By now you have heard that a few NHL BOGs have made overtures about Toronto supporting 2 teams. Maybe the second team could share the ACC and rent it from the Leafs via their owners, Maple Leaf Sport and Entertainment. Maybe this or maybe that.

The Leafs, as were other BOGs, were blindsided by media questions surrounding their position on the issue. To their credit, they didn’t immediately slam the door shut on it, preferring to more or less say that they’ll do what’s best for the league.

This Leaf openness to a dialogue has been somewhat surprising. Taken at face value, this gives the people in Hamilton, Kitchener-Waterloo or any other South Ontario city some optimism that maybe the Leafs would make nice to another team either in or at least right next to their territorial rights. I figure the Leafs know that either way a hefty payoff from either the NHL or the second team will be forthcoming should it ever come to pass. Business people always can make lemonade from lemons. And the Ontario Teachers’ Pension Fund, the true owners of the Leafs, know how to get the most out of their business interests.

But why the openness at the BOG level to finally quote this story to the media? It actually has nothing to do with Southern Ontario. Ironic isn’t it?

The US economy is looking more like a jet tailspining every day. Phoenix, Miami, Nashville and Atlanta are only drawing flies when the good times were a-rolling. Now entertainment dollars will be much, much fewer, leaving those 4 NHL teams as afterthoughts, as even the NBA, MLB and NFL will feel the economy affects. Homes in Phoenix are selling to Canadians as winter cottages because the bottom has fallen out of that city’s housing market. Yes it really has gotten this bad.

So while telling the world that the NHL is doing-just-fine-thank-you, problems have finally caught up to the NHL expansions of the early 1990’s. Now I don’t blame Gary Bettman for putting a good spin on things; that is part of his job and the NHL’s job here. I do blame past reckless expansion on the BOGs. Those one time cash receipts are being eaten with every passing year’s revenue sharing payment.

Just think of the millions in revenue sharing that mid to large teams are paying into just to keep these 4 teams afloat for another year. It adds up fast. And will continue to add up for at least another 3 years that the CBA is around. That is why there is so much more talk about relocation, because for the first time with the new CBA, their financial losses mean something to the rest of the league owners.

Are teams going to go bankrupt? The short answer is never. Bankruptcy will never happen because if it did then franchise values drop across the board leaving all owners as victims. A lot of bank borrowing by the owners, uses the team value. A lesser team value just might make a credit problem happen for these owners in relatively good situations now. And the credit crunch is only getting worse.

But behind the scenes, war-room-like scenarios are being played out either officially without the public’s knowledge or unofficially as these comments about Toronto’s second team indicate.

Where do you put 4 teams without losing any to bankruptcy? Here’s how I see the NHL’s options:

Well there was a thought just a few weeks ago that maybe Europe is ready for the NHL. That was one trial balloon floated through the media. Solutions are needed very soon, Europe is at least 5 to 10 years out. Enough said. Count it this as War Room Salvo One.

Another idea is other US cities: Kansas City, Las Vegas, Houston and Seattle. Kansas: maybe, since their rink is ready to go, has no main tenant, and it would buy another 5 years for a team to survive. Ditto for Seattle. Maybe their local markets become solid, maybe the US economy comes back around again by then. A lot of maybes, but these maybes are better than the current situation for these 4 clubs. Relocating to Kansas and Seattle is kind of like the old saying “Any port in a storm”. Seattle looks a little brighter since the Supersonics left town. This allows an NHL team to avoid splitting rink revenues. Houston has the highest chance of success in this bunch. On the other hand, Vegas will have a devil of a time just trying to get bank loans for building a new rink. Mega-projects, that the new rink would be, generally get put off when the economy goes bad. But this is Vegas after all, so who knows if this idea will happen or not. If not, then Las Vegas is off the NHL’s potential relocation list. So summarizing, there are 4 teams to move, only 3 potential cities with rinks, and only 1 maybe 2 that has a snowball’s chance in the Deep South of making it long term. Count this as War Room Salvo Two.

