The Phoenix Coyotes will dominate the agenda at the first day of the NHL governors' meetings but that heated discussion may lead to another: putting a second team in Toronto.
The matter of a second Toronto team is not on the agenda, nor has it ever been part of an official discussion at a board of governors meeting. But at least one governor plans to raise it when NHL commissioner Gary Bettman outlines the plans to sell the Coyotes to the Ice Edge group of businessmen and many governors have been informally kicking the idea around for years.
There are also signs Bettman and the NHL's deputy commissioner, Bill Daly, are changing their tune in this regard. Indeed, both men have mused aloud about the topic, the most recent being Daly at the general managers' meetings last month.
However, another governor tossed cold water on the idea, saying Bettman controls the meetings so tightly that no one will be able to raise the topic even informally.
"I guarantee this, that the governor who said [he will raise the subject]will get nowhere," the governor said. "The only way he could even broach the subject is by first asking [Bettman]about it one-on-one. And it would end there.
"If he does have the nerve to raise the question, he will be told there is another time and place for that. And it will end there."
If the governor follows through, the discussion will take place without two major players from then fiercest opponent of a second team in Southern Ontario - the Toronto Maple Leafs. Brian Burke, president and general manager of the Maple Leafs, will be the only representative from the team at the meetings. Both Maple Leaf Sports and Entertainment chairman Larry Tanenbaum and president Richard Peddie, who are usually fixtures at these meetings, will be absent. Peddie said both he and Tanenbaum had other commitments.
By the way, Burke gave the traditional Leafs response to the question of a second team. "Someone has to make the business case that it won't hurt us," he said. If anyone can, plus convince them it won't harm the Buffalo Sabres or even the Detroit Red Wings, the Leafs might go for it. Burke noted the Wings draw fans from as far east as London, Ont. And good luck to anyone who has to convince them it's a good idea.
Even if the discussion does not turn to Toronto, there is lots of potential for discord on the Coyotes. Bettman will be outlining the details of the Ice Edge offer to the governors and several have already said, albeit anonymously, that they are skeptical of the group's chances for success.
Daryl Jones, one of the principals in the Ice Edge group, which also includes John Breslow who was a minority owner when Jerry Moyes had the team, said yesterday they expect the Coyotes to lose money for the next five years. But he believes that even a market as poisoned as Phoenix can recover with the right management.
"The reality is that things could turn around quickly if the team makes the playoffs," Jones said. "There are a lot of naysayers out there. Lots of people are betting against us. But that's cool."
Jones said his group is still working on its offer. It will probably not be in a position to close for a couple of months.
Ice Edge still wants Wayne Gretzky to be a part of the team, although it is not clear if that is as an owner or a manager. Jones said serious discussions will be held in the next two weeks. Indications from Gretzky's camp are that he may take a pass.
When it comes to the Coyotes, the biggest question the governors should have for Bettman is where the operating capital will come from if the team is to stay in Glendale. Ice Edge group expects to pay about $140-million (all currency U.S.), which is the same the league paid for the Coyotes. But that still means many tens of millions of dollars a year will be needed to keep the team operating.
Ice Edge has a line of credit for $100-million which it feels is sufficient to cover the losses for the first five years. Jones argues there are ways to cut those losses, including playing five games a year in Saskatoon.
However, the minimum payroll in the NHL is $40-million. There is no way around that, outside of a small drop next season based on dwindling revenue in the recession, and even that is not guaranteed. In addition, owners and GMs will tell you, the rest of the operating budget requires at least $25-million.
Jones argues that before the team's debt spiralled out of control it broke even on the hockey operations. But even then the Coyotes could manage barely $20-million a year in ticket sales. Now, anyone who goes to a game says there are about 5,000 fans in the seats and it's anyone's guess how many paid the full price for their tickets.