Friday roundup: Won’t anyone think of the sports franchise owners?!?

Coming up on the end of week four here, I think, and how is everyone doing? I remembered that today was Friday and I needed to do a news roundup, which was the first day in several that I remembered what day it was, so I feel like things are looking up! Except for the fact that large numbers of people gathering in close confines is looking like the main way this virus spreads, and that describes perfectly spectator sports and music and theater and many other things that make life worth living, so that’s not so great. And, of course, nearly 17,000 people have died and tens of thousands more deaths are expected, and that’s not counting all the people who are dying uncounted at home. Small victories may be victories, but they’re also small.

Eventually this will all be over, though, whatever “over” means, and it’s not too soon to start wondering about what the sports world will look like on the other side. Especially for sports journalists who are twiddling their thumbs right now and hoping that their employers still exist once the worst of this has passed:

Be well, stay safe, and see you Monday!

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17 comments on “Friday roundup: Won’t anyone think of the sports franchise owners?!?

  1. Keep in mind, Toronto is “Ground Zero” for hockey. I read the Toronto Star article and it is very possible that you could see Franchise Relocations ( without Belmont Park the Islanders would have been a prime candidate). For now, Arizona and Ottawa come to mind. Houston is a possibility, then there is always Quebec City for Ottawa.

    1. The Islanders were never a prime target for moving, with their lucrative television contract. With the uncertainty of having an arena packed with fans, these tv contracts are likely to be valued more over arena deals in the short term.

      1. I am a huge Islander fan ( lived less then a mile from the Coliseum), and trust me there have been relocation fears for over a Decade. I know just like in MLB ( and to a lesser extent NBA and NFL) the Commissioner does not like moving franchises ( mostly because open markets can be used to blackmail municipalities into new or renovated facilities), but sometimes the franchises situation is so hopeless it has to happen: ( see the NHL not letting the Coyotes get sold ( and moved to Winnipeg), but instead pushing the perspective Coyotes owner into buying the far worse Atlanta Thrashers and moving them to Winnipeg). With Vegas taken and Seattle coming in the league, there were not a lot of franchises that could be moved to a City that would want one ( such as Houston), so the Islanders were in danger. Thank God, they are going to be safe.

  2. This isn’t specifically about this article. Rather I just wanted to give a shout out to Neil. Thanks for giving us a form of … entertainment, just to have something intelligently written that is generally about sports.

    1. My hope is that with enough links to Sesame Street songs and Simpsons references, we’ll all get through this together.

  3. “Arizona Coyotes need a new arena even more badly now that nobody is going to arenas at all anymore.” lol – that’s ‘double-ungood’. Winston Smith

  4. The 2 doofi (Tom Kraznycki and Ronnie Lame) on n AM in the morning here in Tampa, heap praise upon the Glazers for donating $100k. Not even a gulp compared to how much they rake in from taxpayers.

  5. About an hour ago a public radio report suggested that South Korea had seen 95 allegedly cured/recovered CV19 patients test positive for a second time. At present they are saying that it may be a case of the original infection flaring up again rather than a second acquisition (which would kiss goodbye any tenuous hopes people have about previous infection providing immunity, as it does in some other viral infections), but it is very bad news regardless.

    Not sure I can wait until 2024 for the next XFL (XFL3?) season, but then… “maybe I won’t have to”…

    1. These cases have been reported for a couple of weeks now, though there are more and more as days pass. Could also be false negatives or false positives, either of which wouldn’t be great, but which would at least mean the virus is behaving normally for a coronavirus.

    1. The Cox article lost me completely when it asserted “Fewer teams could make the NHL stronger coming out of this crisis” without any explanation of how exactly that would work. (He suggested that the Thrashers “going out of business” ended up being good when they moved to Winnipeg, which suggests both that there are places on Earth unaffected by the coronavirus economic crash, and that he doesn’t really understand what “out of business” means.)

  6. You characterized the NHL article as “a dumb article about how several NHL teams could be forced to move thanks to coronavirus losses (where are they going to go, the Moon?).” I think that is not an accurate way to describe this article.

    My reading is it is a maddeningly written article about how some NHL teams might fold. While the writing isn’t great, the premise does seem possible. I suppose they could end up moving instead insofar as a club that is on the verge of folding could instead sell itself to some rich guy who is wants to be a sports owner more than he wants to make more money and said rich guy might want to put that team in a specific city. However, teams folding is stated as more likely.

    1. The value of a typical NHL franchise is around $650 million, based both on Forbes’ estimates and the price paid for the Seattle expansion franchise. There is zero chance any owner walks away from that much value even if it means taking a year or more of losses, especially when the league can always stop paying player salaries if this drags on into the fall.

      It’s certainly possible that an individual owner without deep pockets might not be able to cover losses that long, but if so, that’s what other rich guys are for.

      1. I think that’s the point. While info is kept scarce, $650M is probably not equal to the NPS of the future cash flow of a hockey team in Ottawa or Phoenix.

        Part of that value is revenue sharing, which doesn’t exist if clubs in Toronto, Montreal or Chicago aren’t making any revenue. The rest is simple scarcity of clubs. Rich people pay more for sports teams all the time (*cough* Steve Ballmer *cough*).

        Basically the market value of an asset can quickly go to zero when there are no real fundamentals under it. Just ask those banks with all those CDOs made up of subprime loans. At that point you are betting on rich people who live in Ottawa or those who want to fly to Ottawa in January. That’s not a big group, therefore raising the possibility of a club folding or selling to a rich person who is buying the club solely as a hobby rather than a business.

  7. Damien Cox has done some good work on the NHL for the Star. However, this one misses the mark.

    I think what he meant by “being stronger” is that the quality of play would improve with fewer teams. This is true of every sports league by default. There are only so many great players, and every time you reduce the number of teams you are eliminating the players “at the bottom”.

    Mr. Bettman is not going to allow any franchises to fail in the classic business sense. There will be no more bankruptcy auctions for NHL teams, no matter what. What Cox fails to mention is the league’s central slush fund… to be used at the commissioner’s discretion and as needed. Every league has one, whether they admit it or not.

    He’s right about Melnyk and about the Coyotes. Both franchises are bleeding cash fast. The Coyotes have been losing money every year since they moved to the desert. The problems in Ottawa are more recent and owner based (you can read about Melnyk’s business and financial problems on ‘his’ Wikipedia page if you like).

    What he misses is that even if those two teams do end up in a position to default, you can bet they will not be allowed to. If the league needs to take them over until they can find a new owner, then it will do so. It has the money and the will to make that happen.

    If the Senators do have to become the new Nordiques (which I don’t expect to happen… there are other rich guys in Ottawa or nearby who could buy them if the opportunity arose… they just would rather deal with the league than with the current owner) then it will be through the league office that this happens.

    Many believe Melnyk is only hanging on to cash in on the Seattle expansion fee distribution and then will try to sell. Again, it’s not like a used car… the league runs the process as much or more than the present owner does.

    In the case of the Coyotes… the league spent $170m to buy them back out of bankruptcy and then another $75m or so in losses operating them for two years before they offloaded to a private partner. Not counting legal fees…

    That franchise has already been (and continues to be… the ‘yotes are guaranteed full revenue sharing whether they meet the conditions all other teams need to meet or not) an expensive pipe dream for Bettman, so if it needs another $100m poured into the bottomless pit to keep the franchise afloat for another two years, I have no doubts that he and the BoG will make that happen as well.

    After all, he’s really just taxing Maple Leaf, Ranger, Canadiens and Black Hawks etc fans to do it. They don’t seem to care enough to stop paying.

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