The most expensive game on earth

When it comes to extracting money from local governments, the NHL has it down to a science

What is it about the NHL that makes local politicians so desperate for its approval? Whatever it is, Gary Bettman, Pierre-Karl Péladeau, and Matthew Hulsizer have managed to parlay that desperation into cheap, low-risk contracts with local governments that hold the promise of hundreds of millions in assets in return. Of the three, Bettman’s act may be the most impressive, if only because he’s performing it in two cities at once. But it’s hard to neglect just how well Péladeau has played his hand in Quebec City.

Consider where Péladeau now stands on the Nordiques file: the municipal and provincial governments in Quebec City have now formally promised to build an NHL rink in the provincial capital using public money. All the while, these same governments that are shelling out hundreds of millions to give this hypothetical franchise a home seem only tangentially interested in actually acquiring a team. It’s easy to see why: it wouldn’t be theirs anyway. The team would belong to Péladeau.

Péladeau has managed to become the presumptive owner of the Nordiques by committing next to nothing in the way of actual funds. In fact, it was only after much outrage over Ottawa’s possible involvement that Péladeau even started to float the idea of investing “tens of millions” to gain control of an 18,000-seat rink otherwise built with taxpayer dollars. Péladeau’s cheapskate instincts proved wise. In the end, he barely had to pay anything at all. Quebec City announced this week it had sold operational control as well as the name of the rink to Péladeau for $63.5-million over 25 years, plus $5-million a year and 10 per cent of net profits. (That’s assuming the Nordiques come back to Quebec City—Péladeau would pay considerably less if they don’t.)

Assuming the arena turns a modest $1.1-million annual profit (an amount the feasability study considered optimistic), Péladeau will have forked over a total of $141.25-million over those 25 years. The city and province, by contrast, will have spent $400-million to build the arena, plus  $4.5-million a year in maintenance, for a total of $512.5-million. And that’s not including financing costs (a $400,000,000 mortgage amortized over 25 years at a very modest interest rate of 2 per cent would incur about $110-million in interest before it’s paid off) and there’s no rebate for the city if the Nordiques never make it back.

Meantime, the city of Glendale, Arizona, home of the money-hemorrhaging Phoenix Coyotes, fights for the right to pay Matthew Hulsizer nearly $200-million to buy the team for $170-million. This follows the city’s handover of $25-million to cover the team’s losses for this year. Two years ago, Jim Balsillie famously offered $242.5-million for the Coyotes and had a willing seller in Jerry Moyes. But that deal never happened. Or rather, it wasn’t allowed to happen. The NHL gained control of the team after it won a hard-fought legal battle to block its sale to Balsillie. The league thinks Balsillie is a bit of a jerk, you see.

To complete the circle, there are now credible rumours the NHL is indeed considering adding a seventh team in Canada—not in Quebec City, mind you, but in Winnipeg. And it just so happens that while these very rumours circulate, Bettman has taken to reminding everyone he can’t say with any certainty whatsoever there will ever again be an NHL team in either city. (Remember, Las Vegas and Kansas City are apparently very keen.)

So until he actually has to do anything, things look pretty good from Bettman’s perspective. He’s got two cities salivating at the thought of being a back-up plan for the Phoenix Coyotes or the Atlanta Thrashers or the Florida Panthers or some other half-baked and perpetually moribund franchise. All the while, he promises these cities nothing in exchange for their hundreds of millions in expenditures.

It almost makes you wonder why the Nordiques or the Jets ever left the league in the first place.




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The most expensive game on earth

  1. To paraphrase Jean Drapeau, "an arena in Quebec City can no more lose money than a man can have a baby".

  2. Dear Canadians – Can you please invade Arizona and make us a Canadian colony? Here in Arizona our central government sues us because we want illegal aliens to go home or to California or someplace. The president says we are his enemy, and he wants to punish us. We are tired of being punished all of the time.

    Canadians will get a hockey team for free as compensation for your gracious conquest Arizona. You may billet the liberators and their families at any of dozens of luxury resorts. We will provide weapons, golf clubs, tee times, and complimentary beverages. Also, See the FAQ for Canadians regarding colonization at http://www.disunderstand.com . Thank you in advance for attacking us.

