the NBA if they were to do that. I wouldn't like it if a league were really nit picky in rejecting paperwork for unenforced rules. Other leagues are competitors, but they're at the end of the day, connected in many different ways and also communicate (see NHL in filing the brief in support of NFL in labor deal).

Even if Atlanda were stuck there, if you were an exec with ASG, and were playing hardball with TNSE or the league and got a call from David Stern telling you to back off (mindful that your group also owns a team in the league that Mr. Stern oversees), would you not back off?

 

[manisback121]

No incentive to, Bettman could cause them real problems with the NBA if they were to do that. I wouldn't like it if a league were really nit picky in rejecting paperwork for unenforced rules. Other leagues are competitors, but they're at the end of the day, connected in many different ways and also communicate (see NHL in filing the brief in support of NFL in labor deal).

Even if Atlanda were stuck there, if you were an exec with ASG, and were playing hardball with TNSE or the league and got a call from David Stern telling you to back off (mindful that your group also owns a team in the league that Mr. Stern oversees), would you not back off?

Mind you Stern would assist, because he doesn't want an ownership group with a hokey team that takes in more doing the same to his league. Who is this and how is it possible that a city would have an NHL team with bigger fanbase and bucks than an NBA team? Let alone br owned by the same group? Who is this owners name?

Maple Leaf Sports and Entertainment, owns leafs, raptors and air canada center.

 

[Mantha Poodoo]

No incentive to, Bettman could cause them real problems with the NBA if they were to do that. I wouldn't like it if a league were really nit picky in rejecting paperwork for unenforced rules. Other leagues are competitors, but they're at the end of the day, connected in many different ways and also communicate (see NHL in filing the brief in support of NFL in labor deal).

Even if Atlanda were stuck there, if you were an exec with ASG, and were playing hardball with TNSE or the league and got a call from David Stern telling you to back off (mindful that your group also owns a team in the league that Mr. Stern oversees), would you not back off?

No, I don't give a crap if I'm ASG because I'm trying to offload the Hawks and the arena anyhow, and attaching the Thrashers to them in any way (including a lease that's anything other than outrageous) devalues the properties I'm trying to offload. What's the NBA going to do, tell the new owners of the Hawks "we're going to punish the crap out of you because the previous owners were *******s?"

 

[manisback121]

No, I don't give a crap if I'm ASG because I'm trying to offload the Hawks and the arena anyhow, and attaching the Thrashers to them in any way (including a lease that's anything other than outrageous) devalues the properties I'm trying to offload. What's the NBA going to do, tell the new owners of the Hawks "we're going to punish the crap out of you because the previous owners were *******s?"

Unfortunately, yes. Whoever the owner is will feel the heat in principle of successor liability. ASG id in a barrell if the relocation is not approved next season because try will be attempting to offload a sports team with a target on its back. They have no choice but to cooperate, because the NBA could also choose to disapprove or delay the sale.

 

[Mantha Poodoo]

Unfortunately, yes. Whoever the owner is will feel the heat in principle of successor liability. ASG id in a barrell if the relocation is not approved next season because try will be attempting to offload a sports team with a target on its back. They have no choice but to cooperate, because the NBA could also choose to disapprove or delay the sale.

And you don't see the (huge?) legal problems that could arise from a league not approving a sale or putting successor liability of a new owner because the previous owner did something their buddies in an entirely different league didn't like? That has legal disaster written all over it.

 

[TaketheCannoli]

It's a misrepresentation about no local interest to buy.....

The Poison Pill is the Exclusive Negotiating Period with Jerry Moores for the Hawks and arena. It's doubtful that that sale will happen, but as long as it's exclusive, no one can negotiate for the other 2/3's, and....

No one will negotiate to keep the team in Atlanta because it is unsure as to who will own the arena so there is no way to negotiate a lease. It would be economic uncertainty and possible eco-suicide to blindly buy the hockey team and keep it local.

The ******** are only good at being crooks. Makes it look like no one wants the team and they get all puppy dog faced in the camera and say, "we tried."

AND as far as the NHL and Bettman, he was very proud to have been a part of "fixing" the Tampa Bay owner situation and even in putting a new owner into the franchise. He found Hulsizer and has Reinsdorf on a waiting list. The man keeps saying, "it's an Atlanta thing" about Atlanta. He never ever intended to help. He has seen Atlanta as a money grab for 2 years.

He should be embarrassed that one of the teams under his watch sent out renewal packages VIA EMAIL!!! Tell me how many teams did that this year. Renewal packages used to be colorful mailouts with perks attached. See Tampa Bay and their team jerseys with discount chips in the sleeves...

Columbus sent their renewals out via email. No jerseys, no chips, just a bill with bullet points on why to renew...priority rights for playoff tickets.

 

[jazznik]

If people are following the game more, playing the game more, why are they not going to the games more? If the people are being turned into hockey fans, even casual fans, why can't these southern teams fill 90% an 18-20,000 seat arena on a nightly basis? .

