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Here we are three years into the collective agreement that was going to save the NHL, make it a better, more viable business, and you can still see fires on the horizon. Some are manageable burns; some are close to raging out of control. All require attention.
Follow the smoke and you'll see what we mean:
In Buffalo, the Sabres business practices are rattling their NHL partners who think the team is deliberately keeping the cost of its tickets low so it can qualify for league revenue sharing. The Sabres are raising their tickets by $3 to $6 (all figures US) for next season and have acknowledged their need to increase revenue "in order to maintain a receipt of revenue sharing."
That's got people from several of the NHL's larger markets screaming for an investigation in Buffalo.
In Nashville, the Predators' second-largest investor, William (Boot Del Biaggio III has run afoul of lenders, is being buried under lawsuits and could declare bankruptcy within day. He's also trying to unload his 27 per cent share in a team that has its own problems to contend with. For example: The Predators haven't met all the NHL's revenue-sharing criteria (for revenue growth, etc.) and are expected to receive only a 75 per cent share in 2008-09. That means a drop in the $12 million the Preds have drawn each of the last two seasons.
Meanwhile in Tampa, the Lightning's prospective owners, Oren Koules and Len Barrie, were turned down by three banks in their efforts to secure the money they needed. They finally had to strike a deal with former owner (Dollar) Bill Davidson, who agreed to finance the purchase. The NHL's board of governors has yet to approve the transaction but likely will, which is worrying at least one NHL team official. "Can Koules and Barrie sustain $10 million or $20 million losses (per season) in Tampa? I don't think so," said the official. "That whole thing is going to blow up."
As for the Phoenix Coyotes, they lost $30 million last season, according to an internal NHL document publicized last week, and are believed to have lost an additional $30 million the year before. (Here's a thought: send the Coyotes back where they came from; to Winnipeg. Makes sense if you consider the Canadian economy, the strength of the Canadian dollar and our undying love for all things hockey.)
Three years ago, when the lockout supposedly ended in the owners' favour, we were told the NHL had salvaged itself by gaining a salary cap and fixed costs and that all was good and proper now.
The league said franchise values would go up and, indeed, they have. Davidson bought the Lightning in 1999 for $115 million and is looking to sell for $206 million. Balsillie offered $220 million for the Predators, who were eventually sold to a group that included Del Biaggio for $193 million. (Okay, so that deal had as much to do with keeping Balsillie out as it did keeping the Preds in Nashville.)
But let's not forget there was also talk of greater parity among the teams, about keeping franchises healthy in their current markets. There were even some wishful types who thought ticket prices might go down once the NHL's ship was righted.
Well, parity was certainly coming into play before the lockout and no, the ticket prices didn't go down when the players went back to work. As for fixed costs, it's worth noting that next season's salary cap minimum is likely to be set at $40 million, with a ceiling of $56 million. That's a significant jump from the $23 million minimum of 2005-2006 and one caused largely by the rise in the Canadian dollar, an increase that has helped on one side of the border while damaging the weaker teams on the other.
Little wonder that with the U.S. economy on full credit-crunch alert, several teams (as many as eight to 10) have had discussions with Balsillie, a businessman who has the money to match his passion for the game. Balsillie remains keenly interested in either buying a team in a solid hockey market and operating it there or buying one and relocating it to Southern Ontario.
Commissioner Gary Bettman, though, wants no part of Balsillie and his independent ways but you have to know there are owners who covet the Blackberry maker's cash and would love to have him as a member of their group. Will it happen? Eventually. In fact, there are rumblings something could transpire as soon as next week; that Balsillie may make an offer on a team he intends to keep in its current locale.
If so, it would be an encouraging development for a league that was supposed to come out all nice and clean after a nasty lockout. That was the claim three years. Today, you can still see the soot fly and the fires burn.