    • It was my understanding that the colonization had already begun. Almost everybody I know up here over the age of 65 has bought a condo in the Phoenix area, it's ridiculous! But I liked your site nonetheless.

    • Throw in season tickets in perpetuity for the Diamondbacks and you've got a deal, Duke!!!

      Oh … and you'll have to swear allegiance to Her Majesty …

      • We will be ideal subjects since we are sufficiently beaten down to obey her most frivolous commands. We have a letter to the Queen posted at http://www.disunderstand.com , but we have not heard from her for some reason.

        • That's because her name is actually Camilla. LOL

        • You likely have not heard back because there has not been any such person as "The Queen of England" in over 300 years. You should be addressing your efforts to the Queen of Canada.

          Other than that, everything seems to be in order.

    • I hear Pima County is separating…live anywhere near there? LOL

    • Duke, it would be easier for you to secede than for us to annex. The glory days of burning down the White House are kinda long over.

      • There are alternatives. We have the right to self-determination, and have determined to be Canadians. The presence of so many Canadian nationals in Arizona obligates Harper to bring the issue before the UN. The United States then would be forced to bomb itself, even though areas like California are no longer target rich. After the UN victory, Arizona would become a protectorate of Canada. It's like hockey .. Arizona is defeated and no Canadians are hurt.

        Or, we could surrender now.

        • Duke, the Turks & Caicos were desperate for something similar, and we balked at the notion of colonization. I suspect your proposal will be just a wee bit more complicated. But thanks for your interest. How's your French?

          • Vous pouvez jouer au golf toute l'année en Arizona.

          • But will Arizona petition to boot out Northern Ontario at the Brier? Looks like negotiations are getting pretty serious, eh?

          • Sadly, we cannot. We support tradition, and we are envious of Canadian rules. Currently, our rules allow full contact between teams. It is more fun to watch than to participate. And our Sonoran Desert bonspiel lacks sponsors since the nearest Tim Hortons is in Indiana. Clearly, we need help assimilating … but we prefer you send hockey players to rule us.

        • Well, Sir Duke, I think the only weakness in your plan is the appeal to the United Nations – especially if you're thinking of invoking that Duty to Protect nonsense. If they can't figure out how it applies to Libya, I think 'you people' in Arizona should move to Plan B. Now, if you're serious about joining Canada, you'll have to surrender your weapons.

  3. Why wouldn't Quebec City just pony up and own the franchise like with Green Bay?

    It's crazy, sure, but way less crazy than giving hundreds of millions of dollars to an combative billionaire who might, or might not, act in the city's best interests over the long term. Also, dividing ownership of the arena from the club is a classic suckers game, and this plan fixes that.

  4. Kansas City [is] apparently very keen.

    Kansas City is beyond keen – they're in the exact same situation QC wants to put itself in: brand new Basketball/Hockey building (that's apparently an architectural wonder), no major league tenant to speak of. They're just waiting for someone to step up and move a team. If there's someone there willing to roll the dice, I'd be shocked if they didn't get a franchise out of the NHL (if teams move at all), LONG before Quebec does.

    • The question becomes, what owner is going to buy a team and move them to Kansas City? That is one advantage that Quebec has – an owner!

  5. This is the same man that will use Sun TV to bash social programs, unions, and all political parties not led by Stephen Harper. And yet, I bet the reliable far right cons on here will see no ideological conflict whatsoever.

    Iggy, don’t forget to run a candidate in Central Nova.

    • Knowing Iggy, he'll probably forget.

      You sure love to oppose freedom of speech; you're not even on-topic.

  6. A sobering reminder – The departures from QC and the Peg had something to do with a 62-cent Canadian dollar and players being paid in US currency. That regrettable circumstance seems to have faded.

    • Players are still being paid in US currency. The league does not want teams what will fold whenever the currency drops.

  7. What is it about
    [insert just about any business here]
    that makes
    [insert just about any politician]
    so desperate for
    [showering other people's wealth at them]
    ?

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