11 years - no playoff wins, terrible on ice-product, ownership that tells the fans to "deal with it" regarding ticket price increases, neglected arena, no marketing, etc, etc. If the team was given a chance with half decent ownership and on ice product then i'm sure these fans would turn out.

The NHL is and always will be a bit of a niche sport in the US. On the fringe of the big 3, trying to keep its spot at #4.

Isn't this why the NHL is trying to expand? Wasn't this the whole point of expansion in the first place. Relocating teams back to Canada doesn't help the NHL break out from it's 'niche'.

At the end of the day, the NHL is a business with owners who want to make money. If they can't get money, they sell and walk away. Growing the game is great, but if it doesn't translate into profits it doesn't work from a business perspective and the NHL shouldn't be involved. The league isn't a charity, leave that to USA Hockey Association and the NHLPA or someone else.

Sometimes you've got to speculate to accumulate. Imagine if hockey can succeed in Phoenix or Atlanta, it may take 15-20 years, but if it does take hold then you've got a hell of a potential market/s that could bring in big amounts of cash to the league and elevate it to levels of popularity that just aren't possible in other markets.

For people that say Atlanta didn't have enough of a chance, they had 11 seasons and 12 years, this time around. They had a chance years ago and that flopped as well. Its not a hockey market.

The Flames didn't 'flop', it was widely thought that the team was sold because the owner (Cousins) suffered losses in the real estate crash and needed to raise cash - he was offered a then record amount to sell. However, a recent interview with Dan Bouchard (former Flames goalie) suggests that Cousins didn't want any part of the pensions scandal and that was a motivation to sell aswell.

Whatever reason, the Flames weren't sold because hockey had failed. Atlanta has never been given a chance to prove itself as a hockey market. Give me ten years of stable ownership and on ice success and if the fans still don't show up i'll gladly conceed that Atlanta won't work as a hockey market, untill then it remains unproven as a market.

 

[BrianL*]

Do not forget, relocation applications are due january 1 prior to the move date in same year.

Who makes this application? The current owner (whether looking to sell or just move elsewhere), or a likely prospective owner? Can the NHL provide pre-approval conditional on a deal being worked out? Can this all be done behind closed doors?

If the rumours are true that this has been in the works for some time, and they just had to put the Phoenix situation to bed before serious talks could begin, how do we know the relocation approval hasn't already been done?

 

[metalfoot]

11 years - no playoff wins, terrible on ice-product, ownership that tells the fans to "deal with it" regarding ticket price increases, neglected arena, no marketing, etc, etc. If the team was given a chance with half decent ownership and on ice product then i'm sure these fans would turn out.



Isn't this why the NHL is trying to expand? Wasn't this the whole point of expansion in the first place. Relocating teams back to Canada doesn't help the NHL break out from it's 'niche'.



Sometimes you've got to speculate to accumulate. Imagine if hockey can succeed in Phoenix or Atlanta, it may take 15-20 years, but if it does take hold then you've got a hell of a potential market/s that could bring in big amounts of cash to the league and elevate it to levels of popularity that just aren't possible in other markets.



The Flames didn't 'flop', it was widely thought that the team was sold bacause the owner (Cousins) suffered losses in the real estate crash and needed to raise cash - he was offered a then record amount to sell. However, a recent interview with Dan Bouchard (former Flames goalie) suggests that Cousins didn't want any part of the pensions scandal and that was a motivation to sell aswell.

Whatever reason, the Flames weren't sold because hockey had failed. Atlanta has never been given a chance to prove itself as a hockey market. Give me ten years of stable ownership and on ice success and if the fans still don't show up i'll gladly conceed that Atlanta won't work as a hockey market, untill then it remains unproven as a market.

Just curious what would constitute "on ice success" which would prove the market. Is that making the playoffs every year (most teams don't make it *every* year)? Is it icing a competitive team every year (because except for the big losing streak this year, the Thrashers certainly had that)? What is the necessary condition to be 'successful'? Not trying to be a jerk, just wanting to know what that condition is, as I've heard it a number of times from a number of Atlanta fans.

 

[manisback121]

Who makes this application? The current owner (whether looking to sell or just move elsewhere), or a likely prospective owner? Can the NHL provide pre-approval conditional on a deal being worked out? Can this all be done behind closed doors?

If the rumours are true that this has been in the works for some time, and they just had to put the Phoenix situation to bed before serious talks could begin, how do we know the relocation approval hasn't already been done?

The relocation application takes place after the sale, pursuant to league constitution, due to the fat that the incoming owners in TNSE are the ones intending to move the team.

There is a waiver clause if you fail to make Jan 1 deadline, but that requires something like 27/30 owners signing on to grant a waiver and that window also closes in June (unsure of the approx. date). If you examine the league's master franchise agreement as well as constitution, they make it practically impossible (not totally, but practically due to red tape) to pull off a move like this. That coupled with sale approvals on both sides and the fact that Bettman's protege Stern also has to deal with a sale makes e think ASG does not have the position that Wingman speaks of. The reality is that they may force Atlanta to stay in Atlanta, especially if the BOG decides not to grant the waiver. In fact I think that right now, I don't think the 2 schedule bit applies here, that was a doomsday scenario is phoenix didn't work out. I don't think you have much choice if you're ash and both leagues which you own franchises in tell you to "eat it" on another year in the buildingg.

