Tag: financial worries

Colorado Avalanche v Columbus Blue Jackets

Report: Blue Jackets lost $25 million last season, $80 million over six years


The NHL has been a bit busy lately with handling things with the Phoenix Coyotes and their fight to stay in Glendale as well as keeping an eye on things with the Atlanta Thrashers and their ownership boondoggle but those two teams aren’t the only ones with major problems.

Another recent expansion team that’s having money woes are the Columbus Blue Jackets. Generally when fans start thinking of expansion teams that have a hard time fitting in and making money, they turn to the Coyotes, Thrashers, and Florida Panthers but the Blue Jackets are a different kind of mess unto themselves. In their ten years in the league, they’ve made the playoffs just once getting swept out in the first round by rival Detroit in 2008.

With that history of not winning in a new place it shouldn’t be a big surprise that the Blue Jackets are still losing money and it’s only getting worse. According to NHL sources, Columbus lost $25 million last season, a $14 million increase in losses from the previous season. The team has lost a total of $80 million since the 2004-2005 lockout.

The Columbus Dispatch’s Aaron Portzline has some reasons why the team has bled money.

There are four main reasons for the sharp increase in losses: rising player salaries, plummeting attendance, a 25 percent cut in the Blue Jackets’ revenue sharing check, and the ongoing (endless?) lease agreement issues between the Blue Jackets and Nationwide Arena.

Sounds like a familiar recipe for a team to be relocated. In this case, the Blue Jackets are under no serious threat to be moved. Owner John P. McConnell is doing his part to try to keep things straight in Columbus. The one solution to try and fix things there though is simple: Win.

Columbus making the playoffs just once in team history with other seasons being mostly miserable ones with no hope, the shine is off the team for being something new and fun. Now it’s time for results and unfortunately after years of poor management and personnel decisions it takes time to get things fixed up.

Rick Nash is the team’s one marketable superstar and while there’s some solid talent otherwise in Jakub Voracek and Derick Brassard, there’s not a whole lot else going on here. That much has proven to be true considering where the Jackets finished in the standings. The losses are staggering for the franchise but yet the answer to fixing it all up seems so simple. As if teams didn’t need more motivation to figure out the best ways to put a winner on the ice, they could look at the how things have gone financially for Columbus and realize that it makes all the difference.

While the NHL is going to worry about how to get things right with the Coyotes and Thrashers first, they’ll have to keep a stray eye on what the Blue Jackets are doing. Having a franchise, a new one especially, hemorrhage money like that is not good for the league and it’s push into new markets.  It certainly doesn’t help make the case for future expansion easier to make.

Pay what’s owed: City of Glendale reportedly pays NHL $25 million for Coyotes losses this year

Jobing.com Arena

Say what you will about what’s going on with the Phoenix Coyotes and the City of Glendale but the one thing you can’t argue about is the ability of the City of Glendale to stand by their commitments to the NHL.

TSN’s Darren Dreger reports that the $25 million the city pledged to the NHL to help cover financial losses the team would incur this season in Glendale has been paid up to the NHL.

There’s not a lot to read out of this development other than Glendale can own up to their pledges of good faith. Of course, asking a city to hand out that much money to keep a team that continues to bleed money can be a bit of a sticking point for taxpayers in the City of Glendale if they were keeping up on all of these developments. I know I’d be concerned about these things if it was happening in my neighborhood, but I don’t so I’ll just take my opinion on this from the outside.

The City of Glendale had to make good on this though because that was all part of the deal, reneging on this deal wouldn’t exactly give the NHL proper motivation to want to help carve them out a deal somehow with Matthew Hulsizer while a potential buyer waits on the sidelines for the green light to cut a check to buy and move the team.

Things are long from over with this situation, but at least this is something that could be construed as good for things in Arizona in its own weird way.

After years of financial struggles, Predators have turned the corner with refinanced debt

Anaheim Ducks v Nashville Predators

A few years back when William “Boots” Del Biaggio rode into Nashville to play the role of “savior” of the Predators, he was hailed as a financial genius who would be able to give the franchise the financial stability in the front office they were looking for to help keep the team locked down in Music City. After all, they had just done the dance with BlackBerry guru Jim Balsillie and they were vulnerable.

Then it turned out that Del Biaggio didn’t actually have any money and turned a bad situation even worse by putting the Predators further into the hole. Craig Leipold and and a group of local investors swooped in to save the day and while the Predators have been stable for sometime since then, especially now that they’re consistently winning games, there was still that nagging cloud of debt thanks to Boots’ mismanagement. In order to buy the team, they had to buy up Boots’ shares first, this led to taking out a $75 million loan to help secure the team for themselves.

People in Nashville can breathe a bit easier now because the team’s ownership has refinanced that debt to help make it easier for them to pay it back and get the Predators onto solid financial ground. Nate Rau of The Tennessean has the update on how the Predators may finally be able to be called a financially stable franchise in the south.

The ownership group purchased the Del Biaggio shares in September and began seeking refinancing partners shortly thereafter. Morgan Joseph and Avondale Partners served as financial advisers for the team.

“We had a real problem with our balance sheet, which was cobbled together in an emergency fashion to save the team back in 2007,” [Predators chairman Tom] Cigarran said. “I’m not being critical. If we didn’t come up with the money to buy the team in a very short period of time, there wasn’t going to be a team.”

Cigarran said that with the refinancing out of the way, he would like to begin searching for new investors in the coming weeks. The hope is to find local investors, but Cigarran said the ownership group would look outside of the Nashville area, as well.

Hearing these details shows what a desperate time it was for the franchise and now that they’re clearing the path towards stability the Predators are becoming a shining example of how it takes patience to make things work in a new market in the NHL. This is the kind of success story some are hoping will become the example for those in Arizona and Atlanta can follow. For now though, hockey is alive and well in Nashville and now people can stop talking about how the Predators are a prime candidate for relocation.