Battle Brews Over Preds’ Move North of Border
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On Friday, without a single game on its schedule, the National Hockey League will officially open the 2007–08 season when it holds the annual draft in Columbus, Ohio. Once the draft is complete, free agency season will kick off on July 1, even as salary cap numbers still call for adjustments. Getting ahead of itself? Not really.
NHL commissioner Gary Bettman is keenly aware that his league has those, and more than a few other issues, to settle between now and the beginning of training camp in September — and an ongoing situation in Nashville tops the agenda. A co-CEO of Research In Motion (maker of the Blackberry device), Jim Balsillie, has reached a deal to buy the Nashville Predators from owner Craig Leipold, and it appears that Balsillie wants to move the franchise to Hamilton, Ontario as soon as he can. To that end, Balsillie wished to appear before the NHL Board of Governors to discuss the purchase during the league’s June 20 meeting in New York, but the proposed sale is not on the agenda and Balsillie has not exactly endeared himself to the NHL’s 29 other owners since reaching a tentative deal with Leipold.
The Canadian businessman has shown remarkably poor judgment in his second bid to purchase an NHL team in a year. Last fall, Balsillie signed a deal to buy the Pittsburgh Penguins from the team’s principal owner, Mario Lemieux, and billionaire investor Ron Burkle, but Balsillie withdrew his offer once it became clear that a clause would keep him from moving the team from Pittsburgh. Burkle and Lemieux eventually worked out a deal with Pittsburgh, Allegheny County, and Pennsylvania state officials to build a new arena and took the team off the market.
Now in his second go at a hockey franchise, Balsillie’s generous offer for Leipold’s Predators is rumored to be in the neighborhood of $225 million, a sum that must have pleased NHL owners, if only because of its potential capacity to elevate the franchise value of a small-market, money-losing team, and others like it. But Balsillie has also rubbed some the wrong way: Although he has not completed the purchase, the would-be owner is already vying with Hamilton, Ontario, city officials for use of the city’s Copps Coliseum, as well as the rights to run events in the building. Balsillie has also started selling 2008–09 season tickets for the team in a city that has not been granted an NHL franchise.
Meanwhile, Leipold intends to opt out of his lease with Nashville by invoking what is called a “cure.” The cure allows Leipold to give the city notice should the team fail to record a minimum attendance average of 14,000 a game. Under this provision, Leipold can break the lease and move elsewhere. Indeed, Nashville was a few hundred short of 14,000 in its building per game in 2006–07.
But Tennessee fans won’t let Leipold go without a fight. In an effort to push attendance above the 14,000 average, Nashville business owners have started a season ticket drive — an effort undermined by Basillie’s ticket sales in Hamilton. Nashville’s underlying problem has never been with fans, though, but rather a business community that has turned its back on the Preds during the 10-year period the franchise has been in the city.
At some point this summer, the situation will come to a head. Leipold claims to have lost tens of millions of dollars during his ownership of the Predators; Balsillie is eager to bring home a hockey team while the Canadian dollar shows signs of strengthening, and a group of local Nashville businessmen has expressed interest in making a bid for the team. There is also disagreement among Nashville city attorneys about the terms of the cure.
Of course, Balsillie doesn’t own the franchise yet and may never own it. As is the case with many professional sports leagues, Balsillie could find himself pushed or asked to step aside by current league owners acting in the best interest of the entity; the NHL might also choose to grant Balsillie an expansion franchise down the line.
Meanwhile, fallout from declining television viewership — the 2007 Stanley Cup Finals broadcast averaged fewer than 2 million households — continues to dog Bettman. He acknowledged sagging ratings among American viewers on Monday at the 29th annual Hockey Achievement Award Dinner, hosted by the Canadian Association of New York.
“I understand why the questions are asked,” Bettman said, addressing the dismal TV ratings. “But I don’t think they are the defining element that some people will make them. For virtually all sports, the ratings are down and have been. We are obviously no exception. We wish our ratings would be higher. But we know the product on ice has been terrific. We have record attendance. Fans are connecting with our games in terms of new media.
“People are going to have to adapt in terms of how they evaluate how a sport is doing. I think [what] you have to understand first and foremost is that people are consuming all of the content that is available to them in different ways. This applies to all sports. … We think we are at the forefront with the deals we have been making with YouTube, Google, and Joost, and the list goes on and on.”
Indeed, hockey can’t be suffering too badly if Balsillie will plunk down more than $200 million, and Kansas City built an arena to entice the NHL. Even film producer Jerry Bruckheimer is interested in investing in a Las Vegas expansion team.
During Bettman’s tenure, the NHL has put expansion teams in Miami; Anaheim, Calif.; Nashville, Tenn.; Atlanta; St. Paul, Minn., and Columbus, and relocated a Quebec City club to Denver and Winnipeg to Phoenix in an effort to create a national television footprint in America. Balsillie’s plans for the Predators threaten to undo part of Bettman’s grand scheme. The commissioner will have to meet that battle head-on.