So, I read the Standard Player Contract yesterday. If I understand it correctly, the clearing-waivers thing has nothing to do with the buyout deadline. The deadline for buyout notification is June 30 at 5:00 New York time, and the player must be put on waivers "before or promptly after" notification. So we have until tomorrow at 5:00 PM before we've passed the buyout deadline.
All of which is moot, because reports came out this morning that we'll be buying out Chris Drury's contract.
Wednesday, June 29, 2011
Tuesday, June 28, 2011
No buyout?
Well, Chris Drury was not placed on waivers today, which I'm fairly certain means he won't have time to clear waivers before the buyout deadline. Which means he's not being bought out. So, for now, he's worth a $7.05 million cap hit. That brings us down to $18,336,858 to spend on Richards, RFA raises, and any other free agents. If we can get things done well this summer, I feel like that's much better for us moving forwards. If Drury's knee is really too bad, we can drop him onto LTIR and have plenty of room to work. If he can still play, that brings up all sorts of other possibilities. Hell, he might even retire, if he feels he's unfit to play. Whatever happens, this is better for us in the long run. The question now is what happens this summer.
Summer cap room remaining (according to my approximate calculations): $18,336,858
Summer cap room remaining (according to my approximate calculations): $18,336,858
Monday, June 27, 2011
July 1 is coming...
When we last left the cap situation, we were looking at $47,716,164 locked up under the summer cap. First, some changes to that figure. The other day, we traded Evgeny Grachev, that prospect who played 8 games last season and was not as impressive as we wanted him to be, to the Blues for a third-round pick. I had his 8 games as costing us around $56,272 against the summer cap. Additionally (subtractionally?), as you know, Derek Boogaard is no longer with us. I'm not getting into that here, save for the $1.625 million cap figure.
Finally, there's the Drury buyout. Rumor was briefly that the Rangers were not going to be able to buy out Drury, due to a degenerating knee, and would instead be placing him on Long-Term Injured Reserve for the season (this means he would not count at all against next season's cap, but his entire salary would still be on the books for the summer cap). It now looks likely, again, that the buyout will take place. We'll know within the next 3 days, after which the window for buying out contracts closes.
Here's the bottom line of the Drury buyout: if we buy out Drury's contract, it will cost us $3,716,667 against this summer's cap and against this season's cap, as well as $1,666,667 against next season's cap. If we do not buy him out, and we place him on Long-Term Injured Reserve for the season, it will cost us $7,050,000 against this summer's cap, and then nothing against this season's or next season's cap. By pushing forward with the buyout, the Rangers are boldly making the statement that they need that $3,333,333 in space right now and are willing to pay for it in future cap space.
More on that later. If we assume the buyout goes through, our new summer cap figure becomes $42,701,559. The 2011-12 salary cap has been set at $64.3 million (slightly above the projections), which puts the 2011 summer cap at $70,730,000. That leaves us $28,028,441 to work with. Of note: unless we somehow trade Wade Redden, we can continue to talk about the summer cap and never worry about next season's cap. Why? We know that when the season starts, Redden will be sent back down to the Whale (or the Rochester Americans? When does that happen?). That will take $6.5 million out of our cap hit. If we're under $70.73 million with Redden, then we're guaranteed to be under $64.23 million without him, so if we fit in the summer cap, we'll fit in the season cap.
Anyway. $28,028,441 to work with. So why the panic to save the Drury money now? You know the answer to this question: all our free agents, plus Brad Richards. The outlook for us bringing in Brad Richards is good right now: the Rangers are believed to be the front-runner, and it's been reported that he "wants to play in New York" (but hey, who doesn't?). Unfortunately, it's been reported that Richards is looking for a contract in the neighborhood of 8 years (he's already 31) in the neighborhood of $50-$55 million (cap hit of around $6.5 million). I'd like to see the length of that come down by a few years, and that probably won't happen unless the price goes up a bit (although, as Larry Brooks points out, shouldn't Richards accept a smaller deal to come to the Rangers, if he "wants to play in New York"?).
On top of Richards, there are all our free agents. Our restricted free agents are Callahan, Dubinsky, Animisov, Boyle, Gilroy, and Sauer. You'll recall how restricted free agency works: an RFA's team must extend a qualifying offer of a particular amount of money, determined by a formula based on that player's previous season's salary. If the team does not do so by July 1, the player becomes an unrestricted free agent. If they do, the player must accept this offer or file for salary arbitration, in which a third party determines how much the player is actually worth. (If the team does not accept the new value, the player becomes a UFA; if the team agrees to it, the player must also accept it). A team will often avoid salary arbitration with a very good RFA by, once free agency opens, offering him a better contract than the qualifying offer they already sent him.
The Rangers have sent qualifying offers to Callahan ($2.4m), Dubinsky ($2m), Anisimov ($803,250), Boyle ($605,000), and Sauer ($550,000). They rightly did not extend such an offer to Matt Gilroy, whose qualifying value would have been $2.1 million, a bit too high for his value. The Rangers did reportedly offer Gilroy a more modest deal, but he will be testing the free agent waters come July 1 and seeing what else he is offered. If some other team wants to offer him $2 million, Godspeed; otherwise, I wouldn't be surprised to see him back in a Blueshirt for whatever smaller offer the Rangers sent.
So, those qualifying offers tie up an additional $6,358,250, leaving $21,670,191 to work with under the summer cap. However, it's worth noting that every one of those qualifiers is a low-ball figure for what that player is actually worth to the team. Callahan, Dubinsky, and Boyle all qualify for arbitration (and almost certainly would file if they did not get better offers from the Rangers). Anisimov and Sauer do not (they have too little NHL experience to be permitted to file for arbitration), but it is highly unlikely that the Rangers will not offer them more than their qualifiers, given their contributions to the team.
So, that figure of $21.7 million needs to account for Richards and for probably raises to all 5 of those RFAs. Then it also needs to be used to hire whatever additional UFAs we want (back). We already mentioned Gilroy, but we also have Frolov, Prospal, Fedotenko, McCabe, and Eminger going into free agency. Clearly, we're not bringing all of those guys back (Frolov and McCabe seem sure to go), but we're also not bringing back none of them. The Rangers have made it clear that they'd like to get Fedotenko back at least, but I also think it would be foolish not to throw another million or two Prospal's way for another year (and, if the price is right, I'd be happy to see Eminger return, especially if Gilroy doesn't).
Which means we have (approximately) $21,670,191 to spend on:
--Brad Richards
--(Probably substantial) raises to those 5 restricted free agents
--Any UFAs we want back, like Fedotenko
--Any other UFAs we want to sign
So, anyway, that's why the Rangers might want to buy out Drury and save the money right now. As for timeline, July 1 is Friday. So all buyouts have to happen by Thursday. To be bought out, a player must first clear waivers, which itself takes 24 hours. So if we're buying out Drury's contract, we need to place him on waivers by the end of the day tomorrow. So we'll know more about that by then. After that, I'd expect the Richards thing to be resolved, if not on Friday, very soon after. And then, based on what's left, negotiations with our remaining RFAs. I'd like to believe we'll lock up Feds and Prospal on Friday also, but that clearly won't happen until Richards goes one way or another.
