Is this the End of the Thrashers?

Greetings Thrashers fans. It has been a long time since I posted here on BWA. I had not planned to return to active blogging again until June. (I took a leave of absence this season and finished up my Ph.D. It is nearly complete now save for a few procedural steps.) I wish that I was making a return to blogging by writing something about the potential of this team to compete next season, but the situation appears to be much more dire than that and I thought I should blog while there is still a team in Atlanta to write about.

For a long time I have been skeptical about relocation rumors because of a) naming rights issues b) the NHL's efforts to keep a team in Phoenix and c) the NHL's desire to cover major American markets for their new TV contract. But the situation took a dramatic turn for the worse lately. The City of Glendale agree to put up $25 million to keep the Coyotes in Phoenix for one more season to enable the sale of that team. Honestly I expected the Coyotes to be moved to Winnipeg as their sale process continued to drag out and the NHL owned the club.

With Phoenix off the table and a prospective buyer still working on a purchase there, Atlanta became the target for the prospective Winnipeg ownership group. For many years, the Thrashers could not have been sold because the owners were in litigation with each other over, however this lawsuit was thrown recently and a sale became legally possible. Given the losses the group has sustained a sale seemed quite probable.

Atlanta Spirit had intended to flip the Thrashers almost from their original purchase. They got the team for next to nothing in a sweetheart deal that a jury found to be improper. Several prospective owners have kicked the tires on this franchise in recent years. I myself was once interviewed by a firm doing due diligence for a potential buyer (they wanted to get the perspective of an attentive fan).

But now it appears that Atlanta Spirit is about to sell of the Hawks and the Arena to one set of buyers and the Thrashers to Winnipeg (True North Sports). Information is coming from multiple sources that suggests that this is the case. The AJC has already reported that Atlanta Spirit has begun talks. But perhaps more revealing is a column by Kevin Allen of USA Today (who clearly has access to Don Waddell's phone number) where Allen makes this observation:

If you are an Atlanta fan, what should worry you is the fact that the Phoenix situation could affect the decision on the Thrashers. The NHL would like to recoup its losses from taking over the Coyotes. The City of Glendale has ponied up $25 million to give the league for last season and has agreed to give another $25 million to cover this season.

In other words, the NHL can only afford to save one sunbelt team and the City of Glendale just made saving the Coyotes cheaper. If the Thrashers were relocated it has been reported that the NHL would gain a $60 million transfer fee, so moving the Thrashers would actually put money into the NHL's treasury. The NHL has a long history of making short-sighted decisons to earn the owners a quick buck (Sportschannel TV deal, 1968 expansion, player pension mischief, etc.)

One bad sign is this recent column by Elliot Freidman. First let me note that Friedman has some of the best sources among NHL reporters and he is not prone to nationalistic chest thumping that we see with some Canadian columnists. He is a pretty sober and realistic writer. He suggests the NHL is concerned that the Spirit (who have already sued each other and are now suing their own lawyers) might try to something extreme to get out of owning the Thrashers:

The NHL believes it has a pretty ironclad agreement with Atlanta Spirit that will prevent Levenson and company from "walking away" from the team or declaring bankruptcy if there is no sale by next season. But, considering all of the goofiness from this ownership group over the past seven years, the league doesn't want to take the chance something ridiculous happens.

It sounds like Atlanta Spirit is telling the NHL "if you don't let us sell to Winnipeg we will declare the Thrashers bankrupt" which would give Bettman the headache of having to run two NHL teams in Atlanta and Phoenix.

But the real clincher in this column might be the news that neither the Glavine group nor the Steve Stotland group are gong to make a real bid without having some control over the Arena. If that is an accurate statement then I expect the franchise will be moved. If there is no buyer willing to keep the NHL in Atlanta the league is not going to take over and operate a second team. They will allow Winnipeg investors to make this problem go away (literally).

On the other hand, if there is a legitimate offer from any viable investor to buy and keep the team here, I would expect the NHL to work hard to make that happen. At the end of the day, pro sports franchises are very expensive toys owned by wealthy individuals (or corporations) and if nobody wants to buy this one and keep it here, it will be moved.

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