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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