Exciting week!
Finally, there's the Drury buyout. Rumor was briefly that the Rangers were not going to be able to buy out Drury, due to a degenerating knee, and would instead be placing him on Long-Term Injured Reserve for the season (this means he would not count at all against next season's cap, but his entire salary would still be on the books for the summer cap). It now looks likely, again, that the buyout will take place. We'll know within the next 3 days, after which the window for buying out contracts closes.
Here's the bottom line of the Drury buyout: if we buy out Drury's contract, it will cost us $3,716,667 against this summer's cap and against this season's cap, as well as $1,666,667 against next season's cap. If we do not buy him out, and we place him on Long-Term Injured Reserve for the season, it will cost us $7,050,000 against this summer's cap, and then nothing against this season's or next season's cap. By pushing forward with the buyout, the Rangers are boldly making the statement that they need that $3,333,333 in space right now and are willing to pay for it in future cap space.
More on that later. If we assume the buyout goes through, our new summer cap figure becomes $42,701,559. The 2011-12 salary cap has been set at $64.3 million (slightly above the projections), which puts the 2011 summer cap at $70,730,000. That leaves us $28,028,441 to work with. Of note: unless we somehow trade Wade Redden, we can continue to talk about the summer cap and never worry about next season's cap. Why? We know that when the season starts, Redden will be sent back down to the Whale (or the Rochester Americans? When does that happen?). That will take $6.5 million out of our cap hit. If we're under $70.73 million with Redden, then we're guaranteed to be under $64.23 million without him, so if we fit in the summer cap, we'll fit in the season cap.
Anyway. $28,028,441 to work with. So why the panic to save the Drury money now? You know the answer to this question: all our free agents, plus Brad Richards. The outlook for us bringing in Brad Richards is good right now: the Rangers are believed to be the front-runner, and it's been reported that he "wants to play in New York" (but hey, who doesn't?). Unfortunately, it's been reported that Richards is looking for a contract in the neighborhood of 8 years (he's already 31) in the neighborhood of $50-$55 million (cap hit of around $6.5 million). I'd like to see the length of that come down by a few years, and that probably won't happen unless the price goes up a bit (although, as Larry Brooks points out, shouldn't Richards accept a smaller deal to come to the Rangers, if he "wants to play in New York"?).
On top of Richards, there are all our free agents. Our restricted free agents are Callahan, Dubinsky, Animisov, Boyle, Gilroy, and Sauer. You'll recall how restricted free agency works: an RFA's team must extend a qualifying offer of a particular amount of money, determined by a formula based on that player's previous season's salary. If the team does not do so by July 1, the player becomes an unrestricted free agent. If they do, the player must accept this offer or file for salary arbitration, in which a third party determines how much the player is actually worth. (If the team does not accept the new value, the player becomes a UFA; if the team agrees to it, the player must also accept it). A team will often avoid salary arbitration with a very good RFA by, once free agency opens, offering him a better contract than the qualifying offer they already sent him.
The Rangers have sent qualifying offers to Callahan ($2.4m), Dubinsky ($2m), Anisimov ($803,250), Boyle ($605,000), and Sauer ($550,000). They rightly did not extend such an offer to Matt Gilroy, whose qualifying value would have been $2.1 million, a bit too high for his value. The Rangers did reportedly offer Gilroy a more modest deal, but he will be testing the free agent waters come July 1 and seeing what else he is offered. If some other team wants to offer him $2 million, Godspeed; otherwise, I wouldn't be surprised to see him back in a Blueshirt for whatever smaller offer the Rangers sent.
So, those qualifying offers tie up an additional $6,358,250, leaving $21,670,191 to work with under the summer cap. However, it's worth noting that every one of those qualifiers is a low-ball figure for what that player is actually worth to the team. Callahan, Dubinsky, and Boyle all qualify for arbitration (and almost certainly would file if they did not get better offers from the Rangers). Anisimov and Sauer do not (they have too little NHL experience to be permitted to file for arbitration), but it is highly unlikely that the Rangers will not offer them more than their qualifiers, given their contributions to the team.
So, that figure of $21.7 million needs to account for Richards and for probably raises to all 5 of those RFAs. Then it also needs to be used to hire whatever additional UFAs we want (back). We already mentioned Gilroy, but we also have Frolov, Prospal, Fedotenko, McCabe, and Eminger going into free agency. Clearly, we're not bringing all of those guys back (Frolov and McCabe seem sure to go), but we're also not bringing back none of them. The Rangers have made it clear that they'd like to get Fedotenko back at least, but I also think it would be foolish not to throw another million or two Prospal's way for another year (and, if the price is right, I'd be happy to see Eminger return, especially if Gilroy doesn't).
Which means we have (approximately) $21,670,191 to spend on:
--Brad Richards
--(Probably substantial) raises to those 5 restricted free agents
--Any UFAs we want back, like Fedotenko
--Any other UFAs we want to sign
So, anyway, that's why the Rangers might want to buy out Drury and save the money right now. As for timeline, July 1 is Friday. So all buyouts have to happen by Thursday. To be bought out, a player must first clear waivers, which itself takes 24 hours. So if we're buying out Drury's contract, we need to place him on waivers by the end of the day tomorrow. So we'll know more about that by then. After that, I'd expect the Richards thing to be resolved, if not on Friday, very soon after. And then, based on what's left, negotiations with our remaining RFAs. I'd like to believe we'll lock up Feds and Prospal on Friday also, but that clearly won't happen until Richards goes one way or another.
Exciting week!
Friday, June 17, 2011
"Why does everyone hate Gary Bettman?"
So, someone on the Internet recently asked a forum of hockey fans that question. The post basically said "I'm a brand new hockey fan, I love hockey, everyone always boos your commissioner when he brings out the damn Stanley Cup, what gives?" Next thing I knew, I went into some sort of fugue, and when it was over, I had written an answer. Having written a wordy thing about hockey on the Internet, I figured I should come here and post it. So, here's what I said:
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As I see it, there are more or less four key reasons people dislike the Commissioner:
1. Lockouts. The NHL was formed in 1917, and operated every single season until Gary Bettman took over as commissioner in 1993. Then there was a half-season lockout in 1994 and a full-season lockout in 2004-'05. The Stanley Cup has been awarded every single year since damn 1893 except for two: 1919, in which the Finals ended early due to a Spanish Flu epidemic; and 2005, because the NHL and NHLPA couldn't negotiate an agreement to play hockey. Lockouts may not be entirely be a commissioner's fault, but presiding over that kind of lack of hockey certainly doesn't help hockey fans like you.
2. Over-expansion. When Bettman took over, the league was at 24 teams. Since then, it expanded to Florida and Anaheim in 1993, moved three northern teams south from '95-'97, and expanded to Nashville, Atlanta, Columbus, and Minnesota over '98-2000, for a total of 30 teams. Many of these expansion franchises have done very poorly, most recently with Atlanta having to move back to Winnipeg (one of the northern cities a team left back in '95-'97). This has two really negative effects: a) it dilutes the talent pool, so it's going to add worse teams while making better teams worse, which is bad for the sport; b) it disenfranchises a ton of fans; you have abandoned fan-bases all over the place.
