Go Jets, Go!

Despite a failing franchise, NHL Commissioner Gary Bettman continues to move heaven and earth to keep the Coyotes in Glendale, something he did not do when the Jets moved to Glendale 15 years ago. by Jeff Laboon

May 5, 1995 - John Loewen steps to the podium for a press conference. He has the job of telling the province of Manitoba that he and his ownership group has to stop his efforts to save their beloved Winnipeg Jets from relocation south. Mayor Susan Thompson fought off tears. Fans expressed their disgust. No more white outs. No more NHL hockey in Manitoba.

But 15 years later, it seems like the the NHL will return to the province. True North Sports & Entertainment, LLC built a NHL-ready arena, the MTS Centre, in downtown Winnipeg in 2004. With ownership struggles in Arizona and Atlanta, the MTS Centre seems to be the future home of a NHL franchise as soon as this upcoming October. Time continues to tick, though. For the better part of two years, relocation rumors surrounded the Arizona franchise, the Phoenix Coyotes, with Hamilton, Kansas City, and Winnipeg just some of the cities named. Only Winnipeg has a definite ownership group and fan-base in place, making it the most obviously solution. With a clear-cut business decision in front of him, NHL commissioner Gary Bettman continues to leave the city waiting.



The NHL outgrew Winnipeg in 1995. At least, that's what the league led everyone to believe. Winnipeg Arena held approximately 15,000 - not enough in the expanding NHL. Franchises in Anaheim, San Jose, Tampa Bay and Miami joined the league in the early 1990s and the Minnesota North Stars relocated to Dallas and the Quebec Nordiques moved to Denver Colorado near this same time. The league worried that travel costs and operating costs would become too great for small market teams with this new-found growth of the league. After the Nordiques moved, the Jets became the club in the smallest media market in the NHL.

Fans continued to show their support, as they always had through lean years and playoff years alike, but the franchise could not make enough revenue to suit the league's new agenda. An average attendance of 12,500 was not nearly enough compared to most franchises and the Jets made only $13 million in revenue in 1993-94, toward the bottom of the league. Player salaries continued to rise, making it difficult for the Jets to retain talented players or sign new ones. 

The MTS Centre in downtown Winnipeg.

Efforts to save the club during the 1995 off-season went for naught and on October 18, an ownership group led by Richard Burke and Steven Gluckstern purchased the franchise for $65 million. The team seemed like to move to Minneapolis, who lost their franchise years prior. When Burke announced that a deal with Minneapolis would not be reached by the NHL's imposed December 14 deadline, Phoenix became the clear future home of the Jets.

A mere 14 years after Loewen announced that he could not save the Jets, the NHL purchased the Phoenix Coyotes in bankruptcy court after secretly funding the franchise for a year. In 2008, the ‘Yotes lost $9.7 million in operating income, second worst in the league. A stringent lease that promised a hefty relocation fee if the ‘Yotes vacated Jobing.com Arena at Westgate City ensured that the franchise could not move until they found a suitable owner. Enter Jim Balsillie. Balsillie offered to buy the bankrupt franchise from owner Jerry Moyes for $212.5 million on the condition that he could move the team to Hamilton, Ontario. The Hamilton franchise would take advantage of a hockey thirsty market that the Toronto Maple Leafs alone could not quench. But, to salvage the Phoenix market – even though 17 miles separate suburban Glendale from metro Phoenix – Gary Bettman and the NHL stepped in to purchase the ‘Yotes. A bidding war started between the NHL and Balsillie, co-CEO of Blackberry. The NHL argued that Moyes would be breaking NHL rules if he sold to Balsillie, knowing that he would relocate the team.

Moyes eventually settled with the NHL and the league, despite already incurring the franchise’s $25 million of debt, agreed upon a temporary lease with Glendale. The NHL would continue to lose money operating the franchise until a replacement owner arose. The city would have to repay the league $25 million when said owner purchased the team.

Two offers came and went during the 2009-10 season. Already two seasons into funding the franchise – one as the owner and the other as a benefactor of sorts – the league set a December 31, 2010 deadline to find an owner. It’s important to note that Balsillie had the money necessary to take over the team and its debt, move them to a hockey-driven market, and relieve the NHL of this failed southwest experiment.

Commissioner Bettman

  
During this turmoil, the Coyotes became playoff contenders in the Western Conference. The ‘Yotes averaged under 12,000 during the 2009-10 season and slightly over 12,000 in 2010-11, both less than the Jets average before the 1996 move.

The writing was on the wall with the fans not coming despite a winning season. Instead of accepting failure, the league continued to seek out an owner who would keep the franchise in Arizona. Chicago business man Michael Hulsizer offered to purchase the team in December 2010. Only one problem. He did not have the money to afford the team or incur its debt. Hulsizer wanted to pay between $160 million and $170 million for the Coyotes, but did not have enough money to do so.  In this deal, Glendale would sell bonds to pay Hulsizer $100 million. He would eventually pay the city back through parking revenue. The city and its taxpayers would be paying as though they were the majority owners, but that designation would be given to Hulsizer. Thankfully, the Goldwater Institute stepped in with plans to sue the city because of the burden placed on the citizens in this deal.

