Buying in to an NHL franchise is not buying a new or used car. When you buy a car, you can unload it to the highest bidder when you please. When you buy in to the NHL, you are buying in to a league of 30 teams run by 30 owners who with the commissioner dictate policy on what they think is right for the league. Even though a lot of that rationale is sick and twisted (even I’m trying to figure out how or if Phoenix can succeed long-term in its current situation), you’re buying in to the collective thinking and direction of the group of owners.

If you look in to past ownership issues (and even current ones), the league will do what it thinks is best for the league (again… even if it’s sick and twisted to the outsider’s perspective) when finding a new owner or investor for a team. Moyes didn’t buy in to that strategy, dragged his heels, went to an outside investor who did everything BUT follow the league guidelines to purchase a team, then kicked and screamed all the way until a judge determined the result. I think this lawsuit is more about collecting for losses incurred while running the team and court costs, and less about sending a message to scare potential investors.

Again, I don’t know how Phoenix succeeds long-term, and I do believe that the NHL should return to Winnipeg, Quebec City, and debut in Southern Ontario, but the fact is as long as this league is the premiere league in North America for hockey, then you have to follow the league rules when buying in. That’s how any group investment works, and if you don’t like the rules or direction a potential investment is going in then you don’t have to buy in to it.

Posted by Rick on 03/06/10 at 01:00 PM ET

I have to agree with the league here… When you buy a team, you’re purchasing franchise rights. While I’m not familiar with the NHL franchise agreement, I know from other franchised businesses that you can’t just do whatever you want with your store and if you do, you’re subject to being sued by the parent organization.

I don’t know why the franchise aspect has been so underplayed in the Phoenix case, particularly when Balsillie was involved. If a Cold Stone goes bankrupt, I can’t just buy it and move it wherever I want. Why would franchise agreements not be valid for a sports league?

Posted by Eric from Ann Arbor on 03/06/10 at 01:37 PM ET

Agree with PSH. Regardless of whether or not the league CAN sue an owner for behaving as Moyes has, the NHL actually doing so makes the notion of buying an NHL team horribly unattractive.

Posted by steve on 03/06/10 at 02:10 PM ET

Conversely, if you are a franchise owner you know that the NHL will do what it takes to protect the remaining owners and not devalue the exisitng franchises by allwoing a franchisee do what they please..

Posted by Hockey1919 from Montreal on 03/06/10 at 03:09 PM ET

It doesn’t protect the value of the Phoenix Coyotes franchise to Jerry Moyes by blocking his chance to sell to the highest bidder.  If I am an individual owner I worry that I may not be able to sell when I want to who I want and that could cost me money (a tremendous amount in Moyes’s case).

Posted by PuckStopsHere on 03/06/10 at 03:22 PM ET

You really have to stop with this line of criticism.  Rick (above) is exactly right.  Buying an NHL team is about joining a partnership (with the other 29 owners).  It’s not about buying a freely movable asset like a car or a house.  When you join a partnership you give up certain individual freedoms for the benefit of the partnership.  If one sole partner could make a move that the other 29 partners disapproved of (like selling a franchise to someone that the other partners wanted nothing to do with), you could never keep a partnership together.

For the umpteenth time, the Coyotes had a pre-agreed budget for the season, and these moves (which PSH is blowing completely out of proportion) were well within the budget.  I mean really, they didn’t sign anyone to a 10-year contract, they’re not paying anyone 8 million dollars a year, they simply brought a few guys on board to help them make a go of things during the playoffs.  The moves they made look a hell of a lot smarter than recent absurd signings by teams like the Rangers, Hawks and Flyers.

Yes, technically the incremental spending is funded by the owners, but we’re talking about a couple million dollars here, right?  Divided by 29?  Is that really a lot to ask in order to restore health to an ailing franchise, for the betterment of the League overall?  The teams already have a revenue sharing model since the lockout, so the wealthier teams are already accustomed to supporting the less wealthy teams (with more money than the couple of million at issue here), and who would argue against that?  The League is healthier than ever, ratings and attendance are at 10-year highs, parity has made every game more exciting, where’s the problem?

