The Numbers Game

Ken MacQueen February 5 2001

The Numbers Game

Ken MacQueen February 5 2001

The Numbers Game

Ken MacQueen

It’s a quiet Friday morning at General Motors Place and Vancouver Canucks president Brian Burke, dressed like Joe Canadian in flannel shirt and denim jeans, walks down a corridor to the fringe of the playing surface. The ice is buried today under the hardwood of a basketball court, changing entirely the tone and character of the building. The Canucks are on a road trip, and their imprint here grows alarmingly faint. Their dressing room stands empty. The advertising shifts to reflect tonight’s confrontation between the Vancouver Grizzlies and the Miami Heat. The cold, hard sounds of hockey are replaced by the rich thump of basketballs and the squeal of Volkswagen-sized footwear as the Heat grinds through a pregame practice. For the past hour in his office,

Burke has delivered a desk-thumping warning about the precarious state of many of Canada’s six NHL teams.

Here, watching the Heat, the point is taken: this is what a hockey team looks like when it’s gone.

The pending sale of Montreal’s win-challenged Canadiens underscores the shaky state of Canada’s Surviving Six franchises in a 30-team, Yankee-dollar-dominated NHL.

“Every time the Canadian dollar moves a penny, it costs the Ottawa Senators $280,000 U.S.,” says Roy Mlakar, the Senators’ president. Only the Toronto Maple Leafs, with a huge population base and a fat roster of corporate support, have a claim to financial health. Senators majority owner Rod Bryden is shopping for a buyer to take some or all of the financial load. The locally owned Calgary Flames and Edmonton Oilers lead a hand-to-mouth existence. The Vancouver Canucks, spared by the deep pockets of their owner, Seattle businessman John E. McCaw Jr., continue to add to losses of almost $140 million since moving into GM Place in 1995. The Quebec Nordiques relocated to Denver in 1995. Winnipeg lost its Jets to Phoenix a year later. Who’s next? Smallmarket teams in Alberta and Ottawa are vulnerable, observers say. An NHL position paper warned 15 months ago that without relief from currency and taxation differentials, “at least some of the Canadian clubs in the very near term will find it impossible to continue to operate in Canada.”

Current combined property and business taxes for NHL arenas, except where noted

Montreal

Toronto

Vancouver

Ottawa

Calgary

Edmonton*

Boston*

Colorado*

At least 14 of 24 U.S. franchises pay no

local taxes at all

$11,000,000

10,000,000

2,400,000

900,000

534,700

351,000

730,000

50,000

*1999

A year ago, John Manley, then industry minister, announced the government would buy into a subsidy if the NHL, provinces and municipalities also contributed—and if the league moved in the 2004 round of player negotiations to share revenues and cap salaries. Manley bailed out of the bailout just three days later, after an outcry over tax breaks to millionaire players and team owners. “It was a very predictable response,” says a still-frustrated Bill Daly, executive vice-president of the NHL and its chief legal officer. Daly wishes all parties had done a better job of selling the public on the economic and cultural contribution of the teams to Canada. Meantime, over the past few years, the NHL has poured tens of millions of dollars into Canadian team-assistance plans, and each team pleaded for breaks from local governments. After years of appeals, the Corel Centre in Ottawa got its municipal taxes reassessed from $4.1 million to less than $ 1 million.

The*NHL makes the case for assistance on several fronts. It cites a 1994 study showing the Alberta teams contributed $178 million to the local and provincial economies. It notes that the weak Canadian dollar puts each club at a $ 10-million to $ 15million disadvantage against U.S. teams every season. The league’s greatest frustration, however, is government refusal to share sports lottery revenues. The NHL estimates betting on hockey raised Canadian lottery revenues of $170 million in 1997. Daly says the league wants to work with governments to create a new hockey lottery, or to strike an agreement allowing existing lotteries to use NHL logos. Puck-shy Liberals aren’t biting. “There’s no way we’ll do something about the lottery,” federal secretary of state for amateur sport Denis Coderre said in midJanuary. “And the tax incentives, forget it.”

Meanwhile, rumours abound that the legendary rivalry between Edmonton and Calgary may end with one team moving south. “That’s an eventuality I wouldn’t even want to contemplate,” says Ron Bremner, president of the Flames. The Canucks’ Burke wants to fight the lottery issue in court if a brokered deal isn’t reached. “We’ve lost two teams,” he warns. “Wake up, we’re going to lose more.” ED