Blog blast past: Balsillie boarded; the Phoenix Coyotes story few people read

As you know, the bond sale that would keep a NHL hockey team in Glendale, Ariz., has gone awry. Reading back to July 30, 2009, it's not surprising when you realize whose interests the NHL and most politicians are really representing these days.

The NHL really showed Wednesday how as a business, it is a game of TEGWAR, The Exciting Game Without Any Rules.

Jim Balsillie's camp smartly pointed out minutes after he was denied that this had nothing to do with his fitness to be an owner, and that the judge in Arizona said in June that the league would have to show he didn't have the cash. Of course, the nets had already been moved, like a group of kids moving their ball hockey game down the street (which might cheese the judge off, but that is neither here nor there). Bruce Arthur's National Post column pointed out, well, if it wasn't money, then it had be something else, but this is the league that let future felon Boots Del Biaggio into the fold.

Granted, being the person who waits for Canadians to wake up to what Gary Bettman's NHL stands for is like being sent out on a snipe hunt. Please, though, sometime between now and the next labour stoppage, clue in that denying Balsillie, again, really betrays that the NHL always represents its interests to the bitter end. It's just that those interests have nothing to do with the great game of hockey and everything to do with corporate malfeasance that could launch six Naomi Klein screeds and a couple Bruce Cockburn ditties. They won't care you could have three teams in Southern Ontario which would each draw more than the Phoenix Coyotes (with higher ticket prices) until the day when the U.S. economy is really up a creek.

The Coyotes are just a game piece in a scheme where, to quote an alternative weekly said the week Balsillie's bid for the Coyotes became public, a "broke" city is "also trying to line the pockets of some of the wealthiest investment groups in New York City, Saudi Arabia, and Abu Dhabi." (Phoenix New Times, May 14.)

The above link came via Make It Eight, Eh?. From the look of it, a Hamilton, Ont., insurance broker named Craig Ferguson, over the run of this sordid saga, has evolved from a thinking fan's case for the NHL to put more teams into Canada to advocacy for taxpayers in Arizona in the wake of a swindle/boondoggle which is going down in the American southwest. You really should, if you have time, read through it since Ferguson makes it clear why the hell Jerry Reinsdorf wants to own an unprofitable hockey team which has never been about hockey from the day it arrived in the desert.

"The attraction to the Coyotes hockey team has always been an issue of land development opportunites and great deals with government, and the profits that would go along with them. Nobody in their right mind would take this team with the clear math currently in place. As soon as (former owners Jerry) Moyes and (Steve) Ellman broke up the land from the ice, that’s when the 'Coyote' should have chased the Roadrunner out of town.

"Are we to believe, as mentioned by the Reinsdorf camp, and now even by the new Canadian/American mixed coalition represented by Daryl Jones (Research Edge LLC) that trying to share in a little bit of food and parking is going to cut the mustard? 'Little things add up' is the argument? Were we born yesterday? And, if I might add, if Daryl Jones and his group thinks they are going to break into this game with nickel and dime thinking, they had better think again. Like all politics, what would make sense from a genuine, honest angle usually doesn’t win the prize."

In other words: Cha-ching! Ferguson has flipped over a couple other rocks, noting two weeks ago that Jerry Reinsdorf's son is "is a director of a partnering firm, International Facilities Group (IFG), that has a hand in consulting the City of Glendale for the Jobing.com arena, and more."

It is not like this should shock anyone. For the most part this is the way of the world, at least up until Bear Stearns went nips-up last fall. (At this point, one should allow that maybe the NHL would like Balsillie to pay $350-400 million for an expansion team instead of $212.5M for an established team. At some point, though, these guys have to stop playing the Canada card.)

Most sports fans, regardless of background or intelligence, would be like, "Why should I care that the the city of Phoenix is going to hand over $100 million in subsidies in return for 200 public parking spaces at a time when it can't afford to open public pools? I just want to know if the team is going to relocate or not." Thankfully, no one needs a public pool in a desert during a time of high unemployment). That is just the nature of following a sport, nothing wrong or evil about it.

However, it does seem crazy how few in Canada have really gone to lengths to explain how the Duel in the Desert, so-called, was more than Gary Bettman and Bill Daly delivering a big screw-you to Jim Balsillie. In the grand scheme, this only reaffirms Canadians' Pavlovian slavishness to the NHL. Hockey is a wonderful sport, perhaps the best of the team games, and the NHL is more appealing to watch that it has been at pretty much any point in the Bettman era.

