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Financial Issues Ahead
by Paul on 01/08/09 at 11:10 PM ET
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from Stephen Brunt of the Globe and Mail,
...Because of a lease that makes it virtually impossible to move the team out of its publicly financed digs in Glendale, without entering Chapter 11 bankruptcy protection, and because the team seems doomed to lose huge amounts of money there in perpetuity, it is hard to imagine anyone buying the Coyotes while the team is tied to its current home. That means the league doesn’t have to worry about Jim Balsillie riding to the rescue and making things complicated, but it does have to wonder whether there’s anyone out there who is rich enough and irrational enough to buy the franchise and keep it in Arizona in the teeth of a deepening recession.
So there are no obvious Band-Aid solutions here. And the other NHL club owners, who are all dealing with their own challenges, can’t be thrilled at the prospect of throwing good money after bad (the Coyotes, or at least their lender, cashed a $15-million revenue-sharing cheque last year) to keep the team going beyond this season in what seems by definition a hopeless situation.
Filed in: NHL Teams, Phoenix Coyotes, NHL Talk, NHL Business of Hockey | KK Hockey | Permalink
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In bringing the possibility of contraction to light, Brunt is echoed by other high-profile sports journalists. Rejean Tremblay of La Presse and Corus Sports made a blunt declaration this week that ‘at least six teams will not make it through the end of the 2009 calendar year’.
The economic crisis in North America has already affected sports like auto racing and arena football. Several NASCAR teams, and Honda’s Grand Prix Formula One racing outfit, have suspended operations. The Arena Football League canceled its entire season.
The precariousness of more than one than one NHL franchise could see history repeat itself, though to what degree is a good question. In the late 1930s and early 1940s the NHL went from 10 teams to six, a contraction of forty per cent.
Posted by davetherave from Ottawa, Canada on 01/09/09 at 01:27 AM ET