Lacing Up: Phoenix Out of the Ashes
In remembrance of the late Ashley Gallant, originator of “Lacing Up,” Matt Paul, Joshua Neal, and, at times, guest writers will hold a week-long email discussion, which will be published on FF Monday mornings. If you have any topics you would like to see us discuss, or if you would like to be a guest in our series, please let us know through the comments section below or on our Contact page, linked at the top of FF.
Joshua Neal: Well, Matt, it’s time again for another edition of “Lacing Up.” In recent weeks we’ve discussed many things Penguins. This week, I’d like to take a look at the news out of Phoenix that has come through. Forgive the over-the-top irony, but Phoenix’s hockey club, the Coyotes, seems to have risen from the ashes from an ownership/business standpoint. After years of being owned (some would even say subsidized) by the league, Greg Jamison – a hockey man who formerly ran executive operations with the San Jose Sharks – has a clear path to purchasing the Coyotes from the league, after the city council in Glendale (where the team’s arena resides) voted to continue their lease on the arena. Jamison, who knows a thing or two about running a team in a city where the hockey rink is the only place the fans will see ice, has been approved to purchase the team from the league. Matt, as I see it, there are three standpoints from which this news is interesting. First, how does this impact the Coyotes organization from an on-ice competition standpoint? Second, what does it mean for the league as a whole that the team in Phoenix will be staying in the city rather than folding up or relocating? Third, what relationship does a team like this and its viability hold with regard to the lockout? Pick your question to answer and we can roll forward from there.
Matt Paul: As much as I was hoping to see another Canadian team born at the hands of one of Gary Bettman’s warm-weather experimental franchises, I also have to look at this from a fan’s perspective and breathe a sigh of relief. I know all too well the roller coaster Coyotes fans have been on based on my experiences with the Penguins during their relocation posturing for a new arena. It was heart-wrenching for Penguins fans, and it certainly has been heart-wrenching for Coyotes fans — even if the number is smaller. Josh, I’ll start with your first question and we can proceed in order…
Interestingly, despite being propped by the NHL, the Coyotes have been pretty successful on the ice, thanks in large to their general manager, Don Maloney, and their coach, Dave Tippett. These two have worked miracles with a limited budget and limited talent. While their brand of hockey isn’t always the most exciting, the results can’t be refuted, and for that, these two need significant recognition. Now, I don’t profess to know much (read: anything) about Jamison, but my hope is that his pockets are semi-deep and he can afford to prop the team a little better than with previous owners (including the NHL). If that happens, you have to think that the Maloney/Tippett combination could produce a perennial powerhouse in the West. Now on to your second question: how will this impact the league? And, before you answer, Josh, take a minute to look at this in two ways: how keeping a team in Phoenix impacts the league fiscally, and how having a perennial contender impacts the league competitively.
Josh: Matt, you’re wise to point out these two different aspects from which to approach how Phoenix’s perpetuation of existence impacts the league. First, I will unabashedly say that there are certain markets which seem to struggle very much to support hockey. It’s not much of a surprise that many of these areas are out west and down south where the weather is much warmer and hockey isn’t able to be played in the back yard at any time of year. Also, the demographic for fans is much different, with the West being much more spread out physically than the East. There are many fewer “built-in” rivalries. For us, as Penguins fans, we can conceivably go to any Atlantic Division game at the visiting arena with relatively little travel time. Phoenix’s division “rivals” are Los Angeles, Dallas, San Jose, and Anaheim. Just physically so far from any other NHL venues that the team has to itself become the attraction. The impact on the league is that the divisions and conferences remain of neat, equal sizes. From a business standpoint, Phoenix is still some steps (which may be inside or outside of their control) from becoming fully financially viable and independent from the league. The shift to new ownership is certainly a step in the right direction. But, as we’ll get to, they may still rely on some revenue sharing for some time.
But, in some ways, they have become an attraction competitively. The Coyotes have, as you’ve mentioned, become a competitive team despite their small budget and revenue stream. They won the Pacific Division’s regular season title last year – the same division that produced the Cup Champion LA Kings. Phoenix made the Western Conference Finals last year, saw some stellar play from new arrival goaltender Mike Smith, and some great young talent including defensemen Oliver Ekman-Larsson and Keith Yandle. This is all capped off by a competitive decision based upon the financial one, the return of captain Shane Doan, who has been with the team since it relocated to Phoenix. The impact on the league from a competitive standpoint is a very good one. This is a great young team, and whether some may complain about their close-to-the-cuff style, they play a style that seems to be becoming the rule rather than what used to be the exception to it. Moving on, Matt, to the ugly question here… Does this kind of business-end decision have any direct link to core economic issues causing/prolonging the lockout? Or is this all too coincidental?