The thing with relocation of bad teams is that it's actually a good business idea. If there are always floundering teams at the bottom of the league, there are always businessmen looking to sell their teams, which means there's always a huge relocation fee for the NHL to collect. Look at the case of the Thrashers, who are being moved to an arena that seats only 15,015 because they weren't selling enough tickets at an average of 14,685. On the $110 million sale, the NHL makes a $60 million relocation fee. This is sustainable: teams lose a few million dollars a year, and after a decade or so, they are relocated to a city that was abandoned a decade prior, and the NHL makes a ton of money. Then, when they remain unsustainable, they are moved again, and the NHL keeps on profiting.
3. "The new NHL." You're right that Bettman has improved parity, but that's only good to a point. The natural conclusion of "adding parity," of course, is that every game is exactly as likely to end one way as another. That's not good for hockey, as at the end of the day you still want a team that is better at hockey to be more likely to win a hockey game. Adding randomness is not a good way to increase parity. Take the shootout for example: it's a new addition to hockey, and it's been statistically shown to be a random one. Most hockey fans that have been watching since before the most recent lockout, and almost all coaches and players, think the shootout is a ridiculous gimmick and there's nothing wrong with a game ending in a tie.
This extends to more than just the shootouts, though - penalty calling has also become more and more erratic over Bettman's tenure. We've seen little ticky-tack hooks and grabs get called every time in the name of making the game faster, which it has done, but it also means we have to see penalties called for dumb stuff like that. Meanwhile, as we've added a second referee on the ice for every game, we've seen a dilution of officiating talent, which combined with the increased speed of the game means that officials are just getting it wrong more often. This, again, has helped add to the parity of the sport, but is not good for the sport.
4. Personality. At the end of the day, there's a pretty general sentiment that Bettman just doesn't "get hockey." He was an NBA guy primarily, and he came to the NHL in the name of growing it as a business (which, as we've seen above, he's got a good sense for). He came here to grow an American market, but he doesn't understand how. Sometimes, as in the shootout, he tries to do so at the detriment of the game itself. Sometimes, on the other hand, he'll totally miss the mark on what Americans want, like when he tells a Bruin that he can't wear a Red Sox cap in an interview, or he signs a 10-year contract with Versus instead of letting hockey be shown on ESPN, which is where everyone in America watches sports.
The issue of personality is that we hockey fans feel like hockey's different from every other major sport, and we're fiercely proud of that, and at the end of the day, we feel like Bettman doesn't get it. This is shown in the way the league handles supplemental discipline, which seems more based on the offender's status in the media or the resulting injury than it does on the actual dirtiness of a given play. It's also shown in the way he's marketed the sport: we consider hockey to be the "ultimate team sport." The NHL is too often marketed just like the NBA: individual accomplishments, "Crosby vs. Ovechkin" and all that - the shootout, too, is all about one guy vs. one guy, which is why it's such an insulting end to a 65-minute match of the "ultimate team sport." Bettman's smug, condescending personality in every single public appearance doesn't help this any - it kinda communicates, "yeah, I run your sport; what are you gonna do about it?"
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In other news, someone won the Stanley Cup Wednesday! I fucking love when someone wins the Stanley Cup! Woo!
--------------
As I see it, there are more or less four key reasons people dislike the Commissioner:
1. Lockouts. The NHL was formed in 1917, and operated every single season until Gary Bettman took over as commissioner in 1993. Then there was a half-season lockout in 1994 and a full-season lockout in 2004-'05. The Stanley Cup has been awarded every single year since damn 1893 except for two: 1919, in which the Finals ended early due to a Spanish Flu epidemic; and 2005, because the NHL and NHLPA couldn't negotiate an agreement to play hockey. Lockouts may not be entirely be a commissioner's fault, but presiding over that kind of lack of hockey certainly doesn't help hockey fans like you.
2. Over-expansion. When Bettman took over, the league was at 24 teams. Since then, it expanded to Florida and Anaheim in 1993, moved three northern teams south from '95-'97, and expanded to Nashville, Atlanta, Columbus, and Minnesota over '98-2000, for a total of 30 teams. Many of these expansion franchises have done very poorly, most recently with Atlanta having to move back to Winnipeg (one of the northern cities a team left back in '95-'97). This has two really negative effects: a) it dilutes the talent pool, so it's going to add worse teams while making better teams worse, which is bad for the sport; b) it disenfranchises a ton of fans; you have abandoned fan-bases all over the place.
The thing with relocation of bad teams is that it's actually a good business idea. If there are always floundering teams at the bottom of the league, there are always businessmen looking to sell their teams, which means there's always a huge relocation fee for the NHL to collect. Look at the case of the Thrashers, who are being moved to an arena that seats only 15,015 because they weren't selling enough tickets at an average of 14,685. On the $110 million sale, the NHL makes a $60 million relocation fee. This is sustainable: teams lose a few million dollars a year, and after a decade or so, they are relocated to a city that was abandoned a decade prior, and the NHL makes a ton of money. Then, when they remain unsustainable, they are moved again, and the NHL keeps on profiting.
3. "The new NHL." You're right that Bettman has improved parity, but that's only good to a point. The natural conclusion of "adding parity," of course, is that every game is exactly as likely to end one way as another. That's not good for hockey, as at the end of the day you still want a team that is better at hockey to be more likely to win a hockey game. Adding randomness is not a good way to increase parity. Take the shootout for example: it's a new addition to hockey, and it's been statistically shown to be a random one. Most hockey fans that have been watching since before the most recent lockout, and almost all coaches and players, think the shootout is a ridiculous gimmick and there's nothing wrong with a game ending in a tie.
This extends to more than just the shootouts, though - penalty calling has also become more and more erratic over Bettman's tenure. We've seen little ticky-tack hooks and grabs get called every time in the name of making the game faster, which it has done, but it also means we have to see penalties called for dumb stuff like that. Meanwhile, as we've added a second referee on the ice for every game, we've seen a dilution of officiating talent, which combined with the increased speed of the game means that officials are just getting it wrong more often. This, again, has helped add to the parity of the sport, but is not good for the sport.
4. Personality. At the end of the day, there's a pretty general sentiment that Bettman just doesn't "get hockey." He was an NBA guy primarily, and he came to the NHL in the name of growing it as a business (which, as we've seen above, he's got a good sense for). He came here to grow an American market, but he doesn't understand how. Sometimes, as in the shootout, he tries to do so at the detriment of the game itself. Sometimes, on the other hand, he'll totally miss the mark on what Americans want, like when he tells a Bruin that he can't wear a Red Sox cap in an interview, or he signs a 10-year contract with Versus instead of letting hockey be shown on ESPN, which is where everyone in America watches sports.