At the same time, to repeat Peter Gent's "every time I say it's a business you call it a game and every time I call it a game you say it's a business" corollary, let's have some clear eyes. At the end of the day, this league Canadians hold so near and dear is run by some not-too-nice people who are only to eager to be part of greater outrages. On a macro level, it does affect the competitive product.

It was nice to speculate for a couple days when that one bid group for the Coyotes talked about playing games in Halifax or Saskatoon and having an AHL team in Thunder Bay. Maybe that was akin to The Simpsons episode when Monty Burns ran for governor: "They're like seals. Toss 'em a couple fish and watch 'em jump."

Point being, smarten up. The next person who says Balsillie needs to learn to play by the NHL's rules should get two minutes for bein' stupid. (Outgoing Montreal Canadiens George Gillett actually accuse of him creating a "distraction" that caused the Habs' season to go downhill was a new low. (Mr. Gillett, I have with me a Mr. Jared Allen who has debunked the myth athletes can be distracted, and he's not above using physical force to make a point.)

Rules? The NHL has but one that it honours, realizing its place as a pipsqueak in the lumbering dinosaur of the American economy, 2009. Balsille, to borrow a line from those Ford ads which have been playing all summer, might "pulled off a game-changer" by moving the Coyotes to Southern Ontario, but there were other interests to defend.

Gary Bettman fits right in with the Boomer mentality where old-economy businesses hide that they are just going around in circles, slowly losing ground before realizing time has run out. The commish is a pipsqueak in the grand scheme of bankrupting America, but like any good CEO, he knows who he works for. That's why they pay him the big bucks.

As previously stated, "It would be silly to use the league's idiotic business practices to justify non-interest in what happens on the ice." However, this has been an exercise in the NHL as usual. It has no rules and when you have no rules, you have less of a game.

Related:
Balsillie vows to press on; BlackBerry billionaire given rough ride by NHL's board of governors as bid for troubled Coyotes rejected (Paul Waldie and David Shoalts, Globe & Mail)
NHL: Anybody but you, Balsillie (Bruce Arthur, National Post)

Gary Bettman cannot see the forest for the empty seats...

The Phoenix Coyotes had 1,000 fans at a game. That is all.

"About 1,000 fans were at the 17,800-seat Jobing.com Arena for the Coyotes preseason opener."

Related:
Coyotes fans blame Phoenix media for lack of support (Phoenix Business Journal, Sept. 16)

Bring back the Jets: Taking the high road!

One prevailing thought whenever Bring Back the Jets talk flares up is that Winnipeg is a "warehouse town."

No offence — that phrase was furnished by a Westerner who was born in the 'Peg, honest — but a piece from canadianbusiness.com hit upon that point. The high road to take is when/if the NHL faces up to economic reality, then Winnipeg becomes more than workable.

"(T)he league would have to dramatically contract, which is a possibility considering how many American teams are in financial trouble. 'The NHL has to shrink,' says (Rob) Warren (executive director of the Winnipeg-based Asper Centre for Entrepreneurship). "A source of mine in the league has said that anything south of New York you want to get out of because those aren't good hockey markets. You might find a pocket here or there, but places like Carolina and Florida, those are not traditional hockey markets."

"If the NHL becomes smaller, player salaries will come down, and then Winnipeg might be able to afford a team. Author Jim Silver explains that salaries 'aren't consistent with anything in the real world' and that while players should be well paid, they don't need $1 million a year.

"Warren adds that while contraction won't stop the superstars from getting the big bucks, everyone else's salaries will come down. Then it will be less expensive to purchase, and run, a franchise. 'And, when that happens, Winnipeg becomes a much better prospect for NHL hockey.' "

It is important to keep the horse and cart in the correct order, now that it is open season and on struggling Sun Belt hockey teams.

Most of you know, even if the media does not properly acknowledge it when they're covering those Make It Seven rallies, that raw attendance totals are not a good tell-all baseline. Average ticket price has to be factored in (which is part of why the Phoenix Coyotes with their $9 tickets are beyond saying). Secondary ticketing (which can get pretty greasy) also counts. Is there a resale demand when people or corporations who have tickets opt not to use them? Last, but by no means least, in the NHL you have to sell the luxury boxes, which brings it back to Winnipeg being a warehouse town. It is not a town of big spenders, not that there's anything wrong with that. As the writer from canadianbusiness.com put it:

"The only way the Winnipeg Jets will succeed is if they sell all 50 of their corporate boxes, and at a much higher price than they do now. Currently, a suite at the MTS Centre, for Manitoba Moose games, costs between $43,500 to $67,500. At Rexall Place, where the Oilers play, boxes run from $49,200 to $410,000 a year, while luxury suites at the Air Canada Centre cost $500,000. In order to make money, arena owner True North Entertainment would likely have to significantly increase its annual corporate box costs. The problem, however, is that it might not find any buyers.

