It seems admittance to the private club that is the NHL, even for qualified applicants, depends on who is knocking at the door.
While BlackBerry tycoon Jim Balsillie still has not made it past doorman Gary Bettman, despite all of his legal pounding, two other owners were ushered in quickly in 1992 when they showed up practically unannounced. And the Disney Corporation was given a hero's welcome even though it refused to pay an indemnification fee for buying the expansion Mighty Ducks of Anaheim and operating them in the same territory as the Los Angeles Kings.
The NHL governors surprised the reporters covering the annual meetings in December, 1992 when they announced the league would expand by two teams for the 1993-94 season. Aside from Disney, the other new owner was Blockbuster Video chairman H. Wayne Huizenga, who was granted the Florida Panthers.
Both new owners paid the going rate for expansion teams at the time, $50-million (all currency U.S.). However, Disney chairman Michael Eisner refused to pay for the right to play inside another team's territory as it was defined under NHL rules.
The NHL, unlike today when it insists Balsillie must pay a relocation fee plus an indemnification fee if he is successful in his attempt to buy the Phoenix Coyotes and move them to Hamilton, did not argue. It simply took half of Eisner's $50-million expansion fee, called it an indemnification fee and handed it to Los Angeles Kings owner Bruce McNall, who was also the chairman of the NHL board of governors at the time.
McNall says the reason was the other NHL owners were excited at the prospect of a famous company like Disney joining the league. They thought this would give them better marketing leverage with corporate America in the early days of Gary Bettman's tenure when the commissioner was taking the league from a mostly regional sport to full national attention in the United States.
It would also raise the value of their franchises, so the matter of the Kings potentially losing customers to the Ducks was not a big issue. Besides, when Al Davis moved his NFL team, the Oakland Raiders, to Los Angeles in 1982 the courts ruled indemnification fees were not valid.
"I don't think people wanted to battle the issue," McNall said. "You've got 30 people in a club and they wanted to protect the value of their franchises. In the Coyotes case, you've got two unhappy people [the Toronto Maple Leafs and Buffalo Sabres]so they would vote to protect them."
Even though the NHL's long-term plans in 1992 concerned expansion, the governors were not planning to add any teams for the coming season. They had just added three teams and thought it was time to take a breather from expansion.
But it was McNall himself who brought Eisner to the table, which led some to describe the $25-million he received as a finder's fee. And since Blockbuster was one of the most well-known companies in the U.S. at the time, there was little trouble selling the governors on the idea of a quick expansion. Not to mention some unexpected cash to split up.
Howard Baldwin, then the part-owner of the Pittsburgh Penguins came up with a solution to the indemnification-fee problem. According to McNall, Baldwin was the one who suggested half should go to him and the remainder be split among the rest of the owners.
"The other owners were happy because, number one, we would get Disney involved, and number two, we would still get more money than we planned," McNall said.
A little more than 17 years later, both Disney and Blockbuster are long gone. Disney, which bought the team because Eisner was a hockey fan and partly because it wanted to promote its Mighty Ducks movie franchise through a hockey team, sold out to the Samueli family.
Huizenga and Blockbuster hit rocky business waters and the Panthers were never a big success in Florida. Now the group Huizenga sold the team to is trying to sell the Panthers again.Report Typo/Error