 

[SavageSteve]

I guess the reason is kinda simple in that the Thrashers don't have a valid lease whereas the Yotes do.

In the text that I still have saved in my e-mail from reply I got from writing Bettman illustrates that:

Dear Nashville Predator Fans,


Thank you so much for sharing your thoughts about the Nashville Predators.
At this point in time, the Predators have an existing, long-term lease, and
the Club is obligated to honor the terms of that lease. We expect the Club
and the City of Nashville will continue to be focused on doing everything
within its power to make this team successful in Nashville.


The National Hockey League

Basically what saved us and the Yotes was an obligation to honoring the long-term building leases. Since the Thrash aren't currently tied to a lease, therefor they are portable and why the NHL isn't fighting as hard because they really don't have legs to stand on in this matter.

 

[XX]

Can the NHL contract the Thrashers and then issue a new franchise to TNSE for whatever amount they agree on? That way ASG gets nothing. They only own the right to an NHL team in Atlanta, as per the Phoenix ruling.

 

[Retail1LO*]

There SHOULD be a lot of lessons to be learned from this mess. The question is, will they be? My guess is that the situation in Atlanta has been coming to a head for some time. However, since they weren't embroiled in nearly the cluster**** Phoenix was, it was easier to keep things churning behind closed doors. Now however, as time is of the essence and losses have mounted, it was just impossible for things not to come out in the public. I'm certain that the league would have LOVED to have found ownership for PHX, so perhaps they could have then taken control of ATL, and started doing the same for them. However, they ran out of time, and with them still holding the bags in PHX, they have to move ATL. The league can't have ownership of two teams at once. It was just a perfect storm, and the league got caught in it. All I know is the league better at least bat .500 on this mess. If both teams relocate, and to Canada no less, it's going to look really bad on the current NHL administration.

 

[rj]

Part of me wonders if the league is financially healthy. Yes, they just got a new TV contract (U.S. TV rights for next 10 years = $2 billion which when divided by 30 teams and 10 years comes out to $6.67 million per team per year).

-They own Phoenix which the original owner declared bankruptcy, and their losses are in part being subsidized by the City of Glendale, but the league is refusing to accept a loss for what they will sell the team for at this point. They still can in the future.
-The Atlanta franchise I heard a number from Hockey Central last week is losing $30 million per year.
-The Columbus franchise it's been reported is losing a lot of money.

Florida I imagine is. The Islanders are a long known sieve on funds, right? How many other teams in the league at the moment are losing money? At some point it ceases being just one or two markets with "bad owners". Maybe they can't save Atlanta like they can Phoenix because the NHL just can't afford to? A "relocation fee" can help pay some bills around the league that need to be paid (e.g. Phoenix). In other words, Coyotes fans got lucky that their franchise was the first one for the owner to say give.

 

[pegcity]

There SHOULD be a lot of lessons to be learned from this mess. The question is, will they be? My guess is that the situation in Atlanta has been coming to a head for some time. However, since they weren't embroiled in nearly the cluster**** Phoenix was, it was easier to keep things churning behind closed doors. Now however, as time is of the essence and losses have mounted, it was just impossible for things not to come out in the public. I'm certain that the league would have LOVED to have found ownership for PHX, so perhaps they could have then taken control of ATL, and started doing the same for them. However, they ran out of time, and with them still holding the bags in PHX, they have to move ATL. The league can't have ownership of two teams at once. It was just a perfect storm, and the league got caught in it. All I know is the league better at least bat .500 on this mess. If both teams relocate, and to Canada no less, it's going to look really bad on the current NHL administration.

It's funny how some of us were screaming at the tops of our lungs about Atlanta be a strong possibility for relocation and then getting completely hammered on this board.

Phoenix then Atlanta? What a joke.

 

[rj]

The root of the problem is that the players earnings are disproportioned to the revenue their talent generates. This, of course, is the fault of the NHL. In an effort to design a Salary cap system that would be pallatable to the players, they gave the entire farm away.

If each of us looked at our own wages as an example. If I received ~58% of the revenue I had generated for my employer two things would happen. I would be set for life, and out of a job... my employer would be bankrupt.

Since most franchises today live and die by making the playoffs, so should the players salaries for their respective team. You don't make the playoffs.... you lose 60% of your earnings. Of course I jest, but why should the employers be giving so much away when they are the ones with the most at stake.

You'd see all your best players cluster for the top teams and then the teams in the bottom half would be even less competitive.

 

[Retail1LO*]

You'd see all your best players cluster for the top teams and then the teams in the bottom half would be even less competitive.

Like Major League Baseball? Yeah. Fun stuff.