It’s hard to fathom now, but there was once a major professional sport in North America called, if memory serves us right, “iced-hockey.” This sport had its games broadcast on real actual networks like FOX and ESPN, and expanded its reach all over the nation with teams in exotic non-icy locales like Tampa, Florida and Phoenix, Arizona. New arenas were built, new revenue streams were found, and the sky was the limit. “Move over basketball, football, and baseball”, said the “iced-hockey” executives, “we’re here to stay.” Yeah, well, they weren’t.
(How metaphorical of you, ‘Yotes.)
In 2004, the entire damn sport collapsed into a pile of rubble, never to be heard from again as a major threat to the existing players in the North American sports market. Obviously, the NHL came back, but it had been reduced to a niche sport, mostly ignored by the general populace and major networks. The bubble on hockey had burst, and both salaries and revenue reflected this sad fact. So why, then, is the NHL claiming that the purchase price of the moribund, bankrupt Phoenix Coyotes could reach the astronomical figure of $400 million freaking dollars? Because if there’s one thing commissioner Gary Bettman knows nothing about, it’s proper accounting.
The sordid tale of the Coyotes has been told time and time again by now. They moved from hockey-mad Winnipeg to the desert back at the height of hockey hype in the 1990s. They played in an arena in Glendale far from anyone in the area who might actually care. After the lockout wiped out most of their meager fanbase, a string of bad publicity (Wayne Gretzky’s $7 million salary didn’t help) and even worse hockey finished them off. The team filed for bankruptcy last month.
Enter Blackberry billionaire Jim Balsillie, who wants to move the team to southern Ontario against the wishes of the league, no matter that the league has proven time and time again it has no idea what the hell it’s doing. That’s where the $400 million comes in. As you read the following, keep in mind that FORBES MAGAZINE valued the team at around $142 million. According to the TORONTO STAR:
The NHL is threatening an indemnity fee on top of a relocation fee – pushing the price tag for the Phoenix Coyotes to perhaps more than $400 million – if bankruptcy court judge Redfield Baum allows the team to move to Hamilton.
It’s expected the league could ask for more than $100 million (all figures U.S.) as a relocation fee and perhaps as much again in payment to the Maple Leafs and Buffalo Sabres in indemnity for the Coyotes encroaching on their territory.
Basically, the NHL is saying that the value of the Coyotes as things stand in Phoenix is irrelevant, and the only value that matters is what a Hamilton, Ontario team would be worth. This, of course, completely goes against everything America holds dear (aka capitalism). The entire point of a business investment is to buy low and sell high. Obviously, the factors that go into buying sports teams are a little different, but this just seems wrong.
Why the NHL is committed to keeping a failing team in a failing market is anyone’s guess, but it probably has a lot to do with the owners of the Toronto Maple Leafs not wanting a new team in their backyard. It seems like a better solution would be to not just attempt to price Balsillie out of the market; chances are his pockets are deeper than the league’s On the other hand, the NHL hasn’t made a sound financial move in decades; why start now?