Who Can Forget The Winnipeg Jets and The Jets Operating Agreement? Courtesy Getty Images

Today’s news had this tidbit regarding the Chase for the Coyotes: “Reinsdorf has asked for a special taxing district to be created near the arena that would pay the new owners as much as $23 million next year, according to documents obtained by The Arizona Republic. And if the team were still losing money after five years, Glendale would have to pay Reinsdorf $15 million for each year of losses or allow the team to be sold and moved without penalty, according to the newspaper.”

Does this sound so familiar! Getting local governments to cover potential losses or allowing the team to leave if they don’t! Yikes! Been there, done that!

One would be Offside not to believe that Kharma has struck yet again!

So if the $23 million per year doesn't keep the team out of the red for the first 5 years, then the local government would have to pay the Coyotes $15 million per season for them to stay in years 6 and beyond. So that is $115 million in the first five years by "volunteer" taxation on local businesses around the rink? Then in year 6, the city would also cough up $15 million in addition to this $23 million per year?? All for a team that draws few fans to games and no more than flies to its local TV contract. And if the payers balk, then the team can (and will) leave.

The taxpayers, led by the Goldwater Institute, will be furious at this revelation for concessions for something they clearly neither want nor support. The Goldwater Institute is like cross between PETA and Greenpeace rolled into one nasty, save-the-taxpayer-at-all-cost, association.

This is also starting to sound like the deal the Predators got to stay in Nashville. The deal hinges on essentially one clause that says "in the first Y years, when losses reach a cumulative amount of X, we are leaving!" If this is the way the NHL is to reinforce the failing teams, it is only buying time before the next failure will occur. It’s like building on foundations of sand. Quick sand in some NHL cities. It didn’t work in Winnipeg where hockey is king and strongly backed by a majority of the public, taxpayer assistance notwithstanding. Nashville, Phoenix and others be warned, the bandage solution is none at all!

The judge will read through all these deals and realize that all bids have out clauses in one form or another. Thus there is no such thing as bids to relocate and bids to remain. Hence September 10th was chosen to resume the process, which is the same day as the relocation auction date. It looks like there will be only one auction now.

Now if the NHL makes it clear that they will tie up a successful Balsillie bid with court challenges for years to come, then that $212.5 million bid might never occur or have creditors waiting years to get paid. To say nothing about the NHL slicing off a good portion of the $212.5 million for relocation and territorial indemnification fees, which the judge has already agreed to in principle.

Last minute, the NHL could back another bid or more than one bid, be it one of the current ones or one yet to come (for Winnipeg perhaps?), and show the court no similar threat and sign off that they won't hold it up in any way nor shave off as much for relocation fees.

In the end, after all the court documents, Judge Baum will have to decide the ultimate sage puzzle: "On behalf of the creditors, Shall I take one bird in hand, or two in the bush?"

This process and the combatants are turning uglier and nastier by the week. And the uglier it becomes, the better Winnipeg’s "port" looks to this sinking ship that is caught in a storm! Rumours suggest other NHL sinking ships are watching Winnipeg very carefully too!

Also, one other thing, all this speculation over which cities and owners would be pre-approved by the NHL has already been done to a large degree. Remember 2 years ago when True North went to the NHL and had that secret meeting that the WFP broke the story on, 6 months after it happened? Click here for more details:

http://www.manitobamythbusters.com/php/index.php?module=pagemaster&PAGE_user_op=view_page&PAGE_id=125

Many cities did the same thing at the time. The NHL knew that bad things were happening in various cities and have ensured they know what relocation options they have as a Plan B. The final details of the ownerships would still need NHL rubber-stamping once solidified in a deal. But real leg work about the city in question, the rink and the fanbase would be analyzed by now by the NHL. This then makes Gary Bettman’s recent email choosing Winnipeg over Hamilton should the Coyotes move, all that more important and shows that the email was backed by past NHL study.

Keeping the courts and government bailouts out of the equation is the best way to ensure the NHL’s long term survival in any market. Political support for financial backing of any kind changes as often as the direction of the wind, so never count on it especially if you are a pro sports team. Whether the NHL owners fully grasp this concept yet is the real unknown. Let’s hope the court may offer the NHL some sage advice and end this Gong Show in Glendale.

If your want to offer a different opinion on what that sage advice might be, then log onto the Froum and have your say! www.mbmbforum.com

Chris
Chair, Manitoba Mythbusters
www.ManitobaMythbusters.com
www.myNHLincludesWinnipeg.com