$300M to $300: Is the NHL devaluing fans’ trust?

ORLANDO, FL – On a recent weekend amid ownership turmoil, the Tampa Bay Lightning held its annual “Fan Fest” event which featured a charity hockey game to benefit the family of a fallen local police officer. Days later, a courtroom in Phoenix, Arizona was the scene of the latest chapter in the soap opera that could be known as “Days of Our Coyotes”. In between, the NHL Players Association executive board decided that it needed new leadership and fired its executive director during a meeting in Chicago. Three separate events in three separate locations with little more than the sand – either desert or beachfront – beneath one’s feet. Put together, however, the trio would seem to tell  a story where the sand is falling through an hourglass toward stormy seas and the losers once again could be the fans. Let’s start in Tampa. Principal owners Len Barrie and Oren Koules are at odds over who is really running the team – although they supposedly hired Brian Lawton to do just that. The squabbling got so bad that commissioner Gary Bettman called the two into his office and laid out a plan by which the situation could be rectified. Barrie would be given a set amount of time to put together a bid to buy out Koules. If Barrie failed to do so in his given time, Koules would have the same amount of time to buy Barrie out. Which ever one wins will also have to be able to shoulder the weight of money still owed to Palace Sports and Entertainment, the previous owner of the Lightning. Barrie is just about at the end of his time to buy out Koules and so far has not put the cash together. Within the past week, The Globe and Mail reported that Barrie may have misappropriated funds from the Bear Mountain Resort that he co-owns with several high profile former and current NHL players. A report by the accounting firm of Norgaard Neale Camden Ltd. cited numerous transactions including one for approximately $2.5 million that Barrie in turn used as part of his payment to OK Hockey to purchase the team. Following the submission of the report, Norgaard Neal Camden resigned as the resort’s auditor over the “improper and in some cases illegal” activities. Barrie denies the allegations and says that neither KPMG, Bear Mountain’s new audit firm, nor HSBC Bank Canada, Barrie’s main lender, have indicated any problems and that all monies he used have been repaid. The door is now open for Koules, a movie producer who lives in the Tampa area, to buy out Barrie. With the sixth movie in his “Saw” franchise set to come out next month and the bump it will get from Universal Studios’ “Halloween Horror Nights” which will feature an entire “house set” dedicated to Koules’ movies, he appears to be in a position to become the head man in the Bolts’ front office. Should Koules not be able to take over, the league still has two options. They could revert the ownership back to Palace Sports and Entertainment. Failing that, the NHL could buy the team and then resell it to a willing owner. In the case of the latter, there is no telling how long it would take to sell the team so the league would be stuck running it in the interim which could cause a problem depending on what happens in Phoenix (which we will get to). The question now is how much damage all of this bickering has done to the team and its fans. Two straight seasons in the basement of the league have not helped bring people into the St. Pete Times Forum. Neither did having last year’s number one draft pick Steven Stamkos in the lineup with the likes of Vinny Lecavalier and Martin St. Louis. At the team’s “Fan Fest”, the Lightning picked up the baton and set about raising money for the family of Corporal Michael J. Roberts, a Tampa police officer who lost his life in the line of duty. In all, the event raised close to $15,000 for the family, which is a wonderful thing for the team to do. Along the way, they had a silent auction for the jersey that Vinny Lecavalier wore in the charity game with an added bonus of 10 free tickets to a September preseason game for a winning bid over $3,000. In the past, a $3,000 bid would have been a reasonable expectation but with the poor economy and the bickering upstairs making the fans queasy, the winning bid was $300 – still a nice donation for a good cause but no where near what it could have brought three years ago. For Bettman and the league office, Tampa’s troubles pale in comparison to the drama going on in the desert climes of Glendale, Arizona. That is where the Phoenix Coyotes have been playing – and losing huge amounts of money – for several seasons. Owner Jerry Moyes underestimated the effect of moving from downtown Phoenix to Glendale along with failing to get a favorable lease. He’s had enough of bleeding money and wants out. Enter, or should I say reenter, Jim Balsillie. The billionaire who brought us the BlackBerry has been trying to get into the NHL for years. He tried to buy the Pittsburgh Penguins but was shut out. Next was the Nashville Predators and again he lost. Why? Well, Balsillie’s idea is to buy a team and move it to the Copps Coliseum in Hamilton, Ontario some 70 or so miles north of Toronto (he was even selling tickets for the “Hamilton Predators“ before the deal was close to an outcome). The NHL – and in particular Bettman – doesn’t want to upset the Maple Leafs (or for that matter the Buffalo Sabres just a little further south) because the established teams are in “small markets” and can’t afford to lose fans. They also state that the logistics for the Coyotes and the other teams going to play them would become an instant nightmare. So Balsillie is now licking his chops staring at the Coyotes. He has dropped an offer of $212.5 million to buy the team and move it. Bettman sees Balsillie as an evil, evil man and doesn’t want him in the NHL and much of the Board of Governors is with him on it. (In fairness, Bettman probably learned a few things from his former boss, NBA Commissioner David Stern, who has his own 800-pound gorilla in Dallas Mavericks’ owner Mark Cuban.) Bettman even had his fellow commissioners from the NBA, NFL and MLB write “friend of the court briefs” stating that the damage that would