And when all else fails, “blame Canada”. Toronto, Winnipeg, Hamilton (or Kitchener-Waterloo), Halifax and Quebec City. A second team in Toronto may cannibalize some of the Leaf Nation and their money. But this is mecca for hockey and heaven on earth for 4 teams that won’t survive much longer. Unless the Leafs get so much in compensation that the second team has nothing left to work with, this makes way too much sense for the NHL to do. Even if a second rink needs to be built, there is enough profit for a second Toronto team to do so. Winnipeg has only the AHL Manitoba Moose as its’ main tenant. The MTC Centre rink is ready, the fans have shown they are there to buy the tickets, the ownership group (who owns the rink) is in place. The last question surrounds national and local corporate support for advertising and luxury box sales. When the NHL has a team to move, expect to see the local ownership group to gather 3 to 5 year subscriptions for luxury boxes, major advertizing sponsors and even for 12,000 season tickets (12,000 season tickets is the one year benchmark sales for the last 2 rounds of expansions). Believe it or not, after Toronto has 2 teams, I believe that Southern Ontario could still support another team. There is so much money pent up for NHL hockey, even with the economy faltering, that this would be another great success for the NHL. Balsillie could build his rink in K-W, and work out of Hamilton in the mean time. Hamilton would need major renovations to Copps Coliseum before it could be considered a permanent NHL home. This is because although it holds a lot of seats, but it has very, very few luxury boxes. Halifax has no rink or plans for one. No ownership group has come forward publically. Questions surrounding market viability are left unanswered. A real long shot. Quebec City would be highly favoured due to its’ loss of the Nordiques but the government and the private sector has shown little interest in either renovating the Nords former rink, La Colisee, or building a new one. No leader of a potential Quebec ownership group has emerged yet. Another long shot at best. Call this War Room Salvo Three.

So to wrap up, the 4 weak teams would be most successful if they were relocated fairly quickly (to save further losses) to cities with rinks:

• Toronto or Hamilton (but not both)
• Winnipeg
• Houston
• Kansas City
• Seattle (6th, since the city shows no major interest in getting an NHL team lately)

Some cities are longer shots due to their rink situation:

• Kitchener-Waterloo
• Las Vegas
• Quebec City
• Halifax

Will this unfold as outlined above? Probably not. Why? Expansion to Toronto or Southern Ontario may price a team around $300+ million. So why relocate a team there if this cash cow is waiting to be had? The same argument could be used with the rumoured $250 million that Jerry Bruckheimer is offering the NHL for an expansion team in Las Vegas. However, many feel expanding to Las Vegas may become the same mistake just like Blockbuster Video who wanted a team in Miami. 15 years later, Miami should be playing musical chairs to see where it should relocate to. Not relocating teams to Toronto or the rest of Southern Ontario is risky in a time where the NHL needs to find some success off the ice. But money talks loudest.

That leaves Winnipeg, Houston, Kansas City and Seattle as joining the NHL via relocation. This means two existing teams stay in the Western Conference (Phoenix and Nashville). Two more move from the Eastern Conference to the West (Miami and Atlanta). This means Detroit and Columbus moves to the East to rebalance the conferences.

This should be the NHL master plan. But. There is always a but when it comes to the NHL. Growing that US TV footprint has been the master plan for at least 15 years. Many would say since the 1967 expansion. Why is this so important to the NHL BOG? To move away from a gate-driven league to one where TV pays most of the freight. So to move just one US team to Canada, even a failing one, is tantamount to admitting the plans haven’t worked out or have “maxed” out. Not to mention the due diligence of past expansions would be exposed.

If the NHL BOGs would rather continue losing millions in cities that have shown they don’t care or don’t want the team in 10+ years of existence rather than swallowing their pride and doing the right business decision, then they truly are the ones offside. However, global economics might force their hand to avoid bankruptcies.

Maybe instead of an NHL European division, we might wake up one day to find a 5 team Toronto division. Until then, all bets are off where these teams end up, leaving millions of fans hopeful, yet wondering “Why haven’t they moved those teams yet?”

Chris