"Warren says that so far, no one that he knows is willing to purchase a suite at NHL prices. 'I haven't seen the corporate community step up,' he says.

"Warren knows because he's already asked. 'I spoke to one senior executive with a Winnipeg-based insurance firm point blank whether his company would buy a luxury box. He said no. Another fellow in town, Doug Harvey from Maxim Truck & Trailer — he's a huge hockey fan — also said no. Unless you get a guy like Harvey on board it's tough in this market to make those revenue targets.

" 'It's the cost,' he adds. 'They just don't see the benefit. They don't run enough clients in from out of town to make it worthwhile.' "

It is something to keep in mind, since Winnipeg talk flared up two weeks ago in connection with the Atlanta Thrashers (Scott Burnside at ESPN.com said June 8 the Thrashers are unlikely to relocate, but that does not mean Winnipeg is not in the game). As much as we would all like to Make It Eight for chauvinistic and patriotic reasons, you got to keep your eyes peeled to the economics. That's not a business guy talking, that's a sports guy talking (sad but true, maybe).

Related:
Sports: The return of the Jets?; Winnipeggers would love to have NHL hockey back in their city, but it's going to take more than nostalgia to fuel a successful franchise (Bryan Borzykowski, canadianbusiness.com)

NHL: Nothing good happens after June 5th

These are the days when you wish someone would plant a bug in Jim Balsillie's ear to underwrite a pro hockey league which would offer something different, like a snowball's chance in hell of deciding a champion before the end of May.

There is little need to join the chorus that includes Michael Farber at Sports Illustrated, Cam Cole at the Vancouver Sun and Larry Brooks at the New York Post, who got off on some of the better rants about the Stanley Cup final not starting until June 5. Far be it to point out any members of the press corps, especially those from Canadian outlets, could always ask their bosses to let them pass on covering the final and devote less coverage to hockey (fat chance).

The questions really are what you do as a fan who's followed it all season (not watch the final?) and how late the final could run in 2010, when the Olympic hockey tournament in Vancouver will run from Feb. 16-28.

On the first question, Hockey in June does not work from a fan's perspective, never has, never will. Three years ago, CBC lost a million viewers between Games 1 and 2 of the Edmonton-Carolina final (it went seven games, which brought casual followers back).

The games can be very well-played, but to borrow a phrase from Mark Moore's book Saving The Game, the players are not on the hook if it's hard for an observer to get inspired. It is weird to wake up on a gorgeous Sunday in May and realize the Chicago Blackhawks and Detroit Red Wings are playing a third-round game that afternoon. The day is much better suited to going on a long walk than being indoors watching hockey. Nevertheless, the NHL blunders on:

"If the series begins June 5 and goes seven, it would be the latest-finishing Stanley Cup final in a non-Olympic year since 1999, when Brett Hull's toe-in-the-crease goal won it for Dallas at 1:30 a.m. Eastern, on June 20 — after which I distinctly recall NHL senior vice president of hockey operations Colin Campbell telling me the league simply had to find a way to end the hockey season before June." — Cam Cole, Vancouver Sun

The reality is only with the NHL do you have long-time followers saying, "I just wish the season could be over with." Baseball still manages to wrap up in October more often than not. The NBA improved its product by eliminating the long layoffs between games (David Stern also made a good deal with TNT so the Association wouldn't have to Gary-rig its schedule to suit a broadcast network).

This has the air of "renovating the restaurant you don't own," but there's a common-sense solution. The league could shorten training camp and pre-season and start the regular season around Sept. 20. The salary cap dictates who is going to make the team. The players have have personal trainers to help them stay in shape. The four-week training camp is just a holdover from the old days when players spent their summers pounding beers and looking for a piece of strange. The teams would save money, which heavens knows a few such as Atlanta and Tampa Bay wouldn't mind.

Meantime, there is the fun question of how late the season might run in 2009-10. The NHL's TV contract with NBC is up. That might eliminate the possibility of once again, as Farber put it "ben(ding) over backwards to plant a big wet one on the backside of the Peacock." ESPN would be more accommodating. That is counter-balanced by the Olympic break. Sports Business Journal reported a while ago that NHLPA boss Paul Kelly wants an even longer break that the league has in mind, so the NHLers can march in the Olympic opening ceremonies.

