Thursday, May 7, 2009

Why I wouldn't buy season tickets in Southern Ontario just yet...


If you're in Canada or in one of the many great hockey markets of the US (Boston, New York, Minnesota, Chicago, Detroit, Los Angeles, etc) you've already heard that a Canadian billionaire is trying to buy the financially distressed Phoenix Coyotes on the condition that he can move them to Southern Ontario, Canada. This is a major 'powerplay' by the owner of Blackberry to buy an NHL team and move it to Canada.

The NHL is very much an old boys club, run by politics and odd rules. You can read Money Players by Bruce Dowbiggin to get a sense of just how many wacky characters owned teams and the many incidents in ownership-player relations since the 1950's. Reading about the Ottawa Senators and Tampa Bay Lightning getting expansion teams without either the expansion fee money or the facilities shows that the rules of this group can be easily broken/bent.

After trying to buy the Pittsburgh Penguins and play by the NHL rules, only to get the deal pulled on him, Balsillie is now playing by his own rules for the second time. He's already created a website about the potential purchase and it is as big a slap in the NHL face as the season ticket sales he conducted in Hamilton before his purchase of Nashville Predators was final (it fell through).

A lot of people think his billions, his large offers and his clever negotiation will give the NHL no choice but to let have a team and put it into the Southern Ontario Market. I don't think it will. Here are my reasons:
  1. The NHL has the right to reject any owner or team from league play. As long as they have a majority of owners onside, they could 'freeze' any team out.
  2. The NHL wants to save that Southern Ontario area for an expansion team. Much higher price for an expansion team, and the money gets spread out evenly to all teams (instead of the money going all to an outgoing owner in a sale process)
  3. These group of owners, who pay the commissioner's bills and call the shots, are a remarkable bunch of oddballs sometimes. Consider that the deceased Bill Wirtz of Chicago never showed home games on TV because he didn't want people in Chicago watching the games for free. He watched the team's season ticket base fall below 5000... and only after his death (meaning the return of televised games) has the city become hockey mad once again.
Finally, an excellent book that I'm reading shares some sport economic theory on the whole issue. As per Ross and Symanski's book every major league needs a prime unused market to give all other owners more leverage in their own cities with governments and local groups. That's why there is no NFL team in Los Angeles and why there is no Southern Ontario team.

We'll all be watching to see how it enfolds, but I don't think that the Coyotes will be moving to Southern Ontario. Sadly, the team will continue to collect dust like the many foreclosed homes and abandoned luxury items in Arizona.


lank89 said...


Sport Management Steven said...

Indeed. Maybe they can send the Coyotes back to Winnipeg with an apology. :)

I really wish the MTS center was built with the seats to handle NHL attendance.

Druski said...

True... somewhat. If the MTS Centre was filled to capacity every game, attendance would only beat out 4 NHL teams. Those being Atlanta, the Islanders, Nashville, and *cough* Phoenix.

Mind you that's based on the NHL's official attendance, not sure how many of those are actual people in paid seats...

Sport Management Steven said...

I think there is a big difference between attendance and paid for attendance in the NHL, sadly a big difference.

Would Winnipeg have the luxury boxes and the corporate support to make a team happen. That is what it will really come down to.