Matt: Absolutely. Listen, when a league props a franchise for any amount of time, issues are present. If the economics of the NHL were solid in all 30 markets — or even most — the sale of the Coyotes would have taken months, not years. But they’re not, and the result is a team that has been owned by the league, something that easily could be perceived as a conflict of interest on many fronts. That said, with a new owner — one who is invested emotionally and financially — the Coyotes just might dig their way out of a financial hole and become more than simply “viable.”
Josh, I’m not one for conspiracy theories, but as I typed the above paragraph, a thought struck my mind: as Bettman fought to keep the Coyotes in Phoenix at the expense of the league, might he have been setting the stage to demonstrate the dire economics of the NHL? Think about it. What better way to prove to the players that the league’s owners aren’t making money than to portray a propped up, damaged franchise to the players? Finding an owner to move the franchise to Canada would have been a cinch. And, while Bettman is a stubborn man who hates to admit a mistake (such as relocating/expanding into warm weather climates), it’s difficult to ignore the fiscal statement being made by funding the Coyotes.
Josh: You’re spot on, here, Matt. I think Bettman thinks that wide appeal is better than deep appeal. That’s why we’ve got NHL hockey in Phoenix and San Jose, and not in Hamilton or Quebec City. Bettman could arguably make a more profitable league by admitting that the advent of warm-weather franchises was a mistake and relocating them to hockey “hotbeds,” but I think that Bettman rather than taking the “easy way out” and making the league a cash cow wants to leave a legacy by expanding hockey into the markets where it hasn’t been tested out yet. It can be perceived as arrogance or brilliance from him. Perhaps Phoenix and other franchises in small-market cities will continue to become more competitive, which would lead you to believe would generate more fans and more revenue. However, the inevitable fact is that these franchises need help, and to different extents. Nashville and Phoenix are two teams that are incredibly similar. Nashville may be a few years ahead of Phoenix, and I think that perhaps simple geographics are to blame – there are lots of teams much closer to Nashville and it doesn’t hurt to be in Chicago and Detroit’s division. However, I think that Bettman’s desire to gain this wide appeal first and deeper appeal second is hindered by the fact that the league’s cash cow franchises are becoming impatient with subsidizing the less profitable ones. Teams like the Toronto Maple Leafs, New York Rangers, and Boston Bruins will never struggle financially because of the sizes of their cities, the established rivalries, and the large television markets. The Leafs haven’t even been truly competitive for years and they’re one of the league’s most profitable franchises!
But I digress. Matt, to answer your question, I don’t think it’s all that far fetched to believe that Bettman has used the Coyotes as an example of the struggle to turn a profit in the league. He’s a smart guy, too, so I think it’s less than coincidental that he picked one of the most difficult hockey (and, for that matter, any sport) markets to make that example. However, I think that this has become a zero-sum game, because Bettman has aligned himself with the owners, who while as a whole are more equipped for a lockout than the players, are differently equipped as owners to revive or rejuvenate hockey markets. That is to say, that while a city like Boston or Toronto that is “driving” the lockout in many ways won’t have nearly the trouble filling its stands when hockey resumes as Mr. Jamison in Phoenix will. And that’s the unfortunate nature of the situation. Maybe that’s why he got them for a discount? I kid. Anyway, Matt, since you or I won’t be buying franchises anytime within the forseeable future, is there anything you’d like to say before we wrap up another edition of “Lacing Up?”
Matt: Josh, as a fan of the sport capable of relating to other fans, it gives me pleasure knowing that the Arizona fanbase won’t have to suffer the emotional pain of watching their favorite team migrate to another city. That said, I just can’t help but think, “how stupid.” The NHL is crying poor, and what does it do? It hangs on to the coattails of financially unstable franchises in cities that just don’t make much sense for our sport. As you said, maybe Bettman will look like a genius when this is all said and done. But to me, and many others, he’s looking like a stubborn egomaniac who would rather see the entire league suffer (lockout) than admit a mistake and see the league prosper (relocate some suffocating franchises).
But for my last words before an exciting “Lacing Up” for me Monday morning — the return of Mike Wilson and his hatred — I want to end on a positive note. Hockey is staying in Phoenix, and that’s a good thing for all who love hockey in that area of our country. I hope Bettman’s plan is successful and the team thrives under the new ownership. Let a new era begin!