Last week we mentioned that the recession appears to be hitting the NBA hard, with attendance down almost across the board and the league seemingly teetering towards a full-blown crisis. It’s no surprise then that if the NBA is hurting, then the NHL must really be suffering.
The GLOBE AND MAIL reports that the Phoenix Coyotes are hemorrhaging money at a rate of $25 to $35 million a year, and could be facing a sale or - even more ominously - possible bankruptcy. Owner Jerry Moyes has already tried to sell the team back to his former partner but was rebuffed. And a statement by an NHL official is hardly the equivalent of Jim Cramer screaming “BUY! BUY! BUY!” at you:
“I don’t know how they can sustain the losses,” one former league governor said. “The team loses so much money you can’t sell it. If I were offered the team for a dollar, I’d say no because you can’t fix it.”
Some of the problems are unique to Phoenix. Their arena is in Glendale, which is basically in the middle of nowhere and miles away from the area’s big money in Scottsdale and significantly hurts them in terms of corporate suites and boxes. In addition, in order to attract fans they are offering bargain basement ticket prices (29th out of 30 clubs). All of which means plenty of fans in the cheap seats but no one in the big ticket seats up front.
(And then there’s the fact that Phoenix really isn’t a hockey town. Ask anyone in the area and they’ll tell you that they are a complete afterthought to 99 percent of all sports fans.)
But the Coyotes are also being hurt by something that has a huge impact on a lot of NHL teams: the lack of significant TV revenue. While NBA teams can survive with poor attedance for some time thanks to their share of the TV contract, the NHL doesn’t have that piece of the pie to dole out. Essentially, it’s every person for themselves, and if you are struggling there isn’t much of a lifeline to use to pull yourself out of the spiral.