SBD/Issue 169/Franchises

Jim Balsillie Says Nothing Regarding Relocation Of Predators

Incoming Predators Owner Does Little
To Assuage Relocation Fears
Research In Motion (RIM) co-CEO Jim Balsillie, who has agreed to buy the Predators from Craig Leipold for $220M, “did not ease fans’ concerns Thursday about the future of the franchise in Nashville,” according to John Glennon of the Nashville TENNESSEAN. But Leipold said, “I think he’s going to give it a chance. He’s going to be required to give it a chance. The NHL would not permit him just to pick up this team and move it without the NHL believing he did what he could to make it work here.” Glennon notes the NHL’s standard sale agreement “requires a new owner to keep a team in its current city for seven years, but that is contingent on the team’s having a lease.” The Predators could opt out of their lease after next season if certain paid attendance parameters are not met and if the city decides not to reimburse them for ticket shortcomings (Nashville TENNESSEAN, 5/25).

MONEY LOST: Leipold said that despite the league’s new revenue-sharing plan, the Predators had lost $27M over the last two seasons (Nashville TENNESSEAN, 5/25). In a letter to season-ticket holders, he wrote, “When the franchise began, I said we would run it as a business in order to be successful. ... We indicated that making a huge profit was not a top priority — but we certainly didn’t make plans to lose a significant amount either” (Predators).

SPONSOR SUPPORT: In Nashville, Chas Sisk reports “several major sponsors of the [Predators] said Thursday that they planned to step up efforts to promote the team to local businesses in a bid to keep” the club from moving. Sommet Group Managing Partner Brian Whitfield, whose company last week bought naming rights to the team’s arena, said, “I’ve already had some folks calling me who have ideas for supporting the team.” First Tennessee Bank President Mike Edwards said that he would also “promote the team to businesses.” A survey of 12 team sponsors found that, except for Whitfield, “all of the team’s sponsors were unaware that a sale of the Predators was in the offing” (Nashville TENNESSEAN, 5/25).

RELOCATION SITES: In Toronto, David Shoalts writes “even high-ranking NHL executives expect the Predators to be moved in two years after the out-clause” is exercised. A source close to NHL Commissioner Gary Bettman said that Sprint Center in K.C. “is the preferred location in the short term.” But the source said that a move to Canada “is not out of the question” (Toronto GLOBE & MAIL, 5/25). In Nashville, Paul Kuharsky examines potential relocation sites and notes Hamilton, Ontario, is 41 miles from Toronto, “so a team moving there would have to negotiate around complicated territorial issues” with the Maple Leafs. There is “rampant discussion” that Balsillie could build an arena in Waterloo, where RIM is located, Kitchener or Cambridge — which all have no territory issues (TENNESSEAN, 5/25). Kitchener Mayor Carl Zehr, who spoke with Balsillie yesterday, said, “If he chose to have it in Kitchener, we are prepared to assist in finding an appropriate site and doing what we can to make sure it gets here. He’s not at that stage yet” (FINANCIAL POST, 5/25). The Hockey News’ Ken Campbell: “I think their team is gone. You’ve got a Canadian owner who’s passionate about hockey and who has all but publicly said he wants to bring a team to Canada” (TENNESSEAN, 5/25).

HERE TODAY, GONE TOMORROW? In Nashville, David Climer writes Leipold “couldn’t have consummated the Predators’ sale at a worse time.” The current ticket sales push “is likely to go south.” The team already raised ticket prices, and it “cannot make deep inroads in the business community” (Nashville TENNESSEAN, 5/25).

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