NHL and You

This should have been submitted to Darren Rovell over at CNBC. He was accepting articles on sports business to run on his widely popular blog. Unfortunately, I only have opinion and not facts to back up my arguments so it stays here, at the Sandwich Shoppe, where we can argue to about my theories.

Although the Montreal Canadiens are the on-ice story of the playoffs, it is the Phoenix Coyotes, who were eliminated in the first round that are still making noise off the ice.

For the past year, the Phoenix franchise has been in limbo. Their owner, tired of losing money (almost $300 million in) decided to sell the franchise, he had a buyer with lots of money in the bank, but this owner had one condition – he wanted to move the Coyotes to Hamilton. Jim Balsille of Research in Motion (blackberry) fame wanted to make it seven NHL franchises in Canada, but the way he operated did not sit well with the NHL and its board of governers. His bid to buy the franchise was turned down. This led to an off-season of legal battles as he continued to pursue his dream of owning an NHL team and one that would play in Canada.

With the NHL in charge of Coyotes they produced a season for the ages, but ran into a brick wall in the playoffs and were eliminated in the first round. This was the start of their off-season and apparently another filled with trying to find a new owner. First to put their hat in the ring was Ice Edge Holdings. A group of hockey loving Yale graduates who have a dream of owning a hockey team. They had agreed to keep the franchise in Phoenix, but unfortunately for them, they didn’t have the cash flow. Their plan was to get bank loans and gain other support once the deal for the team was in place. This was a difficult situation for the NHL as they couldn’t be certain what type of ownership they were actually partnering with.

Also, would this group of young businessman be willing to lose the $300 million someone like Balsille would? Probably not. Next was Jerry Reinsdorf. Reinsdorf is also the owner of the Chicago White Sox and apparently the best negotiator on the face of the earth. He made a sweat heart deal with the city of Glendale that if he purchased the team that he would not be on the hook for any losses the team had, and we aren’t talking about losses on the ice.

Unfortunately for Reisendorf the City of Glendale came to its senses and decided there are other things more important than funding professional ice hockey. Back in the picture came Ice Edge holdings and a new group – CanWest, who wanted to purchase the team and relocate them to Winnipeg. This would make the Coyotes come full circle as they started as the Jets in Winnipeg. After a tense evening of negotiations on Monday, it looks like the City of Glendale has decided that it likes its hockey too much and have bailed out the team. They will support it financially so that it becomes a viable business in the desert. Is this in the best interest of the NHL? We’ll have to wait and find out next off season perhaps.

What could the NHL do instead of playing all these games with different potential owners? Here is my radical plan to inject new life and new money into the NHL…
- Fold Phoenix and Tampa
- Charge new owners $350 million expansion fee for these two teams
- Jim Balsille and the CanWest group would step to the plate immediately
- Allow Balsille to put the team in Toronto and the CanWest group to put the team in Winnipeg
- The Phoenix and Tampa teams move as a whole to Toronto and Winnipeg. An elaborate coin toss ceremony is organized and televised to see which city gets which players.

Although, this scenario is not likely, it would infuse lots of dollars into the league, put a second team in the biggest hockey market, add two Canadian teams and bring in two owners with deep pockets. This sounds like the perfect moves and that is why it won’t happen.

Even though I suggested the above, this is what I would really like the NHL to do. A lot of this is based on watching Olympic hockey this past February. It was the best players playing all the time and made it really fun to watch (this from a non-hockey fan).
- NHL goes to 24 teams
- 12 Canadian teams and 12 American based teams
- 4 divisions of 6 teams each, just as an example we’ll use direction.
o East and West would be Canadian division
o North and South would be US division
o The East/North and West/South would match up in the playoffs so you could have the possibility of 2 American or 2 Canadian teams in the finals (or one of each)
This would give each team a deeper roster, the quality of minor hockey (AHL, ECHL) would grow as players try to break into the NHL and it would definitely bring the excitement that the original 6 had way back when.

Tell me you wouldn’t want to see that? What do you think of these radical proposals?