Time For Gary Bettman to Make His Move
Now is not a good time to be NHL Commissioner Gary Bettman. A quick survey of the NHL scenery shows several teams with harsh ownership questions including; New York Islanders, Phoenix Coyotes, and St. Louis Blues. Bettman also has the upcoming labor negotiations to prepare for and #1 on that agenda is going to be the failings of the current salary structure in evening the playing field for all teams. This failing is evidenced by the sheer number of teams experiencing financially. Before Bettman already addresses the next round of labor negotiations though, he is confronted by a more pressing problem; what to do with the Phoenix Coyotes.
The former Winnipeg Jets were relocated to Phoenix as the Coyotes in 1996. Since then, the franchise has however to produce a single profitable year. The NHL secretly took over operation of the troubled franchise early in the 2008 – 2009 season. Former owner Jerry Moyes, citing tens of millions of dollars in losses, attempted to place the franchise into bankruptcy protection with the intent of selling it to Canadian billionaire, Jim Balsillie, in May of 2009.
Balsillie had already established himself as slightly of a villain within NHL headquarters. He had already engaged in questionable tactics in past attempts to buy the Pittsburgh Penguins and Nashville Predators. Balsillie employed a negative media campaign which some say was designed to excursion down the value of the Nashville franchise with the purpose of preventing possible investors from purchasing the Predators and keeping it Tennessee. This earned him no friends within the NHL.
ultimately the case headed to bankruptcy court where bids to buy the team were submitted. With Balsillie’s name already in the hat, the NHL felt forced to submit its own offer to buy the team from the Moyes ownership group in order to protect its presence in Arizona. Two other contenders surfaced as interested parties: Jerry Reinsdorf, owner of the NBA’s Chicago Bulls and MLB’s Chicago White Sox; and Ice Edge Holdings, Inc., a Canadian conglomerate also willing to keep the franchise in Phoenix.
Ultimately, the bankruptcy court chosen the bid of the NHL and the league formally took over operations near the start of the 2009 – 2010 campaign. The NHL’s intention was to stabilize the franchise and sell it to a party willing to keep the team in Arizona. Again, the Reinsdorf group and Ice Edge surfaced as possible buyers.
The first order of business has been to negotiate a new lease agreement with the city of Glendale who owns the arena in which the Coyotes play. Many financial experts have said in order for the Coyotes to ever be financially viable in this market they would have to have a more popular lease.
Initially the Reinsdorf group entered into a memo of understanding with the city but several media reports have suggested the deal between the two has fallen apart. The city then engaged Ice Edge Holdings, Inc. in hopes of working out a deal which would keep the Coyotes in Phoenix but that deal has also reportedly hit a snag.
Right now the team is again in limbo. Rumors have circulated the NHL has a possible buyer in Winnipeg willing to buy the franchise and move it back to its original home in Manitoba. The city of Glendale is scrambling to keep its team. Bettman is in a no win situation it seems; or is he?
It would appear Bettman has three options: keep control of the struggling franchise and force the 29 other owners to front the operational losses of the Coyotes; strong-arm the city of Glendale to make concessions on the arena lease; or let in it may have been a mistake to move a team to Phoenix in the first place and sell the team to the buyers desiring to move the franchise back to Winnipeg.
None of those options are particularly palatable. The other 29 owners have already grumbled about having to put up the cash to keep the Coyotes afloat and are doubtful to be willing to do so indefinitely. Bettman has already attempted to continue his distance in negotiations between the city and other possible buyers on the arena lease agreement. And as mentioned, would Bettman be willing to swallow his pride and ego by agreeing to a sale and move back to Winnipeg?
Maybe there is an out for Bettman. What if there was a ready-made justification for agreeing to move the team out of Arizona, one that removes at the minimum some of the guilt from the NHL Commissioner? Those who have been paying attention to the polital goings-on in Arizona should be familiar with the recent immigration bill signed into law there. Without going into great detail, the law extends the same rights the federal law enforcement agencies have in asking people to present documentation proving their immigration position to all local law enforcement agencies in addition.
This law has already been met by stiff opposition and criticism from a number of different fronts. Unsurprisingly, many civil rights groups have been outspoken in their opposition of the bill. Calls to boycott any businesses based in Arizona have been voiced. already California Governor Arnold Schwarzenegger joked about the law in a speech recently given in Georgia. He went further by saying he would never sign into law anything like Arizona’s immigration bill.
On the sports side of the ledger, Arizona is scheduled to great number the 2011 MLB All-Star Game. Michael Weiner, head of the MLB Players Association has also voiced opposition to the law. US Senator Robert Menendez (D – New jersey) has asked that the player’s union officially boycott the game next year.
The last time Arizona was embroiled in a controversial issue like this was back in the late 1980’s and early 1990’s. At that time Arizona was one of only two states in the union which did not recognize the birthday of Martin Luther King Jr. as an official holiday. Ironically, Arizona was set to great number another major sporting event, Super Bowl XXVII, which was scheduled for January of 1993 in Tempe.
In 1990, the citizens of Arizona had the opportunity to vote on a measure which would have made King’s birthday a holiday. The measure didn’t pass. The NFL moved Super Bowl XXVII to Pasadena, California as a consequence.
ultimately Arizona finally woke up and now Martin Luther King’s birthday is famous there; but only after a tourism boycott adversely affected the Arizona economy. The NFL also made nice by giving Arizona Super Bowl XXX in 1996.
If Bettman has been paying attention and realizes he may not have any other choice other than selling the franchise to the Winnipeg group, he may have his justification in front of him. Certainly any possibility of action designed to weaken the Arizona economy as a consequence of the immigration law has to scare Bettman. Phoenix is already hemorrhaging money so any threat of further damaging the franchise financially has to be taken seriously.
Precedent has been set by the NFL. The MLB Player’s Union may take a strong course of action between now and next year’s All-Star game. The door is open for Bettman to take action; if he wants to.
No one wants to let in they’ve made a mistake; least of all the man responsible for a multi-national organization such as the NHL. But it’s hard to argue with the reality confronting him. The Coyotes are one of many franchises in trouble. In order to stop the bleeding, Bettman is going to have to make some hard decisions. What better time than now to bite the bullet and do it. Move the Coyotes back to Winnipeg and move on to the next troubled franchise.