There was a really interesting article out of Atlanta earlier this week, one that received little attention outside of the city but which painted a fairly dire picture about the situation currently facing the Thrashers.
The fact is that this is an NHL team that has had troubled ownership for far, far too long and, in a scenario that sounds a little too much like former Phoenix Coyotes owner Jerry Moyes, it's a group that has been desperate to unload the franchise for years.
And they're having a very difficult time finding a buyer - especially a local one.
"There is still a sense of urgency, and that has not changed one bit," Thrashers part-owner Michael Gearon Jr. told the Atlanta Journal-Constitution. "Each day that goes by, we need to find a solution.
"As someone who has lived in this city my whole life, it's important to me that we do everything we can to try to have our sports teams survive and prosper in this city," Gearon added. "I think this city of 5 1/2 million should prosper as a successful NHL city.
"But we need others in the community that are willing to come in and either invest alongside us or buy the franchise. I would be more than happy to stay in and roll over my equity and continue to participate as a minority partner."
Asked about the franchise potentially being relocated, Gearon didn't rule that out either.
"I'd hate to see it get to that point," he said. "... You sometimes don't appreciate what you have until you don't have it - whether that's the children that eventually get out of high school and go off to college and don't live in your house any more, or sports teams.
"I know what it was like for me as a child when the Atlanta Flames left in 1980. It was tough on me, and it was tough on the city. I don't want to see that happen with the Atlanta Thrashers."
One of the more troubling things about the Thrashers situation is that there have been rumours around the league all season that the team could be more difficult to "save" than the Coyotes, who the NHL has fought tooth and nail for the past two years since Moyes put the team into bankruptcy against the league's wishes.
While Phoenix is in danger of being relocated within the next couple of months if a deal doesn't get done, it's believed the Atlanta Spirit group can hang on to the Thrashers for one more year while continuing to hunt for a buyer. (Keep in mind they've been trying to sell already for six years, which is where the desperation comes in.)
After talking to a few sources about this the past few weeks, here are a few reasons I've come up with why the Thrashers situation is different than what's happening in Phoenix and why that may potentially make them more vulnerable:
- One issue in Atlanta is the fact that the NHL will very likely not be able to "rescue" the team by purchasing it the same way they did the Coyotes. The board of governors aren't interested in getting into situations like this unless their hand is forced, as they feel it was with the Jim Balsillie bankruptcy situation in 2009.
- Unlike in Phoenix, where the city is in deep with the building and can't afford to lose its anchor tenant, Atlanta has the NBA's Hawks in place and will not be nearly as vulnerable to be pushed into the kind of deal the NHL and Matthew Hulsizer are trying to get. Often in these situations, the threat of relocation can result in a much better lease agreement, but that appears unlikely in Atlanta.
- The Spirit group, which also owns the Hawks and the operating rights at the arena the two teams share, wants to sell only the hockey team. Given the losses involved (a reported $130-million between 2005 and 2010) and the need to offset those with revenue from the rink, however, it's been nearly impossible to move just the Thrashers to a local buyer. The AS group will likely have to sell all three assets to keep the NHL team in Atlanta, which is a possibility. (Despite their own issues, the Hawks are a far better club to own in part because the TV contract involved.)
- The AS group has a complicated history filled with lawsuits and membership shuffles, but it was nine individuals from three different cities who bought into the package of the two teams and the arena rights. (I believe they're now down to six or seven individuals.) Because there are different interests at work within the ownership group (and not all are locally based), there's disagreement with how to proceed. Word has it that some of those involved in the partnership are very interested in the Winnipeg situation, as if they want to unload just the hockey team, they would fetch a far, far higher bid from a group outside of Atlanta.
- Now the caveat there, and it's a big one, is that the league would likely want a cut - and perhaps a big one - in the form of a relocation fee. The asking price for the Thrashers, in Atlanta, is somewhere in the neighbourhood of $75- to $110-million, but a group in another market, like Winnipeg, could be expected to pay up to $170-million. For the AS group members who simply have had enough of the losses and want out, that's an intriguing possibility. (As we saw with the Coyotes situation, however, the league frowns on owners trying to benefit financially from relocating a team. The argument against Moyes was that he didn't "own" the rights to a team in Winnipeg.)
- There are two more reasons I've been told the NHL's board of governors would more readily give up on Atlanta than they have in Phoenix. One is that an NHL franchise has failed in the market before. And two is that Gary Bettman is personally heavily invested in the Coyotes fight given its ties to Balsillie. If the Coyotes move, there is sure to be a lot of criticism of the league for not finding a workable relocation scenario earlier on in the proceedings. They're in deep there. Not so much in Atlanta.
All of that said, if the AS group can be persuaded to sell all three entities, there's some interest there and probably a deal to be made. And with a lockout looming in the NBA, it's unlikely they're anxious to lose what may be their only tenant in the building for next season.
There are also issues in Atlanta such as naming rights on the arena that are tied to the fact two teams are in the building.
However, if the Coyotes situation is resolved in the coming weeks and the team stays in Glendale, all eyes will immediately turn to the Thrashers. And while the NHL will likely pressure the group there to find a way to keep the team in Atlanta, indications are the league won't be willing to put nearly as much of its own neck on the line in that fight.Report Typo/Error