The situation in Phoenix has only become crazier since my last piece on the Phoenix Coyotes death watch hit the presses. Media from all over North America has started picking up the story, including major outlets and publications like FOX Business News and Forbes, and the dilemma in the desert has even started creating political waves in Arizona, with the Glendale Tea Party Patriots threatening to protest at the next Glendale town hall meeting if the deal to pay out taxpayer dollars to potential owner Matt Hulsizer isn’t terminated.
But what makes this moment in time the best opportunity for a return of the NHL to Winnipeg is that there isn’t just one franchise on the brink of changing hometowns, there are at least two. The Atlanta Thrashers also appear to be on the verge of relocation, leaving the NHL in a desperate situation with two franchises potentially needing a new home, but only one capable and ready to house an NHL franchise.
The Atlanta Thrashers are currently owned by the Atlanta Sprit Group, the parent group that owns both the Thrashers and Atlanta’s NBA franchise, the Atlanta Hawks. Atlanta Spirit also owns the operating rights to Phillips Arena, in which both the Hawks and Thrashers are the main tenants.
The Thrashers were an expansion team awarded to Atlanta in June of 1997, playing their first season in 1999. The Thrashers signaled the NHL’s first return to the Georgia market since the Atlanta Flames relocated to Calgary in 1980. In their first few seasons, the Thrashers finished near the bottom of the Southeast Division, failing to make the playoffs until the 2006-07 season. That year Atlanta would finish first in their division but ended up getting swept by the New York Rangers in the first round.
The ownership of the Thrashers, Hawks and Phillips Arena is shared amongst a group of investors who have not always seen eye to eye. In fact, a lawsuit, settled three days before Christmas 2010, had been raging since 2005, sparked by one faction of investors acquiring a player for the Hawks despite the protest of Steve Belkin. Belkin was the group’s representative to the NBA and had the ability to block trades. The settlement resulted in Steve Belkin leaving the group, although the exact terms of the settlement were not released to the public.
While one would think that the settlement of a lawsuit would come as a sort of “early Christmas present” for Thrashers fans, the collateral damage of the lawsuit would be jaw-dropping. The litigation was drawn out for so long largely because of a “flawed” contract drafted by a well-respected Atlanta law firm. As reported on Jan. 22, 2011 by the AJC.com, the Atlanta Spirit Group has since filed a $200 million lawsuit against the firm, accusing them of malpractice when the contracts they drafted made it “unable to sell or otherwise dispose of the Atlanta Thrashers.” It also caused Belkin’s buyout to drag on, which led to millions being spent on lawyer fees by the respective Spirit Group members, forcing the group to spend $130 million to keep the hockey franchise afloat.
Since the NHL lockout in 2004-05, the Thrashers average attendance has steadily declined, peaking at 16,240 in 2006-07 (the year of their lone playoff appearance) and slipping to this year’s current average attendance figure, 13,036. The team’s early struggles definitely did not help endear themselves to the fans in a market that is generally regarded as non-traditional in regards to ice hockey. In Atlanta, hockey falls somewhere well behind baseball, football (especially NCAA) and NASCAR on their list of past times.
Currently, ASG and the NHL are attempting to find a local buyer willing to take the team from the group (or buy the Thrashers, Hawks and Phillips Arena entirely) and keep them in town. Atlanta Spirit co-owner Michael Gearon came out in mid-February and said that the group would be unable to handle any more losses and would be forced to sell the team to an outside buyer if a new investor doesn’t come forward soon. Currently, there are three potential local investors reportedly being investigated, but nothing has been confirmed and no deals have been officially announced yet. It is possible that if a deal is finally struck in Glendale, then True North would simply focus on Atlanta and make an offer to buy the Thrashers instead. If we’re to believe the rumours, they’ve already made an offer and the Thrashers are there as a back-up plan in case the Coyotes deal is saved.
Following this line of reasoning, one could speculate that this is the reason why Gary Bettman and the NHL board of governors are doing their damnedest to keep the Coyotes in their current market. At the moment, there are two NHL franchises in a state of extreme distress, on the verge of relocation, with only one prepared market ready to take on an NHL franchise.
That would be us.