It is time to get back to work for all of those National Hockey League players who did not go to Europe during the lockout and seek employment along with the others who played in the minor leagues or in juniors as preparations are being made for a season.
The lockout started on September 15, 2012. The reason for the lockout seems pretty simple.
The owners wanted to control what they felt was rising costs, specifically players' salaries. Time will tell whether the owners’ collective was successful in the quest.
While the owners’ shutdown their factory or ranch, the business of the National Hockey League went on. During the lockout there were some rather significant industry transactions. Charles Wang will be moving his New York Islanders franchise west from suburban Nassau County to Brooklyn. The saga of the Islanders arena woes which seems to have been a problem since Roy Boe did the NHL a favor and bought an expansion team in 1971 to play at the Nassau Coliseum and prevent the newly formed World Hockey Association from opening a franchise in the (at that time) well-heeled New York City suburb. Boe ultimately could not handle the cost of the Islanders and his American Basketball Association New York Nets and had to sell off both teams in the late 1970s. Boe did the NHL a favor yet as repaid by some of the same owners in the National Basketball Association---mainly Madison Square Garden's Gulf and Western---with a financial dagger in the back. Boe had to pay $3.2 million to join the NBA and $4.8 million to Gulf and Western for "invading" the Knicks' territory in 1976.
Boe's Nets ended up in New Jersey. Boe's Islanders nearly went belly up and was "saved" by John O. Pickett and Cablevision television money. Pickett signed what in retrospect was the NHL's worst lease agreement with Nassau County officials in 1985.
Twenty seven years after Pickett signed a new deal and two failed attempts at replacing the Nassau Coliseum, Wang made the move that seemed logical in 2005 when a Brooklyn arena was in the planning stages. He is taking his franchise west leaving his suburban "fan base" and heading into the city not far from Wall Street. The last of the United States suburban teams will be history in a little more than two years and Islanders fans from suburbia will have to take mass transit to see their team.
During the lockout, Edmonton officials and Edmonton Oilers owner Daryl Katz continued sparring over a proposed arena. The Edmonton building, like the Nassau Coliseum is a vintage 1970s plant that was not built with the future in mind. The future meaning club seats and luxury boxes with wide concourses inside the building for "comfort" for customers who want to but items from concessions or want to dine inside the building at arena restaurants.
Katz and the city are having some funding problems. The talks seem to be at an impasse and allegedly a $100 million (Canadian) gap remains to be solved. But there is a proposal out there that what help close that gap. Alberta politicians are thinking of using lottery monies to help bridge the financial hole in Edmonton and provide money for a new rink in Calgary for the NHL Flames. This proposal came up as the owners shut the gates to their plants. But sports must go on despite the fact no games were played.
The politicians getting involved was not limited to the province of Alberta.
In Detroit, Mayor Dave Bing (the former NBA Detroit Pistons star) has a financially failing city that is teetering on bankruptcy. The governor of the state Rick Snyder has warned Bing and Detroit that if the city cannot fix the problem, Detroit will become the sixth Michigan city that will get a state appointed emergency financial manager joining Benton Harbor, Flint, Pontiac, Ecorse and Allen Park. But as this is going, Detroit Red Wings owner Mike Ilitch is pushing ahead for a new Detroit arena and the Michigan state senate plans to help Ilitch with the cost of his $650 million proposal by
allowing use of tax dollars collected by the city's Downtown Development Authority for the arena. That action happened early December. The same Governor Snyder who is threatening to put an emergency manager in Detroit signed the spending bill for the arena.
Ilitch may own the city over a million dollars in property taxes for the building and may have ignored a provision in the Red Wings-Detroit arena lease (along with city officials) that forces Ilitch and the Red Wings to give a percentage of cable TV earnings to the city.
The business of the NHL continued while the ranch was closed.
Quebec City and Seattle arena backers continued to push to get an arena built. In Markham, Ontario, which is near Toronto, an arena proposal seems to have been put on the back burner for the time being. But Glendale, Arizona elected officials have opened the door for the sale of the NHL-owned Phoenix Coyotes as Glendale will be handing over some $320 million to a potential owner--Greg Jamison--to run the building in addition to owning the Coyotes. The Glendale arena deal came in day 73 of the lockout.
Jamison, according to reports, is still seeking money to complete the purchase from the NHL.
The New Jersey Devils ownership financial woes may or may not have come to an end. Jeffrey Vanderbeek is now the sole owner of the team; the franchise has had money woes for a while and missed payment on an $80 million loan last summer.
The NHL owners locked out the players because franchises like the Florida Panthers probably are losing money. But a forensic look at the overall business of the Florida Panthers reveals something different. The Panthers hockey team is just one part of a business run by Sunrise Sports and Entertainment. The group runs the municipally-funded building and gets the lion share of revenues for all events in the building. The team may lose money but the overall business doesn't and that business is more about real estate than hockey. Sunrise Sports and Entertainment's next goal to getting a casino license.
NHL teams are just a fraction of a business that includes regional cable TV holdings and real estate. The Dolan family owns Madison Square Garden, the New York Rangers (and Knicks), the Madison Square Garden Network and doesn't pay New York City property taxes. The profitable cable TV network (thanks to the 1984 cable TV legislation signed into law by President Ronald Reagan) not only has the rights to Rangers cable TV games but also the Islanders, Devils and the Buffalo Sabres. It can be argued that the Islanders and Devils payments which are hefty are loss leaders. But by carrying those games and putting them into homes in Long Island (Islanders) and New Jersey (Devils), Cablevision can make an argument to local community cable TV boards that they are bringing local programming (the Islanders and Devils and News 12) that no one cable multiple systems operator can offer when cable TV franchise licensing renewals come up.
The Philadelphia Flyers owner is Comcast, the United States biggest cable TV multiple systems operator. Comcast owns NBC and the NBC Sports Network which has a 10 year national cable TV deal with the league. That makes Comcast not only the Flyers owner but a partner with the other 29 franchises. On the regional level, Comcast is part owner of Chicago's regional sports cable TV network which means the Flyers and Chicago Blackhawks are business partners in a venture (along with the Chicago Cubs, Bulls and White Sox). Comcast (the Flyers) also has partnerships with the Vancouver Canucks (in the US Pacific Northwest), the Washington Capitals and the San Jose Sharks.
Additionally, Comcast has a partnership with FOX's Rupert Murdoch in Florida with Sun Sports. The Tampa Bay Lightning ownership has a deal with Sun Sports to carry the franchise's cable TV games.
Murdoch has a 10-percent ownership stake in the New York Rangers, Madison Square Garden and the Los Angeles arena that houses the Kings, Lakers and Clippers. Murdoch is also partners on the cable TV side with the Phoenix Coyotes, the Detroit Red Wings, the Florida Panthers, the St. Louis Blues, the Minnesota Wild, the Columbus Blue Jackets, the Carolina Hurricanes, the Nashville Predators, the Dallas Stars, the Los Angeles Kings and the Anaheim Ducks
The lockout just shut down a portion of the National Hockey League business. The product but the business of the NHL didn't stop during the lockout.
Evan Weiner can be reached at evanjweiner@gmail.com His e-book, "The Business and Politics of Sports, Second Edition" is available at www.bickley.com and Amazon.com and another e-book, America's Passion: How a Coal Miner's Game Became the NFL in the 20th Century is available at www.smashwords.com
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