BlackBerry Billionaire Has the N.H.L. Buzzing

http://www.nytimes.com/2009/05/10/sports/hockey/10coyotes.html?_r=1&ref=sports

by omnivore • 17 years ago

21 14 17 years ago

Balsillie is quite the hokey nut. When I was at RIM, the co-op committee would organize these talks where senior people would talk about what they do, how they got there etc. They were all pretty interesting, except Balsillie's talk, which involved hokey.

Anyway, I'm no hokey fan, but the politics behind this are actually pretty interesting. The NHL commisioner has been in power for a long time and runs the league with a heavy hand, and his primary push over his time has been trying to expand the game to the southern US, which involved moving teams from places like Quebec City and Winnipeg to Phoenix and Nashville. Of course, there is no base for hockey there and so a lot of these teams have very poor attendance and lose lots of money. Due to revenue-sharing, more successful teams have to pay for the loses for less-successful teams, which irritates lots of team owners, who are also governors of the NHL.

Now, Balsillie comes along and tries to buy a team. First The Penguins, then the Predators. The first time he balks after some last-minute addenda to the contract, while the second time he is judged to be too brash and not respectful enough of the established order.

Now comes this attempt. Clearly the Coyotes are a failure of a business - amongst the lowest sales in the league, massive financial loses every year. In order to survive, Bettman must convince team owners (who must approve any move within the league) that his southern strategy is worth perusing, that Balsillie would be an irresponsible and undesirable owner, and that they must keep subsidising the Coyotes for the good of everyone. Balsillie, OTOH, is using three strategies: first bankrupcy court to where he picks up the Coyotes by offering a very good price for a very bad business, second a lawsuit that alleges the NHL promotes anti-competitive practises (trying to keep Hamilton from getting a team, since its close to Toronto and Buffalo) and lastly, appealing to other team owners' business sense, his this move would make the league better off financially.

omnivore4• 17 years ago

I think they're going to eventually cave in. The NHL needs any success stories it can cultivate. Copps in Hamilton isn't exactly a modern arena and it would certainly leave Glendale with an empty arena with no major league team in it...and I can understand Bettman not wanting to alienate a market that built a facility for his (poorly thought out) southern strategy, but I think Team Canada will eventually prevail in this one, as to the casual fan, there's little reason to keep teams in places that aren't successful.

I hope it's the domino effect necessary to remove a few other teams in bad markets over the next few years. Couple that with a TV deal that actually makes sense or gives the league more exposure and I think NHL could solidify itself back into somewhat of the mainstream.

It's still more popular than MLS and that's the only fringe threat for 4th major sport status and I doubt that'll change given MLS will never be the home to the best players in the world unless a lot of rich people start buying MLS franchises and decide to turn the league into their version of the EPL.

sachinag2• 17 years ago

I've worked in the league offices of Major League Soccer. While it's not one of the big four, all the high executives are from one of the big four.

Balsillie has a number of issues: first, Hamilton's clearly in both the Leaf and Sabre territories. Second, the arena in Arizona is brand new and better than anything in Ontario by a wide margin. Third, even if they were going to move the team, Kansas City has a new arena that's perfect for hockey as well. Fourth, moving a team back to Canada doesn't help get the NHL back on ESPN (which is apparently their "Master Plan" to rebuild the league in the States).

Lookit, as a sports fan, I'm in favor of putting teams where fans want them and can afford them. (i.e. the Jacksonville NFL team is a mistake of incredible proportions.) In particular, it makes more sense for the Coyotes to end up in Hamilton than any of the other teams in the NHL (maybe the Preds). But it's not just Bettman's ego that's keeping a team here in the States. There are all sorts of structural issues at play as well. And we haven't even gotten into the "Balsillie is the Mark Cuban of hockey" argument.

omnivore4• 17 years ago

I'm all for moving a team to Kansas City over Hamilton, just given the economics of it, coupled with the whole brand new building in a downtown area thing.

marcusbooster• 17 years ago

For outsiders of the region, Hamilton is basically a suburb of Toronto. Certainly it is it's own place, but it's fair to say there's a lot of back-and-forth between the two, ie. commuting and fan loyalty. It's also a hour away from Buffalo, so there are ties there as well. They question is, what effect does giving this area a new team have on the league overall. Obviously there are fans there, but these fans are already probably going to games in Toronto and Buffalo. Are they expecting to make fans in the area? That seems unlikely. So you are cutting into the bases of 2 other teams in the league for what?

mrtron• 17 years ago

Southern Ontario could probably support 3 or 4 teams.

The issue is that the NHL wants to expand in the US market, and get more TV contracts there. As a result, they are willing to have teams lose huge amounts of money in garbage hockey markets just to satisfy that.

If you wanted strong teams, move one to Ontario. If you want to lose a whole bunch of money for a while and potentially do better in the US market - continue on this path.

omnivore4• 17 years ago

The 5 worst drawing teams in the NHL are: NY Islanders, Atlanta (Expansion), Phoenix (move from Winnipeg), Nashville (expansion) and Colorado (move from Quebec City).

http://sports.espn.go.com/nhl/attendance

Denver is a saturated 4-team market and a weak link team. None of these teams made the playoffs this year and each has their own endemic problems, but I'd argue that the Islanders probably need a new building, but that's not going to happen most likely. The others suffer from playing non-traditional markets and Colorado is fickle about anything other than Broncos, though they'll support a team like crazy so long as they're winning.

Florida and Columbus are 6th and 7th worst in attendance and both are expansion teams that have had limited success (Florida made the Cup Finals some years ago..but haven't been good since and Columbus get swept from the playoffs this year)

Contraction shouldn't happen, but...moving some teams around to better markets ought to and I think this Coyotes move will open that door.

ojbyrne• 17 years ago

If they moved them back to Winnipeg the city would go insane. It seems to me that's a potential alternative strategy.

zandorg• 17 years ago

I dunno how a little email gadget made him billions.

His research centre is the exciting thing, not the NHL.

BlackBerry Billionaire Has the N.H.L. Buzzing

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