Sunday, April 29, 2012

Colour of the financial tape is RED in Phoenix, Nashville

As fans celebrated the Coyotes' most successful season in Arizona, four of seven Glendale council members directed staff to move forward with a deal that could include the city paying a future Coyotes owner $17 million next year to manage the city-owned arena.  -- Arizona Republic April 28, 2012

Much has been made of the financial straits of the Phoenix Coyotes, the wards of the NHL, recipients of millions of dollars from the home community of Glendale, mainly it seems just to provide for a tenant for the fancy skating rink in the suburbs of Phoenix.

As it is the, Coyotes, should they remain in the desert after their fascinating playoff run, would seem to be in line to be a drain on the Glendale taxpayers for a number of years to come, such is the nature of the latest negotiations between the city and prospective suitors.

Arizona Republic-- Glendale edges towards Phoenix Coyotes deal
Phoenix Business Journal-- Very different Phoenix Coyotes views from Canada, Arizona
Phoenix Business Journal-- Phoenix Coyotes enter round two but ownership challenges remain
Phoenix Business Journal-- Jamison moving forward with Phoenix Coyotes bid
Globe and Mail-- Coyotes succeed with scant resources

Yet lost in all this discussion of red ink to match those fancy red home jersey's is the fact that the Predators aren't exactly the poster children for a solid financial footing.

The leader of the local ownership group said members have been forced to put $60 million of their own money into the operation over the past five years, largely to cover losses. The city has given the Predators $38.6 million in the same period. -- The Tennessean, April 29, 2012

The Tennessean, the Nashville paper that focuses a fair amount of attention on the ice developments of the home team has also put together an interesting financial review of the Predators at the moment, a team that has never been as successful as it is today and yet still is losing money, requiring financial injections from local partners who may be wondering just when they get a return on that investment.

And while the fans wave their towels and sing in the stands the questions being asked are if the business model is sustainable in Music City?

The Tennessean-- Profit eludes Nashville Predators despite on-ice success, public money
The Tennessean -- Predators timeline
The Tennessean-- Nashville Predators will pay to keep top players, chairman says
The Tennessean-- Predator's Metro subsidy was part of labor dispute between NHL, players

The Preds and Coyotes aren't the only teams with money woes in the NHL, the Panthers seemingly are forever hanging a For Sale sign out in front of the rink and in New Jersey a nasty internal feud has many suggesting that the Devils may just toss the keys across the Hudson to the NHL offices at the end of the season.

Other warning signs percolate in places such as Long Island, Tampa Bay, Columbus and Carolina (even St. Louis hasn't closed a deal yet), all teams that place regularly at the bottom of the Forbes listings of hockey teams values, a Rolodex of financial misery that changes dynamic each year, with alternating teams from year to year, mostly of the same name, same locations just different positions at the bottom of the list it seems.

All of which may help Gary Bettman make a financial presentation at the next round of CBA discussions over the summer.

But if the prospectus is to show that the NHL is a healthy, vibrant group, with a workable financial blue print for success, reading the financial news from Phoenix and Nashville in this second round may provide more information than the box scores after each game.

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