Kovalchuk Preparing To Carry Thrashers For Another Season

Some say that the Atlanta Thrashers cannot easily be relocated.

That is a total denial of the situation, with media types OFFside for repeating roadblocks, which are avoidable.

The Kovalchuk-led Thrashers are as ripe for picking as Georgia peaches in late August.

The unravelling has already occurred. The reason the eight Atlanta Spirit owners got into a fight over control was that the NBA Hawks wanted to make a trade. One owner did not want it, the rest were fine with it. Therefore, that one owner then decided to buy out the other seven. Then those seven said essentially “No! - we'll buy you out instead.”

Then the real fight over what the value of his share would be worth - the value of the rink, leases, and the two professional teams. The main question it seems is at what time the valuation would be based upon. Would it be the first sign of owner conflict or now or sometime in between? That led to a multiyear court case, which essentially resolved nothing but to say keep this out of the courts. Even the judge offered advice to settle this in mediation of some sort to save time and money for all parties. The eight now have to figure out an equitable way to value the Spirit shares then buy that one owner out.

However, the group of 8 known as Atlanta Spirit bought the Thrashers expansion team from the NHL for $80 million in 2000 and have sustained losses most if not all seasons. Remember that first bombshell a few years back? The NHL leaked document that showed total gate revenues per game for each team. It showed Atlanta with the highest freebie count that year and it had one of the lowest total gate revenues across the entire NHL.

Now knowing all that, do you not think the eight owners would agree to sell a continual money-loser in the Thrashers for $140 to $200 million? The conflict between owners may be a separate issue, if all parties want to sever ties to the NHL.

On the other side of the puck, perhaps the conflict between the owners may in fact be a driving force to push out the Thrashers. It is possible that by selling the hockey team that this new cash can then go to buy out the one owner. Therefore, the remaining owners may not have to dip into their pockets as deep to buy out that single owner and keep the NBA Hawks (which is the only team they clearly love anyways). Why keep losing money on something at a time when finding credit to buy out an owner is tough?

Now the $10 million per year naming rights at Phillips arena is offered as a reason to hold the Thrashers in place. The reality is there is little in the way of a penalty clause should the team leave Atlanta or its' rink, since the same owners own both. If the Thrashers move out, the naming rights may be reduced by a certain percentage via a re-negotiation with Phillips. If the rights deal falls apart, you can be sure that another business will jump in at the chance and therefore cover a good part of that original amount. Besides, Thrasher annual losses probably trump the naming rights cash most years anyways.

Moving out the Thrashers may be best for Atlanta Spirit. By opening up 41 nights for other events like concerts, concessions will still be sold without the ongoing NHL team losses incurred. This means the rink could be as profitable as before, or even more so with better attendances, and the Atlanta Spirit rids itself of a money loser, while putting NHL sale proceeds of $140 to $200 million in its' pocketbook.

The only tangible roadblock is that of the NHL Head Office. Clearly, the Coyotes ruling reaffirms the NHL to control team locations and ownerships alone from outside influence.

It will be a predictable process for Atlanta and several other NHL cities. The NHL will save face by allowing some time to find new ownership to keep the team in Atlanta. Having found none, will the NHL then allow an ownership in good standing with the league, going through the proper internal process, to recoup the cash invested as losses year after year via a sale and relocation? I believe that the other NHL owners may be willing to do so, especially as it most likely removes a team from receiving annual revenue sharing handouts as long as they exist in Georgia. The players would have their escrows reduced as well, according to recent Glenn Healy comments.

Simply put, the cost to the NHL to prop up several failed teams all at the same time, in a bad US economy, is too much to shoulder for the other clubs. Mass contraction in a very tight credit market is financial suicide for the remaining clubs. As such, several relocations may occur in quick succession reminiscent of the mid 1990’s with three teams ported in three straight seasons.

Therefore, in the end, relocating the Thrashers may be best for all in Atlanta Spirit and for all in the NHL and NHLPA. Upon further review, the ties that bind number very few. Of course, the real losers, as always, are the local fans who embraced the team, as Manitoban NHL fans know only too well.

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Chris
President
www.myNHLincludesWinnipeg.com
www.ManitobaMythbusters.com

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