Should the NHL actually return next season, the outlook is dire for franchises in non-traditional hockey locations like Nashville, Anaheim, Miami, Tampa Bay, Atlanta, Phoenix, San Jose, Dallas and maybe even Columbus. In other words, about one-third of the league.
These aren't your hockey-mad towns in which generations have been brought up in the ways of wrist shots and forechecking. Some of the northern towns in which there's not a hockey fan under every rock still turn up enough to fill their arenas. In some, the joke is that 17,000 of their residents are hockey fans, and they go to every game.
How is the NHL supposed to work, though, in towns where folks don't especially miss pro hockey and have put through a year without it, discovering that their lives are no worse than before the NHL hit them up for publicly-financed arenas? Some talk already suggests contraction, though not on the scale suggested by the notion that one-third of the teams are in jeopardy.
A more palatable solution for some owners of struggling teams, obviously, would be to sell and let the rest of it work out as it will. It could be that a wave of franchise relocations will ensue. And it makes a certain amount of sense, though not much, that Cincinnati would be in line for at least a tease by a desperate NHL franchise.
The upsides for the NHL aren't too hard to see, but neither are the downsides. To the good, Cincinnati is a major league town with a feel for hockey. In time, given a few successful seasons for a local franchise, that base of 18,000 fans could be developed. We also know, though, that Cincinnati hockey fans of recent vintage are especially motivated by low prices, and this is presicely where the NHL is known to fail.
But if the league and its players can make a labor agreement that cuts operating costs for franchises, prices could be brought into line. Then again, lacking a good television contract, the NHL can't possibly turn up enough revenue to keep ticket prices at acceptable levels for the general public.
Underlying all other considerations is the egotism of the wealthy, which is the true source of franchise prices exceeding $100 million. The Nashville Predators entered the NHL in 1997 for the expansion fee of $80 million, with the franchise valued at $111 million by Forbes Magazine in 2004.
Yet the only true indicators of value are the price for which one party will purchase an entity and the price for which the other entity will sell it. One report out of Winnipeg, which seems remarkable on the face of it, quoted an anonymous NHL chief financial officer putting the price of the Predators at an absurdly low $40 million. We say that's absurdly low because we've never seen a league destroy and degrade itself quite how the NHL is going about it.
At the end of all this lockout nonsense, $40 million could be about right. The Mighty Ducks of Anaheim, the parent of the former Cincinnati Mighty Ducks operation, recently sold for $75 million to billionaires Henry and Susan Samueli, who own the Ducks' arena, The Pond. The Samuelis decided to take over their arena's main tenant, even though the Ducks lost $40 million over the last two seasons in which they played.
Consider the St. Louis Blues, who must be counted as one of the NHL's premium franchises, a top six team in paid attendance for each of the past four seasons. Of the NHL clubs that neither reside in Canada nor are among the original six -- that's 24 franchises -- the Blues and the Philadelphia Flyers are the perennial strongmen. The Blues always make it into the playoffs to the delectation of St. Louis fans, who packed the Savvis Center to an average of 18,560 daily patrons the last year they played NHL hockey.
The couple that owns the Blues, Bill and Nancy Laurie, are Wal-Mart heirs, so it's not like they can't afford an expensive hobby. But even they can't put up with the Blues.
In a statement announcing the Lauries' intention to sell, Blues President Mark Sauer said the club has lost $60 million in the past two years, while the combined cash deficits for the Blues and the Savvis Center since the building's 1994 opening exceed $225 million. Sounds like the Wal-Mart heirs might be willing to take a cut rate on their franchise, if losing $30 million per year is their alternative. Figure they might sell the club for $40 million, absorbing the equivalent of two years' losses in the sale, and chalk it up to experience.
Of course, that's exactly what the Lauries don't have in mind, though you wouldn't know it from the team's rhetoric. Dig this set of quotes attributed to Sauer in the wake of the Blues' sale announcement:
"Substantial future losses are projected even if you take into account what we believe will be a very successful resolution to NHL collective bargaining," Sauer reportedly said. "Those projected losses result from the current high sales and amusement taxes and the absence of city, county and state financial support of the debt service and operations of Savvis Center."
What a pathetic performance of panhanding. Even if the NHL reaches an agreement that's amenable to the team ownerships, the Blues are begging for tax relief and help from local governments to pay down their debts. It's difficult to fathom the lameness.
So maybe a failing NHL franchise in the next few years will talk about taking its act to Cincinnati. It might even sound reasonably priced. But don't be tempted.
It's a bad act. Minor league hockey is good enough, and it probably will be back soon enough.
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