And the alternative you keep proposing, PSH, is just ridiculous.  Sit still?  Do nothing at the deadline?  Right, the fans in Phoenix will love that.  Why take over ownership of the team if you’re not going to run it like a real team?  Either you fold the entire team, or you run them like a real team and give them the best chance to succeed.  And by doing the latter, you make the team as attractive as possible to a new buyer, which is good for everyone.

Really, the League does a lot of things that warrant criticism, but trying to restore the health of an ailing franchise is hardly one of them.  I would think that a blogger on a top hockey website would understand that.

Posted by HockeyDude from New York, NY on 03/06/10 at 06:48 PM ET

The League is healthier than ever

There is an extreme amount of irony that you would dare to say this when discussing a team kept on life-support by NHL ownership because the previous owner declared bankruptcy and no further suitable owners can be found.

ratings and attendance are at 10-year highs, parity has made every game more exciting, where’s the problem?

These are debateable as well.  Attendance is down this year versus last year.  Ratings in the US have been good on a high numbered cable channel (Versus) that a significant portion of the American public does not even know how to locate on their dial.  The network TV deal with NBC pays nothing up front and does not even bother to broadcast games when it is still NFL season (which is more than half of the NHL regular season).  This parity you speak of is a myth and undesirable.  It means we no longer have elite teams in the NHL. That is a major loss to fans.  The best teams of last year had to shed talent last summer.  The best teams of this year are already planning to do it this season (and in some cases doing it - Chicago’s cam Barker trade is an example).  In the past, we would see elite teams stay together for years and become some of the greatest teams in history (Oilers, Canadiens, Islanders - even a team like the pre-lockout Red Wings, Devils or Avalanche is unlikely to be possible to put together today).  Teams are getting broken up years before they even get to their peak (Chicago is a clear example).

Now onto Phoenix itself

Do nothing at the deadline?  Right, the fans in Phoenix will love that.

Doing nothing at the deadline was good enough for San Jose, Chicago, Detroit ... it is often a smart move.  The basic pattern of the trade deadline is that teams overpay for castoffs from other teams and nothing much changes regarding the playoff picture.  It is hardly the ned of the world to do nothing at the trade deadline.  It is often a smart move.

The problem is the optics look really bad.  The team on welfare shouldn’t be a b ig spender at trade deadline time.

The teams already have a revenue sharing model since the lockout, so the wealthier teams are already accustomed to supporting the less wealthy teams (with more money than the couple of million at issue here), and who would argue against that?

The revenue sharing is a problem in the NHL.  It keeps alive financial weak sister teams which drag down the overall level of the league.  It creates inequities in the system.  A Toronto fan could easily pay about 10x what a Phoenix fan would pay to go to an NHL game (the same calibre NHL game that the Phoenix fan sees - except the Phoenix fan actually has a better team to cheer for).  That is a significant complaint for a bigger market team fan.  Some of the money they are spending to go to a ridiculously over-priced hockey game is sent to Phoenix to allow fans their to attend a ridiculously under-priced one.  I oppose revenue sharing.

Either you fold the entire team, or you run them like a real team and give them the best chance to succeed.  And by doing the latter, you make the team as attractive as possible to a new buyer, which is good for everyone.

There is a third option, which the NHL has chosen (this is clearly a false dichotomy).  The Coyotes have little chance to succeed under NHL ownership.  That said, they have done well.  They have defied the odds to do so.  That said, it isn’t that big a surprise when we think about it.  The Coyotes were a good young team before Moyes financial difficulties first came public last year.  At mid-season they looked like a playoff team.  When the rumor of financial troubles began, everything fell apart and Wayne Gretzky was not a strong enough coach to do anything about it (whereas it appears Dave Tippett is).  They are a young team that should be on the rise - if their uncertain financial support doesn’t interfere.

That said, the NHL cannot run the Coyotes like a real team.  It is financially impossible for them to have a high payroll.  Any good young team will need to raise their payroll and soon to keep their young talent.  Phoenix cannot do this.  That doesn’t mean that they should necessarily be contracted (which is the only other option you offer - again it is a false dichotomy).