The issue of personality is that we hockey fans feel like hockey's different from every other major sport, and we're fiercely proud of that, and at the end of the day, we feel like Bettman doesn't get it. This is shown in the way the league handles supplemental discipline, which seems more based on the offender's status in the media or the resulting injury than it does on the actual dirtiness of a given play. It's also shown in the way he's marketed the sport: we consider hockey to be the "ultimate team sport." The NHL is too often marketed just like the NBA: individual accomplishments, "Crosby vs. Ovechkin" and all that - the shootout, too, is all about one guy vs. one guy, which is why it's such an insulting end to a 65-minute match of the "ultimate team sport." Bettman's smug, condescending personality in every single public appearance doesn't help this any - it kinda communicates, "yeah, I run your sport; what are you gonna do about it?"
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In other news, someone won the Stanley Cup Wednesday! I fucking love when someone wins the Stanley Cup! Woo!
Thursday, June 9, 2011
The buyout formula
So, news has broken that Sather plans, as many Ranger fans expected (and many other than me eagerly anticipated), to buy out the remainder of Captain Drury's contract. The same report claims that we are likely to do the same with Wolski's. Before looking at what that will mean for the Rangers' salary cap going forward, let's do a quick recap of exactly what it means.
So, buying out a contract is exactly what it sounds like: the team pays the player some of the money they owe, based on the contract they signed, but they relieve the player of his duties to them. The player is then an unrestricted free agent, free to go negotiate with no restrictions with whomever he likes.
Of course, the NHL does place some restrictions on the team. After all, if buying a contract out took it out of the cap entirely, super-rich teams could just eat up a bunch of good contracts and then buy out the ones it doesn't want. That would help them circumvent the cap, and also it would be obviously shitty for everyone. Hence these rules.
First, the calendar. Today is June 9, still clearly part of the 2010-11 season (the Bruins are thrilled to remind us). Technically, the 2011-12 season begins on July 1, 2011, with the current season expiring on the final day of June. Which means July 1st is the date that all contracts terminating the previous season have expired: impending unrestricted free agents actually become free agents and can start negotiating new contracts. That also means that any teams with potential restrictions on those negotiations must take care of their business by then. For example, restricted free agents must be given qualifying offers by then, or they will default to becoming unrestricted. Also, any buyouts must be complete by that date.
The window for buyouts is therefore very small: its starts on June 15 (or on the day after the end of the Finals, if they go past then), and it ends on June 30 (the last day of the season). In that window, a team can choose to buy out the remainder of anyone's contract, but they will get penalized for it under the salary cap (it may be desirable anyway, because in the short term, the penalty will be smaller than the salary in question).
The way the calculation works is a little complicated. I've covered it here before, in talks about Redden last summer, but it's always fun to go over again. First, you calculate the total monetary value of the buyout. Take the total remaining salary (not cap hit) on the years remaining in the contract, and multiply it by: 1/3 if the player is under 26, or 2/3 if the player is 26 or older. Drury is 34 (over 26), and he has one year remaining on his contract, with a paid salary of $5 million (despite his cap hit of $7.05 million, based on previous seasons in the same contract). That gives him a total salary buyout of $5 million, which means the monetary value of the buyout is 2/3 of $5 million, or $3.33 million.
The buyout will incur a cap hit for twice the length of the buyout. So, because the Rangers will buy out the final year of Drury's contract, the cap hit will last for two more years: the remaining year of the contract, and then one more. If they were buying out two years, it would last for those two years, and then two more. Et cetera.
Finally, here's how the actual hit is calculated. First, spread the buyout value out evenly across those seasons. In this case, $3.33 million / 2 years = $1.67 million per year. Call that the per-season buyout value. For the years remaining in the contract, the team owes the original cap hit, minus a "discount." The discount is calculated by subtracting the per-season buyout value from the player's salary for that season (for some reason). So, in Drury's case, the discount is his expected salary of $5 million, minus that figure of $1.67 million, or $3.33 million. That $3.33 million represents the amount we will save this coming season, off of Drury's $7.05 million cap hit, leaving us on the books for $3,716,667 (which I believe is the actual monetary amount we will end up paying Drury).
For the seasons after the contract would have ended, the team is charged an additional cap hit equal to that per-season buyout value. So, in this case, we'll also be charged $1.67 million against the 2012-13 cap.
So, the long and the short of it is this: if we kept Drury on the books, we would be on the hook for $7.05 million against the cap this season and nothing next season, and we'd have one Chris Drury. Instead, we will be on the hook for $3,716,667 this season and $1,666,667 next season, and we'll have zero Chris Druries.
Put a simpler way, we're paying $1.67 million under next season's cap and losing Drury in order to save $3.33 million under this season's cap. I will leave the determination of whether or not this is worth it to the reader, but I guess it depends what we end up doing with that space. It's worth noting that Larry Brooks has reported that the Rangers do not plan to buy out either Wolski's or Avery's contract, but that Glen Sather has indeed already told Drury that his will be bought out.
It's also worth noting that Brad Richards (with whom, as we learned earlier in this post, the Stars have until July 1 to try to work something out before he is an unrestricted free agent) has nothing but rumors surrounding him right now, including a couple that he's looking for a contract in the neighborhood of $7 million and 6 years, which is probably too rich for the Rangers' blood right now. Also, apparently the Leafs are very interested? Understand that Richards could just go hit the free agent market on July 1, or his negotiating rights could be traded by the Stars to some other team that would then sign him before that deadline.
So, that's the deal. Unlike most Ranger fans, I really still liked Drury. I think he brought a lot to the team, and I think a lot of Ranger fans are still knee-jerk opposed to anyone over 30 (unless he's a 30-goal scorer or Sean Avery), which isn't fair. Given that this was the last season of his contract anyway, I have to wonder if saving the $3.33 million was really worth it, but I guess it remains to be seen. At least, it gives us a little more room to re-sign some of our overworked youth, many of whom (Callahan, Dubinsky, Anisimov, Boyle, Gilroy, Sauer) are up for renewals this summer. I'll try to post a new look at our cap situation, given the latest developments, at some point soon.
So, buying out a contract is exactly what it sounds like: the team pays the player some of the money they owe, based on the contract they signed, but they relieve the player of his duties to them. The player is then an unrestricted free agent, free to go negotiate with no restrictions with whomever he likes.
Of course, the NHL does place some restrictions on the team. After all, if buying a contract out took it out of the cap entirely, super-rich teams could just eat up a bunch of good contracts and then buy out the ones it doesn't want. That would help them circumvent the cap, and also it would be obviously shitty for everyone. Hence these rules.
First, the calendar. Today is June 9, still clearly part of the 2010-11 season (the Bruins are thrilled to remind us). Technically, the 2011-12 season begins on July 1, 2011, with the current season expiring on the final day of June. Which means July 1st is the date that all contracts terminating the previous season have expired: impending unrestricted free agents actually become free agents and can start negotiating new contracts. That also means that any teams with potential restrictions on those negotiations must take care of their business by then. For example, restricted free agents must be given qualifying offers by then, or they will default to becoming unrestricted. Also, any buyouts must be complete by that date.
The window for buyouts is therefore very small: its starts on June 15 (or on the day after the end of the Finals, if they go past then), and it ends on June 30 (the last day of the season). In that window, a team can choose to buy out the remainder of anyone's contract, but they will get penalized for it under the salary cap (it may be desirable anyway, because in the short term, the penalty will be smaller than the salary in question).