be caused to professional sports as a whole if Balsillie were to get his hands on the Coyotes would destroy the concept of pro leagues as we know it. The league thought they had it all worked out when Jerry Reinsdorf (of the Chicago White Sox/Bulls ownership Reinsdorfs) was able to round up enough capital for a $148 million offer. Unfortunately, Reinsdorf met his match when the city of Glendale would not give him the lease deal he wanted so the deal was taken down. In the interim, Moyes – against the will of the NHL – went ahead and filed for bankruptcy, infuriating Bettman. At the present time, a bankruptcy auction is set for September 10th. Balsillie wants in but the NHL said no and made a $140 million offer of its own to buy the team for later sale and/or relocation if a new lease can‘t be worked out in the desert. A third party, Ice Edge Holdings, has added a $150 million deal to the mix but it is contingent upon the league allowing them to play five “home” games in Saskatoon, Saskatchewan (the ice time has already been rented) as well as securing a new, more beneficial lease. Balsillie has cried conflict in that the NHL is trying to make the rules for the auction as well as being a bidder. He has conceded that it might take half a season to move the team because it is close to the start of the season but the NHL is not amused. They have promised to challenge the judge’s decision if they don’t get their way, pushing the auction into the season and possibly creating more financial woes As a footnote to the legal battle, the NHL owners voted 26-0 in July to bar Balsillie “because he lacked the good character and integrity” to join them. Forced to reveal the actual votes by the court, the NHL showed that three teams – Pittsburgh, Toronto and Buffalo (the two teams most affected by Balsillie’s plans) – abstained from voting and Moyes, representing Phoenix, did not attend. Add to that the fact that the NHL has some history in allowing persons of questionable character (see Nashville’s William “Boots” DelBiaggio and his bankruptcy and criminal charges) to become a member of the club and Bettman may be tempting fate or at the very least man-made laws. If Balsillie wins, there’s no telling where it will leave the NHL. As if the NHL wasn’t doing a fine job of confusing the fans, the NHLPA executive board took it up a notch when it decided to fire Executive Director Paul Kelly in the wee hours of Monday morning. Kelly’s release cause a ripple effect as Director of Player Affairs Glen Healy, his assistant Pat Flatley and Hockey-Related Revenue accounting consultant Bob Lindquist all resigned their positions within three days. General counsel Ian Penny was asked to take over as the interim head while a search for a permanent replacement is conducted. The move by the executive board has left many of the members scratching their heads. Published reports say that some felt that Kelly was too friendly with the NHL office. Others point to a critical report on Kelly’s management style based on interviews with staffers – a report that has been disputed by some staff members who , according to ESPN.com, say they were coerced into answers to questions that would harm Kelly. Then there is the question of Kelly’s request to see transcripts from a meeting in Las Vegas that he was asked to leave. The subject of that meeting was the extension of Penny’s contract – a move that Kelly did not back – and to establish the subcommittee that worked on the report on Kelly’s office management. Hanging over all of this was the antagonistic relationship between Kelly on one side and Penny and former players ombudsman Eric Lindros on the other. Even after being replaced by former Canadian Auto Workers union chief Buzz Hargrove, Lindros reportedly made his distaste for Kelly known amongst the player reps and the divisional reps – four of whom were named under Lindros. Even the consultant brought in to tie the Kelly investigation together is alleged to have had ties to Penny and the anti-Kelly group. Now the players’ association has an interim head in Penny who does not want the job full time. It is also without the two men who handled looking out for the players in Healy and Flatley. As the search begins for a new executive director, it is framed against the backdrop of the current CBA (collective bargaining agreement) coming to an end in September of 2011. Neither side will want a repeat of the impasse that shut the league down in 2004. Kelly was a commodity that the league knew and was willing to work with. Now it appears that the union (or at least the executive board because Kelly’s firing was done without their approval) may prefer someone who will fight the NHL tooth and nail – which is the way it was in 2004. Guaranteed to come up in the negotiations will be the NHL’s participation in the Winter Olympics. The players are unified in their want and wish to play for their countries past the 2010 Games in Vancouver. The owners and Bettman would rather see the players in their pro uniforms playing for paying customers and selling merchandise with every goal, save and big hit. The owners are also sweating over the amount of time it seemingly takes the players to get back in “NHL playing shape” when the Olympics are held anywhere other than in North America (the 2014 Games are set for Sochi, Russia). It’ll be interesting to see the talks on this one, especially if the  players’ rep goes in with a “take no prisoners” attitude just like the owners will. We haven’t even addressed the issue of the NHL’s US television contract. In a dispute over programming fees, DirecTV has decided to drop Versus, the league’s primary cable channel, from its lineup. The loss of millions of homes may not mean much to the folks in New York who want to push the NHL Network but to fans who pay for the satellite service (or the more expensive NHL Center Ice), it is another slap in the face. With all the issues and problems facing it, let’s hope that everyone involved with the NHL gets their collective acts together before those sands of time leave the fans stranded in the Sahara. Contact the author at don.money@prohockeynews.com

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