I started watching hockey when I lived in Florida of all places.

All in all, I think Hamilton is a second-rate choice (probably chosen because RIM headquarters is in nearby Kitchener). IMO the Coyotes should move back to Winterpeg and rename themselves the Jets. For one thing, losing a team from the Western Conference would be a blow to game scheduling.

The NHL currently employs a salary floor: the total player payroll for each NHL team must exceed a certain amount. The salary floor is a percentage of league revenues.

A Hamilton franchise, such as the one Balsillie wants, would be a very high revenue franchise. Furthermore, those revenues would arrive in Canadian dollars, which have strengthened considerably over the years against the American dollar.

This means that this one Canadian franchise in Hamilton would likely generate enough revenue (especially if it replaced a loser like Phoenix) to raise everybody else’s salary floor, despite everybody else’s team revenues dropping!

ESPN covering this topic

The primary reason was simply the over-expansion of the league. Bettman and the owners saw an opportunity to extract large franchise fees from prospective new owners and fancy-schmancy new arenas from city and state taxpayers. It didn’t matter to them that these clubs were opening in markets that had little interest in hockey or little ability to support a club (Miami, Tampa, Atlanta, Nashville, Anaheim plus the movements of Winnipeg to Phoenix and Hartford to Raleigh…some others weren’t so bad, such as the movement of Minnesota to Dallas and Quebec to Denver, and some of those mentioned have been mixed, such as Raleigh and Anaheim). This, of course, resulted in a dilution of talent (and therefore an inferior product) and the creation of money-losers.

Other problems aren’t really related to the business end. Teams, especially the previously-mentioned New Jersey Devils, became successful by playing a careful, very defensive style of hockey that limited offensive opportunities. Casual fans pay to see goal scorers, not a bogged-down neutral zone full of guys clutching and grabbing at one another (and certainly not “fighting”, which generally results in two men hugging each other before they fall down on the ice*). Mario Lemieux famously referred to the NHL as a “garage league” when expressing his frustration over the predominant style of play and it was partially blamed for his first retirement.

The NHL lost the 04-05 season to a lockout as ownership decided player costs were becoming too high. The resulting collective bargaining agreement was much more friendly to team owners. The NHL has also instituted, over time, a number of rule changes designed to open up a more offensive game (such as eliminating the two-line pass and limiting the ability of goaltenders to play the puck). Since the lockout, NHL revenues have been growing. It is likely, however, that this year revenues will drop, but, you know, everybody’s are.

The NHL probably still has too many teams, and contraction probably is the best option. However, that would be an even larger admittance of failure than relocating a franchise. Jim Balsillie also attempted to purchase the Pittsburgh Penguins in order to relocate them to Hamilton, and was met with stark resistance from the NHL. When the Penguins threatened to move to Kansas City or Las Vegas and the NHL joined in on pressuring the city and state government, Pittsburgh and Pennsylvania finally blinked and caved on building an arena (Kansas City already has one that they been trying to bring a team to for years). The Penguins later admitted that the Kansas City/Las Vegas scenario was basically a bluff and that the team was never likely to actually move (just how true that is is, of course, speculation).

Phoenix should probably be folded, and failing that certainly ought to be moved. One amazing thing about the southern Ontario market is how hockey-crazy it is. The Toronto Maple Leafs have struggled for years, yet a Maple Leafs ticket is probably the hardest (and most expensive) to get in the entire league. And as mentioned, Balsillie already has plenty of people lined up for season tickets for a Hamilton franchise. A second Toronto-area franchise would be an easy cash cow, and it’s puzzling that the NHL won’t at least admit its Phoenix mistake and allow the franchise to be purchased by Balsillie and relocated.

*Off-topic: fighting, of course, is banned. Anybody who does it receives a five-minute major penalty. The league has attempted instituting a number of rules over the years to attempt to curtail fighting even further, such as requiring all jerseys to be tied down (and therefore non-removable in a fight) and the instigator rule (a player who blatantly instigates a fight receives an extra two-minute minor penalty and a game misconduct [i.e. ejection from the game]). The presence of fighting in hockey is a subject of intense debate, and it’s far from settled that the casual fan buys a ticket to see fights. Given that revenues have been increasing and fighting has been decreasing, this is unlikely.

The Devils have won three Stanley Cups, and the Coyotes have never gone past the first round of the playoffs since leaving Winnipeg.

Hockey, like McDonalds, is a franchise business. In a franchise, ownership is divided is between a local businessman and a larger group of shareholders. In return for some amount of start up capital and a tried and true business model, the local businessman is obligated to abide by certain rules that the shareholders lay out, even if he believes these rules hurt his business.

I would like to know more about the owners of the Pheonix team and their contract with the NHL before I pass judgment on the situation.

Yes.

This some kind of trick question?

When Commissioner Bettman takes government money and advantage of government arenas, he is not fleecing anyone, unless there is something more sinister than underlies your statement about that aspect. Is Wal-Mart fleecing anyone by taking advantage of special tax breaks and land deals that they get when dealing with municipalities? I hope the answer is in the negative. And hockey is more popular than ever in Canada and places like Minnesota. Football and baseball are only more popular in America than ice hockey. And I agree that Commissioner Bettman is more like a politician, but the owners allow him to be there. They can remove him at any time. He is responsible towards the stakeholders even though he may not be one as he gets his money from them. His salary is commensurate with how well the league does. Bettman does not want to lose a hockey market forever while moving to an area that already likes hockey. Even though, I don’t agree with it I can see why he would want to keep it there. If you can keep teams long enough in an area(perhaps while temporarily losing money), it will grow a young fan base and develop the next generation to follow hockey and play it more in a certain metropolitan area. It happened on Long Island and in other U.S. markets. Even though I do agree moving to Hamilton would be better, having a team in a huge market like Phoenix isn’t a bad idea if you think you can get a significant piece of the sports market while also being profitable in the long run. Plus, thirty hockey franchises probably could be supported if they have the teams in the right places where hockey is already liked. Then, expansion may be more cautiously tried in the warmer parts of America. But, they have tried to aggressively expand with some false market signals sent their way. Many businesses failed with incorrect market signals as well. I would not single out Mr. Bettman and the N.H.L. for such criticism as they have plenty of company.