The way the calculation works is a little complicated. I've covered it here before, in talks about Redden last summer, but it's always fun to go over again. First, you calculate the total monetary value of the buyout. Take the total remaining salary (not cap hit) on the years remaining in the contract, and multiply it by: 1/3 if the player is under 26, or 2/3 if the player is 26 or older. Drury is 34 (over 26), and he has one year remaining on his contract, with a paid salary of $5 million (despite his cap hit of $7.05 million, based on previous seasons in the same contract). That gives him a total salary buyout of $5 million, which means the monetary value of the buyout is 2/3 of $5 million, or $3.33 million.
The buyout will incur a cap hit for twice the length of the buyout. So, because the Rangers will buy out the final year of Drury's contract, the cap hit will last for two more years: the remaining year of the contract, and then one more. If they were buying out two years, it would last for those two years, and then two more. Et cetera.
Finally, here's how the actual hit is calculated. First, spread the buyout value out evenly across those seasons. In this case, $3.33 million / 2 years = $1.67 million per year. Call that the per-season buyout value. For the years remaining in the contract, the team owes the original cap hit, minus a "discount." The discount is calculated by subtracting the per-season buyout value from the player's salary for that season (for some reason). So, in Drury's case, the discount is his expected salary of $5 million, minus that figure of $1.67 million, or $3.33 million. That $3.33 million represents the amount we will save this coming season, off of Drury's $7.05 million cap hit, leaving us on the books for $3,716,667 (which I believe is the actual monetary amount we will end up paying Drury).
For the seasons after the contract would have ended, the team is charged an additional cap hit equal to that per-season buyout value. So, in this case, we'll also be charged $1.67 million against the 2012-13 cap.
So, the long and the short of it is this: if we kept Drury on the books, we would be on the hook for $7.05 million against the cap this season and nothing next season, and we'd have one Chris Drury. Instead, we will be on the hook for $3,716,667 this season and $1,666,667 next season, and we'll have zero Chris Druries.
Put a simpler way, we're paying $1.67 million under next season's cap and losing Drury in order to save $3.33 million under this season's cap. I will leave the determination of whether or not this is worth it to the reader, but I guess it depends what we end up doing with that space. It's worth noting that Larry Brooks has reported that the Rangers do not plan to buy out either Wolski's or Avery's contract, but that Glen Sather has indeed already told Drury that his will be bought out.
It's also worth noting that Brad Richards (with whom, as we learned earlier in this post, the Stars have until July 1 to try to work something out before he is an unrestricted free agent) has nothing but rumors surrounding him right now, including a couple that he's looking for a contract in the neighborhood of $7 million and 6 years, which is probably too rich for the Rangers' blood right now. Also, apparently the Leafs are very interested? Understand that Richards could just go hit the free agent market on July 1, or his negotiating rights could be traded by the Stars to some other team that would then sign him before that deadline.
So, that's the deal. Unlike most Ranger fans, I really still liked Drury. I think he brought a lot to the team, and I think a lot of Ranger fans are still knee-jerk opposed to anyone over 30 (unless he's a 30-goal scorer or Sean Avery), which isn't fair. Given that this was the last season of his contract anyway, I have to wonder if saving the $3.33 million was really worth it, but I guess it remains to be seen. At least, it gives us a little more room to re-sign some of our overworked youth, many of whom (Callahan, Dubinsky, Anisimov, Boyle, Gilroy, Sauer) are up for renewals this summer. I'll try to post a new look at our cap situation, given the latest developments, at some point soon.
Saturday, June 4, 2011
A Tale of Three Cities, Part Two
(Part One here)
When we left our tale, Gary Bettman had just heavily insinuated that Thrashers fans' low attendance numbers are to blame for this relocation to a city I will probably not start referring to as "The 'Peg." So, let's look at those attendance numbers. In my very short search, I was only able to find numbers back as far as 2000-'01, which probably casts the Thrash in a slightly-worse-than-accurate light, since it leaves off their probably-well-attended inaugural season. Across their ten others in Atlanta, the team averaged 14,685 fans per game. Hey, maybe Bettman's right: that sounds kinda low, huh?
Here's the fun fact: the team will be moving to the current home of the Manitoba Moose, the MTS Centre in downtown Winnipeg. Its total sell-out capacity for a hockey game is 15,015. That is to say, the arena, if it sells out every single game for the next decade, will average exactly 330 people more than the average Thrashers game over the last decade. Incidentally, 15,015 is also 378 fewer people than fit in the Winnipeg Arena, previously-mentioned home of the Winnipeg Jets.
And thus, now, a brief list of facts and things we are being asked to believe are facts:
--In 1996, the Winnipeg Jets had to be moved to Phoenix because, among other things, their arena, the Winnipeg Arena, was too small.
--The Winnipeg Arena seated 15,393 for hockey.
--The Atlanta Thrashes have to be moved to Winnipeg because, among other things, their annual attendance has been too low.
--The Thrashers have averaged 14,685 fans per game over the last decade.
--The arena in Winnipeg to which the Thrashers are being moved, the MTS Centre, seats 15,015 for hockey.
Look, yes, obviously, there are other factors than attendance that go into considering an NHL market. For example, it must be cheaper to run a 15,000-seat arena in Winnipeg, MB than it is to run an 18,000-seat house in Atlanta, GA. And surely there are financial advantages to being the only major sports team in the province (as opposed to competing with the Braves, Hawks, and Falcons). But the fact lingers that attendance was specifically mentioned as a major factor in this move, just like arena size was specifically mentioned in the Jets' move to Phoenix, and that's not really adding up to me.
Which brings us back to the inciting question: exactly how did this happen? Surely Gary Bettman isn't just weirdly in love with Arizona. In fact, his seeming inconsistency here is really just smart for the NHL's profit margin. Recall that Bettman has always championed the league making money as its real mark of success. What he's done here is take two very unprofitable franchises and use them both to make profit for the league itself (individual teams' profit margins be damned).
For context, let's take a look at just how unprofitable the Thrashers are. It's hard to find consistent, comparable data across seasons for all NHL teams, but Forbes Magazine has done some profiling of NHL teams over the last few seasons, and I used what data they had here. In 2009-2010, the Thrashers' operating revenue was -$8 million, which is to say they lost $8 million to operate that year. The previous season, they lost $1.8 million; $6.1 million the season before that; and $5.4 million in 2005-2006. That's all the (consistent) data I could find, a scattered four-season average loss of $5.325 million per season. That sounds like a lot, but I'm giving it to you now mostly for context.
True North Sports & Entertainment is spending $170 million on the purchase of the Thrashers. Of that money, $110 goes to the Atlanta Spirit in exchange for the franchise itself. The other $60 million goes to the NHL, as a relocation fee. The franchise loses $5 million a season, and Bettman still makes $60 million off of them.