Phoenix is on life-support.  This is by necessity.  It seems crazy to imagine that anyone could make money in the Phoenix market playing games in Glendale for many years (at best).  It is almost certain that there won’t be a Phoenix Coyotes in the near future.  They will be moved.  It makes no financial sense otherwise.  It seems that Ice Edge Holdings isn’t happening and nothing else exists as a legitimate plan B.

The irony is the NHL had a solution in Jim Balsillie moving the team to Hamilton and they chose not to do it.  I think the real reason is that with a better economy, the NHL could extract a $200-300 million expansion fee from the owner of a second team in Southern Ontario (so they wait five years and then try to do that…), thus they are not willing to sell to somebody who would circumvent their hypothetical financial gain they think they can get.

It is clear that the NHL would be in better financial shape if they had 2 teams in southern Ontario and did not own the team with the lowest attendance in the league.

Really, the League does a lot of things that warrant criticism, but trying to restore the health of an ailing franchise is hardly one of them

Many of the things that warrant criticism of the league are directly related to the Phoenix situation.  They are its underlying causes. 

The only way to restore the health of this dying franchise is to move it.  I think the NHL is willing to do so, but only to another mediocre market (Kansas City, Las Vegas…) which would likely face its own financial and attendance problems and be a net taker in the revenue sharing system (when Hamilton would be paying into it a lot more than they would ever get out).  Acquiring Derek Morris, Lee Stempniak, Wojtech Wolski etc. really does nothing to restore anything to the franchise (you are wrong it suggesting that it does).

The bigger problem is the lawsuit against the former Phoenix owner.  Perhaps the NHL is within its rights to file it, but it hurts the Phoenix Coyotes.  It shows that if you take over the Phoenix situation, you can lose a lot of money, be denied the chance to sell the team in the only way that gets you out without losing your shirt and then get sued for millions of dollars after the fact.  That hurts the Phoenix Coyotes.  If I had any desire to buy the team before the lawsuit, that desire is completely gone now.  It is a horrible situation you could pay your money to get yourself into.

The Phoenix Coyotes are a blight on the NHL right now.  They are clear proof that the league is not in good shape.  It is hard for them to not make the NHL look bad when they are run under NHL ownership.  If you are a buyer it looks bad.  If you get rid of your talent it looks bad.  You cannot significantly raise payroll (which will be needed soon to keep their talent).  Further we do not know if it is true that the NHL set a budget at the beginning of the season and they are now under it.  All we have is the NHL’s word and the Coyotes word that this is true - and why should we believe them when both denied any financial problems in Phoenix at this time last year.  Further, if the NHL set a budget, if I am the owner of a team paying their way (and in a couple cases in the league my team actually has a lower payroll than the Coyotes), I should be upset to see that they were a buyer at trade deadline time.  It looks bad for the league and my money is being spent in an effort to defeat me.

That said, suing the outgoing owner who already lost his shirt in his ownership of the Coyotes makes things worse.  I cannot imagine any rational person stepping in to run the team in Phoenix knowing that could happen to them if they don’t go along with the league and lose their money on the Coyotes and not complain or try to get out of it in the best method possible for their interests - which the league doesn’t want them to do.

Posted by PuckStopsHere on 03/06/10 at 08:19 PM ET

Right, the fans in Phoenix will love that.

You forgot to mention that this in itself is an oxymoron PSH.

Posted by sjketcheson from Mexico on 03/07/10 at 05:16 AM ET

Rick (above) is exactly right.  Buying an NHL team is about joining a partnership (with the other 29 owners).  It’s not about buying a freely movable asset like a car or a house.  When you join a partnership you give up certain individual freedoms for the benefit of the partnership.

None of this changes the fact that when the parent body sues a member that has been losing money due more to the parent body’s decisions than the member’s, the idea of becoming a member of that partnership becomes very much less attractive. It’s not so much a question of whether or not the NHL can sue Moyes as it is a question of what the ramifications of doing so will be.

Posted by steve on 03/07/10 at 09:59 AM ET