Contrary to a published report, a deal to move the Atlanta Thrashers to Winnipeg was not completely done as of late Thursday night, but it had nothing to do with negotiations between the Atlanta Spirit ownership group and True North in Winnipeg.
According to a highly placed source with knowledge of the inner workings of NHL ownership, all sides can accurately say that a deal is not complete, despite the fact that all signs appear to the Atlanta Spirit LLC and True North reaching an agreement in principle to sell the team for $170 million.
What still has to be determined, according to a source, is how much of that purchase price goes to the Atlanta Spirit, a group that is hardly dealing from a position of strength when it comes to selling the team. It has been widely reported that the purchase price of the team is $110 million, with an additional $60 million going to the NHL in the form of a relocation fee.
Apparently, the Atlanta Spirit owner Bruce Levenson wants a bigger piece of the purchase price and is trying to get a portion of that $60 million from the NHL. It’s believed the league, meanwhile, not only wants the $60 million relocation fee, but a portion of the $110 million purchase price. In fact, there’s a possibility that the Atlanta Spirit might end up with only $80 million to $100 million of the purchase price. It should be noted that the relocation fee for the Thrashers seems to have come out of nowhere. There was no relocation fee when the Minnesota North Stars moved to Dallas in 1993, when the Quebec Nordiques moved to Colorado in 1995, when the Winnipeg Jets moved to Phoenix in 1996 and when the Hartford Whalers relocated to Raleigh, N.C., in 1997.
And the NHL is completely in the driver’s seat on this one. Levenson is a motivated seller, largely due to the fact that he has been losing $40 million a year on the Thrashers and is desperate to sell before he loses any more money. In reality, Levenson is faced with the prospect of taking what the NHL lets the Atlanta Spirit have or absorbing crushing losses for at least one more season.
Bettman is using his leverage in this situation to his full advantage, as he usually does. And anyone who thinks Bettman does not have the full backing of all the league’s owners is likely ignoring the fact that he has handled the Phoenix and Atlanta situations brilliantly.
Think about it. The NHL was faced with the reality that one of the two franchises was going to move to Winnipeg. So instead of ushering the sale of the Coyotes to Winnipeg, he instead told True North to remain patient. Then he set about getting another $25 million out of the city council in Glendale to offset the Coyotes losses for another season and will get at least $60 million from the sale of the Thrashers, which will more than cover the additional $15 million the Coyotes will likely lose this season, an amount the league must cover since it still owns the team.
In most sales, a relocation fee usually only applies when an existing team that is located geographically close to the new location has the potential to suffer financially by the move. But that certainly is not the case with Winnipeg, whose nearest NHL competitors are located 456 miles south (Minnesota), 750 miles west (Calgary) and 1,320 miles east (Ottawa).
So essentially a money grab by the NHL is being couched as a “relocation fee.” Is a perennial money loser worth $170 million? Certainly not located in Atlanta. But it is in Winnipeg, which is exactly where the Thrashers are headed.