This is actually a pretty viable business model. It's only reasonable to expect a relocation fee: the NHL wants to make a clear statement that moving franchises is bad. It makes it harder for teams to maintain fans, it's a lot of upkeep, this is all pretty obvious. So we're pretty comfortable with the idea of team ownership being penalized financially, to the tune of a pretty large sum, for moving a team. The message is: don't move teams. Once you've got that fee in place, though, it becomes an emergent strategy to abuse it. The Thrashers are losing a little money every season, and Bettman just lets it go. One day, the owners get tired of losing money, some new owner picks up the team and moves them, paying a tithe to the NHL that surpasses the combined losses of the franchise since it started losing money. Then, in a decade, when the Winnipeg Whatevers have once again lost money every season, and True North gets tired of footing the bill, the whole thing happens again. The NHL keep making money off of perennially awful teams. Pretty good, eh?
There's more. Let's say you have a franchise like the Phoenix Coyotes. According to Forbes, Phoenix lost (in the three seasons Forbes had data for) $9.7 million, $18.5 million, and $20.1 million. Way more than Atlanta was losing. At that rate, a $60 million relocation fee wasn't gonna surpass more than a few seasons' worth of losses. So Bettman steps in and buys the team on behalf of the NHL, for $140 million (no relocation fee, of course). This is an investment Bettman can justify now better than ever: he knows the city of Glendale really wants to keep its NHL team (unlike Atlanta politicians, who have been significantly quieter). This affords him the opportunity to hang relocation over their heads. Bettman blames the monetary losses of the Coyotes on the city itself, claiming that it would be a profitable franchise elsewhere. He threatens to move the franchise, unless the city of Glendale is willing to recoup the NHL's losses. Glendale city council signs a deal to pay the NHL $25 million to keep the franchise in Phoenix for the season, with the NHL holding the right to renew the deal every season for up to 10 more years.
Now Bettman holds all the damn cards. If a buyer comes forward with a good offer on the table, the NHL can sell the team at any given time (the agreement is only renewed one season at a time). If the new owner wants to relocate at that point, Glendale can't do much to stop it, and the NHL collects a relocation fee. If no buyer comes forward, or Bettman doesn't like a buyer's offer, the NHL keeps operating the team for the time being, and as long as he can keep their annual losses under $25 million, he's still making money on them.
And that's how you turn two of the the NHL's three least profitable franchises (sorry, Fish Sticks) into money-makers for the league, without actually putting forward any effort to make them better hockey teams. See? Shitty at understanding hockey, surprisingly competent at business.
I'm not sure what my point was here. I'm not going to claim that Atlanta necessarily deserves an NHL franchise, or that Winnipeg necessarily doesn't. In fact, I'm probably of the opinion that the whole late-90s expansion that brought us Atlanta, Columbus, Minnesota, and Nashville diluted the league too much for its own good, and the state of the NHL might be a little stronger if it were still 26 teams today instead of 30. I just thought it might be useful to look at the real numbers driving what happened in Winnipeg, Phoenix, and Atlanta: the NHL doesn't necessarily like Arizona more than it likes Georgia, and running a franchise in Manitoba isn't necessarily more profitable than running one in Georgia. Rather, it was very profitable for the NHL itself to keep the Coyotes in Phoenix and move the Thrashers to Winnipeg. So, that's where we are.
My sympathy goes out to all Thrashers fans everywhere. It probably won't make you feel a ton better, but remember that adorable ukelele girl who wrote that Puck Bunnies song? She's back, with a message to Winnipeg and Gary Bettman, music courtesy of Cee-Lo Green. And so, here it is, your Moment of Zen:
When we left our tale, Gary Bettman had just heavily insinuated that Thrashers fans' low attendance numbers are to blame for this relocation to a city I will probably not start referring to as "The 'Peg." So, let's look at those attendance numbers. In my very short search, I was only able to find numbers back as far as 2000-'01, which probably casts the Thrash in a slightly-worse-than-accurate light, since it leaves off their probably-well-attended inaugural season. Across their ten others in Atlanta, the team averaged 14,685 fans per game. Hey, maybe Bettman's right: that sounds kinda low, huh?
Here's the fun fact: the team will be moving to the current home of the Manitoba Moose, the MTS Centre in downtown Winnipeg. Its total sell-out capacity for a hockey game is 15,015. That is to say, the arena, if it sells out every single game for the next decade, will average exactly 330 people more than the average Thrashers game over the last decade. Incidentally, 15,015 is also 378 fewer people than fit in the Winnipeg Arena, previously-mentioned home of the Winnipeg Jets.
And thus, now, a brief list of facts and things we are being asked to believe are facts:
--In 1996, the Winnipeg Jets had to be moved to Phoenix because, among other things, their arena, the Winnipeg Arena, was too small.
--The Winnipeg Arena seated 15,393 for hockey.
--The Atlanta Thrashes have to be moved to Winnipeg because, among other things, their annual attendance has been too low.
--The Thrashers have averaged 14,685 fans per game over the last decade.
--The arena in Winnipeg to which the Thrashers are being moved, the MTS Centre, seats 15,015 for hockey.
Look, yes, obviously, there are other factors than attendance that go into considering an NHL market. For example, it must be cheaper to run a 15,000-seat arena in Winnipeg, MB than it is to run an 18,000-seat house in Atlanta, GA. And surely there are financial advantages to being the only major sports team in the province (as opposed to competing with the Braves, Hawks, and Falcons). But the fact lingers that attendance was specifically mentioned as a major factor in this move, just like arena size was specifically mentioned in the Jets' move to Phoenix, and that's not really adding up to me.
Which brings us back to the inciting question: exactly how did this happen? Surely Gary Bettman isn't just weirdly in love with Arizona. In fact, his seeming inconsistency here is really just smart for the NHL's profit margin. Recall that Bettman has always championed the league making money as its real mark of success. What he's done here is take two very unprofitable franchises and use them both to make profit for the league itself (individual teams' profit margins be damned).
For context, let's take a look at just how unprofitable the Thrashers are. It's hard to find consistent, comparable data across seasons for all NHL teams, but Forbes Magazine has done some profiling of NHL teams over the last few seasons, and I used what data they had here. In 2009-2010, the Thrashers' operating revenue was -$8 million, which is to say they lost $8 million to operate that year. The previous season, they lost $1.8 million; $6.1 million the season before that; and $5.4 million in 2005-2006. That's all the (consistent) data I could find, a scattered four-season average loss of $5.325 million per season. That sounds like a lot, but I'm giving it to you now mostly for context.
True North Sports & Entertainment is spending $170 million on the purchase of the Thrashers. Of that money, $110 goes to the Atlanta Spirit in exchange for the franchise itself. The other $60 million goes to the NHL, as a relocation fee. The franchise loses $5 million a season, and Bettman still makes $60 million off of them.
This is actually a pretty viable business model. It's only reasonable to expect a relocation fee: the NHL wants to make a clear statement that moving franchises is bad. It makes it harder for teams to maintain fans, it's a lot of upkeep, this is all pretty obvious. So we're pretty comfortable with the idea of team ownership being penalized financially, to the tune of a pretty large sum, for moving a team. The message is: don't move teams. Once you've got that fee in place, though, it becomes an emergent strategy to abuse it. The Thrashers are losing a little money every season, and Bettman just lets it go. One day, the owners get tired of losing money, some new owner picks up the team and moves them, paying a tithe to the NHL that surpasses the combined losses of the franchise since it started losing money. Then, in a decade, when the Winnipeg Whatevers have once again lost money every season, and True North gets tired of footing the bill, the whole thing happens again. The NHL keep making money off of perennially awful teams. Pretty good, eh?
