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12-09-2008, 12:38 AM
  #1
Outside99*
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NY Times Article - "Owners Depressed"

December 8, 2008, 3:20 pm
The Morning Skate: Avery Debated, Sabres Deny and Owners Depressed
By Stu Hackel


Broke at the Breakers?: Now to stuff that really matters, starting with the state of the N.H.L. and the current economic crisis. The Board of Governors meets starting today at the posh Breakers in West Palm Beach (Denis Casavant on Montreal’s Team 990 “The Morning Show” likened that to the heads of the auto companies flying their private jets to D.C. to plead with Congress for financial aid) to consider slitting their wrists soberly contemplate the potential damage caused by the sharp downturn.

Expect stories on troubled franchises potentially for sale to multiply coming out of this meeting. Well, whaddyaknow, here’s one now we just stumbled on … not one of the usual suspects, like Phoenix or Nashville or Florida, but Buffalo.

According to Business First of Buffalo, Western New York Hockey magazine (which is edited by longtime Buffalo hockey writer and Toronto radio commentator Jim Kelley) will report later this week that owner Tom Golisano is interested in selling the club and that at least two parties are linked to the potential purchase. One of them is Jim Balsillie, whose name will forever surface when sale rumors float by. Balsillie’s ownership would supposedly mean a split in the Sabres’ home schedule between Buffalo and Hamilton, which seems to us would be a logistical nightmare, economically inefficient and a PR disaster, not to mention how much they’d love it in Buffalo. Other than that, it’s a great idea.

The Sabres deny that the team is for sale, as does Balisillie’s lawyer, Richard Rodier .

This comes on the heels of reports last week that George Gillett was considering selling the Canadiens and that the Coyotes would lose around $35 million this season and owner Jerry Moyes is looking for a way out.

In today’s Toronto Star, Damien Cox writes “Tumbling oil prices in Alberta won’t help the Flames and Oilers.”

The Globe and Mail’s Sean Gordon adds, “Several hockey sources insist other cash-strapped clubs, such as the Nashville Predators and Tampa Bay Lightning, have come close to missing their payroll obligations (although both the Predators and Lightning insist they are on solid financial footing.)”

So are the owners really bordering on hysteria, are concerns for these teams’ futures justified? Or is this a case of the news media whipping up a nice frenzy of groundless speculation? Is there fire beneath the smoke?

Cox write, “Bettman is going to want to produce some note of optimism from these meetings, some piece of promising news, rather than simply a depressing economic forecast. These men trusted him through the lockout, and they’ll undoubtedly trust him now.”

If the forecast coming from the Breakers is all about silver linings, it’s doubtful that the media (and fans) will trust the weatherman.

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12-09-2008, 01:32 AM
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Scary times are here...

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12-09-2008, 09:15 AM
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Welcome to what the rest of the world is feeling. It is a bit scary if some clubs are coming close to missing payroll.

I haven't cut back on how much I've spent on hockey tickets and hockey related merchandise, but I know people who have.

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12-09-2008, 11:02 AM
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Next year's free agent market is going to have some great opportunities.

If the cap stays the same or goes down a bit, that's going to squeeze a lot of teams, and add financial pressures in several key franchises, and it's going to be a buyers market.

Top Six UFA Forwards:

Zetterberg
Hossa
Gaborik
Tanguay
Havlat
Cole
Sedin
Sedin
McDonald
Knuble
Antropov

If the cap stays the same, the Canucks will have $30 million to spend, with almost $25 million of it available for forwards.

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12-09-2008, 11:14 AM
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I look forward to a number of US based teams going bankrupt. There are too many teams in too many non hockey markets - thank you Gary Bettman. This league would be far better and far stronger if there were 24 teams. And it could happen.

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12-09-2008, 02:10 PM
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Boo hoo. I thought your 'linkage' system was supposed to be fine no matter what Owners. And when you're crying poor you've refused to let one of the wealthiest men purchase one of your teams in the league.

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12-09-2008, 02:35 PM
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I worry we'll sign Luongo long term for 8-9mil per next July, and then have the cap drop to 44m for the 10-11 season...

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12-09-2008, 02:36 PM
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*Injektilo
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Quote:
Originally Posted by galiano View Post
I look forward to a number of US based teams going bankrupt. There are too many teams in too many non hockey markets - thank you Gary Bettman. This league would be far better and far stronger if there were 24 teams. And it could happen.
If teams start going bankrupt, it won't necessarily be the ones you hope for. Plus, it could have a cascading effect in financially crippling other teams, including the ones you prefer to remain in the league.

In short, be careful what you wish for.

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12-09-2008, 02:48 PM
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Quote:
Originally Posted by *Injektilo View Post
If teams start going bankrupt, it won't necessarily be the ones you hope for. Plus, it could have a cascading effect in financially crippling other teams, including the ones you prefer to remain in the league.

In short, be careful what you wish for.
Good point. Does anyone know what the situation with contracts is in the case of a team defaulting? I'm seeing a few possibilities here:
  • Players are out of luck
  • NHLPA covers it
  • NHL has insurance
  • Other NHL owners are on the hook

If other NHL owners are on the hook for the salaries of defaulting teams' players, it could be pretty bad. If two teams fold, that's about $3 million extra or so per team.

You also need to take into account other factors aside from players' salaries. For instance, if the Edmonton Oilers were to go bankrupt, that would be 4 lost home games for the Canucks which would be worth several million dollars to the Canucks in lost revenue. The NHL would also find it more difficult to get top dollar for TV deals. I wouldn't be opposed to having a team or two fold or move to a better location, but bankruptcy is not the best situation.

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12-09-2008, 03:04 PM
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Darryl Katz owns the Oilers and his net worth is measured in 9 figures. If his Oilers go bankrupt, I think it means the rest of the world must be in pretty bad shape.

I think we have to acknowledge that most owners make their money elsewhere outside of owning sports teams. If we wanted to seriously consider a team's health, we should look at how the actual owners are doing. I'd worry more about the Aquilinis' real estate investments before Darryl Katz's hundreds of millions.

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12-09-2008, 04:19 PM
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ping
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Quote:
Originally Posted by Stefan It Up View Post
Darryl Katz owns the Oilers and his net worth is measured in 9 figures. If his Oilers go bankrupt, I think it means the rest of the world must be in pretty bad shape.

I think we have to acknowledge that most owners make their money elsewhere outside of owning sports teams. If we wanted to seriously consider a team's health, we should look at how the actual owners are doing. I'd worry more about the Aquilinis' real estate investments before Darryl Katz's hundreds of millions.
While it is true that most owners make their money elsewhere outside of owning sports teams, this doesn't mean that they'll continue to hold an NHL team regardless of their financial difficulties. Sometimes they are unable too. While Owner X is worth $2 billion, it's highly possible that $1.8 billion of this is invested in a variety of funds and companies. The $200 million that's left over needs to prop up everything else.

With the way the economy is right now, it's likely that an owner's "other holdings" are suffering as well. In order to come up with capital to pay off his creditors, an owner will need to make sacrifices somewhere whether it's his pharmaceutical company, his real estate development company, or his NHL team. If he's bleeding money from all sources, he may need to sell his NHL team or simply fold the team to halt those losses.

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