Hamilton Spectator
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Let the Leafs run Copps?
The talk around southern Ontario is that MLSE could become the new HECFI
By Steve Milton
The Hamilton Spectator
More articles by this columnist
(Jun 19, 2007)
Several times over the past few years, this corner has laughingly suggested that the way for Hamilton to land an NHL team is to let the Toronto Maple Leafs run Copps Coliseum.
But is it still such a big fat joke?
It seems far-fetched but such an agreement could work, from a business perspective, for both sides.
And there have been minor rumblings within the southern Ontario entertainment industry that Jim Balsillie has made exploratory contact with Maple Leaf Sports and Entertainment Limited about that very possibility.
Balsillie has an agreement with the city to lease Copps Coliseum -- plus Hamilton Place and Hamilton Convention Centre -- in case he can move an NHL team here. At this point that team would be the Nashville Predators, should the team be able to escape its lease in Tennessee. The co-CEO of Waterloo's Research in Motion has a non-binding agreement to purchase the Preds from current owner Craig Leipold.
MLSE runs the Toronto Maple Leafs, but over the past five years the biggest growth segment, and perhaps the most lucrative arm, of their company has been the operation of arenas.
Besides the Air Canada Centre, which they own, MLSE runs Ricoh Coliseum and BMO Field (both on the Canadian National Exhibition grounds), plus the new arena in Oshawa. The company will also operate the new practice arena and training complex scheduled to be built near the west-end Lakeshore Arena, where the Leafs regularly practice. And this doesn't even include those downtown condos.
A management contract for the HECFI facilities would give the Leafs some percentage of the action in seven of the larger major entertainment venues in the Golden Horseshoe.
Balsillie's lawyer, Richard Rodier, did not return calls yesterday and a spokesman for MLSE wouldn't comment on the matter.
"At this point, any discussion about the Predators is premature and hypothetical in nature," said MLSE vice-president John Lashway. "We don't comment on hypothetical matters."
MLSE feels the same way about another local team that an arachnophobe feels about spiders. And the company's collective mood certainly hasn't improved with Balsillie's season ticket drive in Hamilton: apparently going well past the 12,000 mark yesterday, and with corporate box sales cut off at 80.
But, if a relocation of the Preds -- or, failing that, another faltering NHL franchise -- to southern Ontario begins to appear inevitable, MLSE would have to look to extract as much as they could from a new team. They are, and must be, a bottom-line company.
By the NHL constitution any team relocating within 80 kilometres of the Leafs' home would be required to pay a negotiated indemnification. Would MLSE rather have a large lump sum payment and nothing else, or a smaller upfront amount plus the yearly guaranteed income that would come with a management contract?
And don't count Leafs-TV out of the overall mix. The MLSE-owned digital channel could also be given preference in bidding for the broadcast rights of a team here. For years, the broadcast rights for the New Jersey Devils and New York Islanders were held by the Rangers-owned MSG network.
So, the Leafs could conceivably make money -- and lots of it, year after year -- off another local team.
On the other side of the table, if Balsillie were to exercise his right to the HECFI buildings, he'd need to organize an arena management team or hire an already-existing specialist. If it made business sense, why not farm that part of it out, especially if it would lower MLSE's resistance and become a yearly cost of doing business instead of a major capital cost?
Although "material" ownership by one owner of another NHL team is prohibited by the league, such subcontracting cross-pollination is not. Nor is it unprecedented. The parent company of the Philadelphia Flyers had the operation contracts of the Islanders' and Penguins' rinks, among others.
Currently, Anschutz Entertainment Group, whose president is also governor of the Los Angeles Kings, has the contract to manage the Sprint Center in Kansas City, which is seeking either an established NHL team or an expansion franchise. AEG is also part of one of the seven groups which have submitted a bid to build a downtown arena in Las Vegas. Jerry Bruckheimer, who is throwing heavy money at the NHL for a Vegas franchise, is apparently close to AEG.
As MLSE has stated, it's all speculation and none of this means the Leafs would actually end up managing Copps Coliseum (including, presumably, a cut of concessions) should an NHL team land here.
But it does suggest that the idea isn't quite the stand-up comedy routine it once was.
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