There's more. Let's say you have a franchise like the Phoenix Coyotes. According to Forbes, Phoenix lost (in the three seasons Forbes had data for) $9.7 million, $18.5 million, and $20.1 million. Way more than Atlanta was losing. At that rate, a $60 million relocation fee wasn't gonna surpass more than a few seasons' worth of losses. So Bettman steps in and buys the team on behalf of the NHL, for $140 million (no relocation fee, of course). This is an investment Bettman can justify now better than ever: he knows the city of Glendale really wants to keep its NHL team (unlike Atlanta politicians, who have been significantly quieter). This affords him the opportunity to hang relocation over their heads. Bettman blames the monetary losses of the Coyotes on the city itself, claiming that it would be a profitable franchise elsewhere. He threatens to move the franchise, unless the city of Glendale is willing to recoup the NHL's losses. Glendale city council signs a deal to pay the NHL $25 million to keep the franchise in Phoenix for the season, with the NHL holding the right to renew the deal every season for up to 10 more years.
Now Bettman holds all the damn cards. If a buyer comes forward with a good offer on the table, the NHL can sell the team at any given time (the agreement is only renewed one season at a time). If the new owner wants to relocate at that point, Glendale can't do much to stop it, and the NHL collects a relocation fee. If no buyer comes forward, or Bettman doesn't like a buyer's offer, the NHL keeps operating the team for the time being, and as long as he can keep their annual losses under $25 million, he's still making money on them.
And that's how you turn two of the the NHL's three least profitable franchises (sorry, Fish Sticks) into money-makers for the league, without actually putting forward any effort to make them better hockey teams. See? Shitty at understanding hockey, surprisingly competent at business.
I'm not sure what my point was here. I'm not going to claim that Atlanta necessarily deserves an NHL franchise, or that Winnipeg necessarily doesn't. In fact, I'm probably of the opinion that the whole late-90s expansion that brought us Atlanta, Columbus, Minnesota, and Nashville diluted the league too much for its own good, and the state of the NHL might be a little stronger if it were still 26 teams today instead of 30. I just thought it might be useful to look at the real numbers driving what happened in Winnipeg, Phoenix, and Atlanta: the NHL doesn't necessarily like Arizona more than it likes Georgia, and running a franchise in Manitoba isn't necessarily more profitable than running one in Georgia. Rather, it was very profitable for the NHL itself to keep the Coyotes in Phoenix and move the Thrashers to Winnipeg. So, that's where we are.
My sympathy goes out to all Thrashers fans everywhere. It probably won't make you feel a ton better, but remember that adorable ukelele girl who wrote that Puck Bunnies song? She's back, with a message to Winnipeg and Gary Bettman, music courtesy of Cee-Lo Green. And so, here it is, your Moment of Zen:
Friday, June 3, 2011
A Tale of Three Cities, Part One
Winnipeg, Atlanta, and Phoenix, by the numbers: I come to quantify the Thrashers, not to praise them. In the wake of the news of the Thrash's impending relocation to Manitoba, while Canadians are celebrating another franchise's return to the country that created the sport, a handful of Atlantans (my eminently pitiable father among them) are left with some reasonable questions. Chiefly: exactly how did this happen? I'm in no position to make an argument about what awful, uncommitted owners the Atlanta Spirit were (and they were) - that's better left to plenty of other people. But I am in a position to type some numbers at you, and sometimes even do some arithmetic to them. So let's go with that one.
Many years ago, there was a hockey team you may have heard of called the Winnipeg Jets. They were some WHA team for a while, then they became some NHL team. They were okay? In 1980-81, they apparently won 9 games of the then 80-game season. But then they got a little better than that. Anyway, they ran into some financial trouble in the early 90s, because NHL players started to make a lot more money, but they were still located in Winnipeg, MB. Also, they had one of the smallest arenas in the league, seating only 15,393.
In 1996, said financial troubles ultimately overwhelmed what was apparently a very small but fiercely loyal fan base, and the Winnipeg Jets were bought by some guy named Jerry Colangelo for an amount of money that I couldn't easily find and did not look very hard for. They were moved to Glendale, Arizona and redubbed the Phoenix Coyotes. The Coyotes, who were actually pretty decent, played in a place called the America West Arena, which seated 16,210 for hockey. The arena unsurprisingly sucked at doing so, since it marked the first-ever time that 60% of Phoenix had ever seen ice outside of a tumbler [citation needed].
I told you the arena sucked so I could tell you that they built a new rink, Glendale Arena, which actually works like an NHL rink and seats 17,534. Despite that, the franchise again ran into financial trouble: turns out a brand new, expensive arena and a mediocre hockey team don't jive well fiscally with the indifferent population of a desert city with an average high temperature of 66 degrees in December, a day's drive from Tijuana and over 2500 miles from Montréal. With no buyers in on the table, in 2009, the Phoenix Coyotes filed for bankruptcy.
Meanwhile, 19 years after losing their Flames to Calgary, Atlanta saw a new expansion team drop the puck for its first NHL game: the Thrashers. Like the previously-mentioned Jets, they were also pretty shitty. You know most of this part, so I'll skip it: they stayed pretty shitty, and they stayed in the middle of Georgia, and they were therefore not a super-profitable team.
With similar stages set, the two flagging teams ended up taking radically different paths. When no buyer was found for the Coyotes, the NHL stepped in, proudly proclaiming that it would not abandon a franchise, and bought the team itself, for $140 million. It was labeled a temporary measure, but to date, the Coyotes are still owned by the NHL. Two years later, the same NHL, under the same commissioner, did nothing to prevent the sale of the Thrashers by their disinterested ownership to True North Sports & Entertainment, who intend to move them back to the place our story began, Winnipeg.
Again, I'm not here to focus on the parts that make sense: the ownership of the Thrashers was never looking to make the team good, while the Coyotes showed some promise; the city council of Glendale was working to keep the Coyotes around, while Atlanta wasn't; etc. I'm here to tell you some numbers and come to the defense of a fan base at which Gary Bettman has insinuated blame. I might not be writing this if, in the weeks leading up to the sale, Bettman hadn't said this:
---------------
I understand that there may be dissatisfaction there, but demonstrating your dissatisfaction by not going to games is an interesting strategy. It's your absolute right, but if it becomes a turnoff for anybody who might want to buy the franchise, the long-term consequences could be severe.
---------------
WRONG. Well, not technically wrong, just extremely misleading. Atlanta did not lose the Thrashers due to a waning fan base. Yes, you have to follow the money, but then you have to make sure you keep following it: it is not actually more profitable to own a team in Winnipeg than to own one in Atlanta. Rather, it was more profitable for the NHL to move the Thrashers than to leave them in Georgia. Bettman is bad at understanding hockey, pretty much across the board. But give the guy his due: he's a decent businessman.
