Thursday, May 07, 2009

Deja vu

You might have heard about the attempt by the founder of the company that makes Blackberrys, Jim Balsillie, to scoop up the Phoenix Coyotes out of bankruptcy and move them to Southern Ontario, probably Hamilton. As I understand it, he doesn't want to pay any territorial rights fees to the Maple Leafs as part of the transaction.

I'm not so sure the mixing of hockey and desert was ever a great idea, but the thought of putting a team in Southern Ontario brought back a memory.

In the early 1990's, the NHL was in the midst of making expansion plans. The league was taking bids, and Hamilton -- funded by Ron Joyce of Tim Hortons -- was very interested. I was working for the Sabres then, and let me assure you that the top executives of the team took this threat very seriously.

While Hamilton is exactly 50 miles away from Buffalo, and thus would be in line for territorial rights fees too, the Sabres back then wanted no part of a franchise in Hamilton. Buffalo wasn't selling out the building every night back then, and any development that had the potential to take fans away from the Sabres was not good news.

Here's the catch, though: The Sabres didn't want to do anything in public to offend those Southern Ontario fans. So, how did the franchise try to squash the expansion effort without turning off its customers?

Actually, it wasn't difficult. The NHL asked for something like $50 million as a fee to get in the league -- $25 million immediately and $25 million not too far down the road. The Hamilton group thought that was ridiculous, and asked for different terms.

Ottawa and Tampa Bay, meanwhile, said those terms were fine. In fact, I believe they were the only applicants who approved the conditions. Therefore, the Sabres and the rest of the NHL threw up their hands with glee and accepted those two cities. They added a statement that said expansion into any other Canadian city was not expected.

Here's the catch. Phil Esposito said later that his group in Tampa Bay actually had absolutely no plans to fulfill the initial terms of the franchise award. He basically thought that once the NHL let Tampa Bay in, it would not be able to throw the city out of the league for being a little late with its payment. He was right. The Lightning and the Senators both had severe financial problems in their early years, and they struggled on the ice for several years.

I'm not privy to conversations in the Sabres offices today, but I'll bet they are waiting for word of the bankruptcy hearing with great interest today.

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