With no owner in place by the December deadline, Bettman moved the deadline back. This dance continued for almost five months now. The league would set deadlines and ultimatums, hoping to tie the city’s hands, only to realize that they would not be able to get a new owner in time. A new deadline would follow. Wash, rinse, repeat. In the meantime, the NHL and Glendale continued to lose money in what seems to be a no-win situation.

Bettman acknowledged during this merry-go-round that the NHL considers Winnipeg as a future destination for the league. Now, the city has been named the only logical choice by some considering that a lot of the concerns 15 years ago have become irrelevant. The city has a state of the art arena. The salary cap has made it possible for small market franchises to compete. And, unlike Hamilton and Kansas City, the city even has an ownership group in place with True North, the owners of the MTS Centre. All signs and all logic point to Winnipeg, but the NHL remains stubborn in its efforts to keep the dogs in the desert. This persistence leads me to believe that Winnipeg is all just a stunt by Bettman. Relocating back to Winnipeg is just the final card up the commissioner’s hands. It worked with Mario Lemieux when he used Kansas City to pressure Pittsburgh for a new arena. It seems now that Bettman wants to do the same. If it works, he can pat himself on the back and call himself a master negotiator. He forced Glendale into a corner and tricked them into sacrificing the city’s financial future for a hockey team that the fans do not go see – I’m sure the ‘Yotes have fans, but they are not showing up to the arena. If it doesn’t, he can pat himself on the back and call himself a master business man. Glendale didn’t waver, so he can end this bad relationship and restart one with a hockey-loving city like Winnipeg.

Hulsizer

But if he were to allow the ‘Yotes to move back to Winnipeg, Bettman’s ego would be shot. He would be admitting that he made a big mistake in 1996 when he allowed the franchise to move south. He would be admitting that the NHL is not a top sports league by letting a team migrate from the 12th largest market to what will be the smallest in the league behind Edmonton.

As the Detroit Red Wings eliminated the Coyotes from the 2011 Stanley Cup playoffs, it became increasingly clear that a return to Winnipeg was imminent. But still no decision has been made. Last Thursday, Hulsizer left a summit between Glendale and the Goldwater Institute, which led some to believe that the deal may be dying.

The NHL finally sent Glendale an invoice today for the $25 million that the league spent to save the team in 2009, but is this just more posturing? Perhaps I am being paranoid, but Winnipeg Mayor Sam Katz thinks the same. “Do I believe the Coyotes are coming to Winnipeg?” he asked reporters Wednesday. “The answer would be no. I believe the Coyotes are staying in Phoenix. I think we should start looking at some of the other potential franchises.” Years of rumored moves to Winnipeg have left Katz pessimistic. Potential moves of the Pittsburgh Penguins and Nashville Predators never happened – obviously.

The longer the NHL waits to make a decision, the less likely a move becomes. If the ‘Yotes were to move, the league would need to adjust the schedule, realign divisions, and sell season tickets. Rumors are the league has an alternate schedule set – in fact, they supposedly had one in place for 2010-11 - and divisions set for the move – the Winnipeg franchise would play in the Western Conference’s Northwest Division - but that’s all speculation.

A third party entered the fray this week. The Atlanta Thrashers, owned by the Atlanta Spirit ownership group, have been looking to sell. But the Spirit has not found a group committed to keeping the team in Atlanta with enough money to make a deal happen. Tom Glavine, former pitcher for the Atlanta Braves, expressed interest, but does not have the money to make it happen. A source close to the issue told the Winnipeg Free Press that the Spirit would receive $100 million if they sold to True North – a figure better than any Atlanta-based offer. A Winnipeg city councilman tweeted Thursday that a Thrashers-related announcement would be made today, but to no avail. The source said that a deal with Winnipeg is the best situation for the Thrashers, but nothing would happen until the league settled its situation in Glendale.

The same article, by Gary Lawless, says that “Whispers out of the NHL's New York offices have the clock on the deal in Phoenix about to expire -- this week or next.” Perhaps the $25 million invoice was a sign that the clock is actually ticking on hockey in Glendale. Maybe tomorrow morning the owner of the ‘Yotes – um, Commish Bettman – will announce that the franchise is Winnipeg-bound and maybe the Thrashers will respond by moving to Quebec this fall or muddling through another season in Atlanta before a realistic, long-term option arises.

Or maybe Glendale will sacrifice their future for the NHL and the Thrashers will move to Winnipeg.

It’s clear that Winnipeg is at the front of the line for a NHL franchise as long as the True North ownership group is in place. But Bettman continues to drag his feet with the Coyotes, which, in turn, prolongs a move or sale of the Thrashers. The sheer persistence of the NHL to keep the Coyotes in Glendale makes it doubtful that the league will ever completely throw in the towel on the desert. Why now? Why after two years of suffering losses? Why see the writing that has been on the wall for everyone to see? If the league fights every obstacle to keep a team in the 12th largest American market, I doubt they will lay down for the Thrashers to leave the 8th largest one.

With every day that Bettman tries to save his own reputation and help the ‘Yotes stay, it seems less likely the Jets will return.