I should leave my office now, so let's call this part one of a two-part eulogy. In part two, I intend to look at two factors: 1) why I don't believe that Atlanta is a less profitable NHL city than Winnipeg, and 2) why I do think that the NHL profits from the relocation (moreso than a return of the Phoenix team).
Many years ago, there was a hockey team you may have heard of called the Winnipeg Jets. They were some WHA team for a while, then they became some NHL team. They were okay? In 1980-81, they apparently won 9 games of the then 80-game season. But then they got a little better than that. Anyway, they ran into some financial trouble in the early 90s, because NHL players started to make a lot more money, but they were still located in Winnipeg, MB. Also, they had one of the smallest arenas in the league, seating only 15,393.
In 1996, said financial troubles ultimately overwhelmed what was apparently a very small but fiercely loyal fan base, and the Winnipeg Jets were bought by some guy named Jerry Colangelo for an amount of money that I couldn't easily find and did not look very hard for. They were moved to Glendale, Arizona and redubbed the Phoenix Coyotes. The Coyotes, who were actually pretty decent, played in a place called the America West Arena, which seated 16,210 for hockey. The arena unsurprisingly sucked at doing so, since it marked the first-ever time that 60% of Phoenix had ever seen ice outside of a tumbler [citation needed].
I told you the arena sucked so I could tell you that they built a new rink, Glendale Arena, which actually works like an NHL rink and seats 17,534. Despite that, the franchise again ran into financial trouble: turns out a brand new, expensive arena and a mediocre hockey team don't jive well fiscally with the indifferent population of a desert city with an average high temperature of 66 degrees in December, a day's drive from Tijuana and over 2500 miles from Montréal. With no buyers in on the table, in 2009, the Phoenix Coyotes filed for bankruptcy.
Meanwhile, 19 years after losing their Flames to Calgary, Atlanta saw a new expansion team drop the puck for its first NHL game: the Thrashers. Like the previously-mentioned Jets, they were also pretty shitty. You know most of this part, so I'll skip it: they stayed pretty shitty, and they stayed in the middle of Georgia, and they were therefore not a super-profitable team.
With similar stages set, the two flagging teams ended up taking radically different paths. When no buyer was found for the Coyotes, the NHL stepped in, proudly proclaiming that it would not abandon a franchise, and bought the team itself, for $140 million. It was labeled a temporary measure, but to date, the Coyotes are still owned by the NHL. Two years later, the same NHL, under the same commissioner, did nothing to prevent the sale of the Thrashers by their disinterested ownership to True North Sports & Entertainment, who intend to move them back to the place our story began, Winnipeg.
Again, I'm not here to focus on the parts that make sense: the ownership of the Thrashers was never looking to make the team good, while the Coyotes showed some promise; the city council of Glendale was working to keep the Coyotes around, while Atlanta wasn't; etc. I'm here to tell you some numbers and come to the defense of a fan base at which Gary Bettman has insinuated blame. I might not be writing this if, in the weeks leading up to the sale, Bettman hadn't said this:
---------------
I understand that there may be dissatisfaction there, but demonstrating your dissatisfaction by not going to games is an interesting strategy. It's your absolute right, but if it becomes a turnoff for anybody who might want to buy the franchise, the long-term consequences could be severe.
---------------
WRONG. Well, not technically wrong, just extremely misleading. Atlanta did not lose the Thrashers due to a waning fan base. Yes, you have to follow the money, but then you have to make sure you keep following it: it is not actually more profitable to own a team in Winnipeg than to own one in Atlanta. Rather, it was more profitable for the NHL to move the Thrashers than to leave them in Georgia. Bettman is bad at understanding hockey, pretty much across the board. But give the guy his due: he's a decent businessman.
I should leave my office now, so let's call this part one of a two-part eulogy. In part two, I intend to look at two factors: 1) why I don't believe that Atlanta is a less profitable NHL city than Winnipeg, and 2) why I do think that the NHL profits from the relocation (moreso than a return of the Phoenix team).
Thursday, June 2, 2011
Oh hey guys did you know I write a hockey blog
So, Blogger went down for a day a few weeks ago. When it came back, I kinda expected the entry I had written, that it lost, to eventually be restored, but it was not. Sad times. You would have liked it: Denis Potvin, who sucks, had made some disparaging comments about Avery's support of gay marriage. I made some jokes about a defense of the sanctity of marriage coming from a guy who beat his wife. Fun times were had by all. Oh, well.
While I was waiting for the post to come back (which, in the Gantt chart in my head, had to happen before I returned to posting), some shit went down that I had absolutely no idea how to write anything about, to the tune of Derek Boogaard passing away. I still don't know how to write anything about that.
Then the news that the Atlanta Spirit has sold the Atlanta Thrashers to True North Entertainment, which intends to relocate them to Winnipeg, Manitoba. That sale is pending 75% approval from the NHL Board of Governors (made up mostly of the owners and GMs of the league's 30 teams), and the move itself is pending a 50% approval from the same board. Both will absolutely come in their meeting on June 21, and then we will lose the Thrashers. More on that, by the numbers, in a later post, I think.
As long as we're on the hopefully-not-empty promises train, I will also get back to analyzing our cap situation soon.
Finally, some good news: you may have heard yesterday that Colin Campbell is stepping down as NHL's head disciplinarian (he will be retaining his post as VP of Hockey Operations). Rumor has it Brendan Shanahan will be taking over. This is largely awesome, because Brendan Shanahan understands how hitting in hockey is supposed to work. I'm a little afraid for Shanny, since he's taken on a job that is bound to get him hated by lots of hockey fans, but for now, I have to put my faith in him to start to overhaul a very broken system. So, hooray for that.
Anyway, I'm writing this thing again, is the point.
While I was waiting for the post to come back (which, in the Gantt chart in my head, had to happen before I returned to posting), some shit went down that I had absolutely no idea how to write anything about, to the tune of Derek Boogaard passing away. I still don't know how to write anything about that.
Then the news that the Atlanta Spirit has sold the Atlanta Thrashers to True North Entertainment, which intends to relocate them to Winnipeg, Manitoba. That sale is pending 75% approval from the NHL Board of Governors (made up mostly of the owners and GMs of the league's 30 teams), and the move itself is pending a 50% approval from the same board. Both will absolutely come in their meeting on June 21, and then we will lose the Thrashers. More on that, by the numbers, in a later post, I think.
As long as we're on the hopefully-not-empty promises train, I will also get back to analyzing our cap situation soon.
Finally, some good news: you may have heard yesterday that Colin Campbell is stepping down as NHL's head disciplinarian (he will be retaining his post as VP of Hockey Operations). Rumor has it Brendan Shanahan will be taking over. This is largely awesome, because Brendan Shanahan understands how hitting in hockey is supposed to work. I'm a little afraid for Shanny, since he's taken on a job that is bound to get him hated by lots of hockey fans, but for now, I have to put my faith in him to start to overhaul a very broken system. So, hooray for that.
Anyway, I'm writing this thing again, is the point.
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