The point is the obvious (obvious since it was obvious three bloody seasons ago, even to a self-acknowledged master of the obvious). Nothing good happens after June 1. The NHL has to put that into practice, just as everyone eventually learns nothing good happens after 2 p.m.

The whole Winnipeg question

It deserves to be passed on. Tom Brodbeck, the City Hall columnist at the Winnipeg Sun, had the heart to break the harsh reality for all the Bring Back The Jets-Setters:

".... what it really boils down to is what owners can charge for ticket prices versus what their player salary costs are projected to be.

"It's really that simple when it comes to sustaining an NHL franchise.

"This is not the NFL or Major League Baseball, which enjoy lucrative television revenues. TV revenues for the NHL are modest.

"NHL teams rely much more on gate sales to pay the bills. And there's a huge difference between a team that can sell tickets for $50 to $70 and ones that can sell them for more than $100. A half-decent ticket for a Vancouver Canucks regular season game, for example, is $130. Is there enough jingle in the jeans of Winnipeggers to pay that kind of freight on a sustained basis?

"According to Statistics Canada, we have among the lowest average weekly wages in Canada. In 2008 only PEI, Nova Scotia and New Brunswick had lower wages than Manitoba.

"This isn't the 1990s, where you can sell $7 hockey tickets at 7-Eleven. The world of hockey has made a tectonic shift since we last had a team. And being near the bottom of the Canadian wage-earner list does not help our cause."

Again, that doesn't mean it's folly to root for a Jets revival. Brodbeck pretty much hit the nail on the head. Winnipeg is not a town of big spenders. There is kind of a warehouse mentality, which is not necessarily bad or something to be made fun of, but it's undesirable to the NHL.

Related:
Cash and the NHL; Manitoba's economics are not inviting (Tom Brodbeck, Sun Media)

It needs to be said: Bring back the Jets

The blood feuding between Jim Balsille, Gary Bettman and now Jerry Moyes has an honourable end. If the NHL won't go to Southern Ontario because of the potential financial damage to the Leafs and Sabres, The Coyotes should just go back where they came from.

They need to go back to Winnipeg.



For all those who believe this idea is full of crap, hear me out.

The arguments against such a move are usually the following:

Winnipeg is too small.

Winnipeg never supported the team with butts in the seats.

There isn't enough corporate support.

The MTS Centre is too small.

The NHL's Salary Cap keeps rising to points where the Jets could not be profitable.

I don't agree. Not anymore, with 13 years of sober second thought.

The Jets left in 1996 because there was no arena suitable for an NHL team. Yet fans still came and made the old barn one of the loudest around.

While no Stanley Cup games were ever won there, there were historic games involving the Winnipeg Jets during a time when they had one of the best teams in the game.

While the MTS Centre would be one of the smallest in the league, it would be one that's filled to capacity now that the NHL's been gone for 13 years, just like in Minnesota. If concert attendance is any indication, I would expect 15,000 paying customers a night and that's better than a lot of existing franchises get. Prior to the recent surge in interest in Boston, were competitive with an Original Six franchise and a couple of others . And it's better than Phoenix actually gets now.

To be fair, there were nights where attendance dipped to around 9,000, when it was -40 C without the wind chill when the franchise's future was in doubt, but I'd bet no less than 90 per cent of those people PAID FULL PRICE for their tickets. Try that in Phoenix 90 per cent of the time.

Any argument that Winnipeg is simply too small to support an NHL team probably needs to look at the example of a pretty successful corporation.

Maybe you've heard of it. Ikea.

Stats Canada says the metro area is 712,000 people as of 2007 and shows slow growth every year since 1991, save for 1997, the year of the Flood of the Century. After years of saying Winnipeg needed 1 million people for a store to be profitable, Ikea has decided to set up shop in the city. That's a pretty significant change of heart for a multinational that makes billions in profits.

They aren't the only ones making such a move.

In Ikea's case, they probably figured out that people in the Canadian prairies will drive longer distances if they want something because they are more accustomed to doing it. People living 90 minutes from city limits will buy season tickets for the Jets. This may not apply in Winnipeg itself, as some people won't drive across the city for a date. But people REALLY love hockey in this neck of the woods.

As for corporate support, I can't argue with economics. Southern Ontario has more corporate dollars. With roughly 12 million people to serve, there will be. But here's another kicker. Car companies are hurting. Steel mills are hurting. Manitoba's economy has not suffered like others. And there's simply enough proof out there that the city can support the team and make money at it. That's better than several other places already on the map.

But logic may not win this argument with Mr Bettman. Arrogance will.