Tom Benjamin’s NHL Blog

Searching for a Silver Lining

Alain Vigneault pretty much has to take this approach to the Canuck schedule this year: 

“I have analyzed this schedule quite thoroughly and obviously all schedules are challenging for all the teams, but this one here I like the fact that we have less time where we are playing four games in six nights. Last year we had 10 of them and I think this year we’re down to six. So that’s pretty good and our back-to-back games are down. In general, I think it’s a pretty fair schedule.”

What else can he say? He has to find a silver lining or two. He can’t say what he would surely like to say which might be something like ”Is the league screwing over the rookie GM by giving us the worst schedule I’ve ever seen? So much for the playoffs. My players have a built in excuse for poor performance.”

A silver lining? I liked the fact they get a brutal road trip right off the bat because I think teams do better on long trips early in the season when are healthy and well rested. Then I realized that the Canucks have so many brutal trips they had to have at least one early in the season. My silver lining turned to pewter. Here’s a breakdown:

1 seven game trip (7)
2 six game trips (12)
2 four game trips (8)
1 three game trip (3)
3 two game trips (6)
5 one game trips (5)

That’s an incredible 27 games in long road trips. Even that indicator - a fairly reliable measure of schedule difficulty - understates the problem. The Canucks also have what is in effect an eight trip because they play three on the road, fly home from Dallas to play Montreal, and then take off for four more games across Canada. The other four game trip has the Canucks flying from Vancouver to New York, to Minnesota, back to Pittsburgh and finally home.

The two game trips aren’t any bargain. Two of them are to California to play the Ducks and Kings. In other words, the Canucks get twice as many California trips as is necessary and none of them include games in Arizona or Colorado. The other two game trip is to the Southeast where the Canucks get back to back games against Nashville and Atlanta.

Vancouver should not have one game road trips unless it is Calgary or Edmonton. They do not need to finish their season by flying to Colorado and back. They do not need a flight to San Jose to play one game just before Christmas. They do not need an extra trip to California to play the Sharks just before the All Star break either. The two single game trips to Edmonton are the only easy trips on the schedule.

Vancouver fans know that their team is hurt by geography. We know a good schedule is impossible. But I don’t think it is too much to expect that the league would assure that the West Coast teams got the best schedule possible. All they have to do is fill in the Vancouver games first, giving them their best possible schedule. Then they schedule the California teams and the Alberta teams before allowing the computer to sort out the schedule for the rest of the league. The result would be a lot more fairness. The cost will be some whacky flights for some Eastern teams. (Too bad, I say.)

I suspect that we have exactly the opposite happening for understandable reasons. Travel costs are going to explode this year and Gary Bettman is trying to keep the outrageous increase in travel costs as small as possible. The NHL wants to minimize air travel and any schedule designed to minimize air travel across the league will screw Vancouver and the other travel disadvantaged teams.

This is a schedule that could put the Canucks in the hunt for John Tavares. Its a good thing that losing is unacceptable in Vancouver. If it were otherwise, I’d be worried.

Buying a Brooklyn Bridge

I don’t think we will learn a lot more about the NHL role in the Del Biaggio fiasco, but I have expected we would learn a lot more about the sale of the Nashville Predators and I have expected we would learn a lot more about the financial state of one of the NHL weak sisters. The Tennessean has published some documents that do exactly that, although with a caveat.

(The information comes from a package put together by Boots Del Biaggio. The package is designed to convince a “limited number of sophisticated prospective investors” to give Boots money for pieces of his slice of the pie. I assumed the numbers are correct and the forecasts are real, but the Del Biaggio opinions? Consider the source. Want to buy the Bettman - er, Brooklyn - Bridge?)

The Sale

First, the Nashville team sold for $176 MM, and not the announced $193 MM because there was a “purchase price adjustment” at some point. The group of Nashville investors were short $70 MM and Boots stepped in. He and his partner put up $30 MM (Del Biaggio apparently obtained his share of this money fraudulently) and Boots guaranteed - and was to pay the interest on - a $40 MM mortgage on the team.

We can see the problems the fiasco creates for David Freeman and his partners. They had to replace the gaurantee on the mortgage, they have to pay the interest costs on that mortgage, and they had to come up with $10 MM to cover Boot’s share of the arena deal.

The structure of the deal was designed to give Boots the chance to sell the opportunity to invest in the team as a win-win move. Under one scenario, the team succeeds in Nashville. If that happened, the Nashville group would probably buy out Boots (and any investors). Boots is out with a nice return. Under the other scenario, the Predators continue to bleed copious amounts of red ink. If that happened, Boots would probably get control of the team. It could be flipped or relocated.

I don’t think it would be quite as easy to get control of the team as Boots makes out because the Nashville investors would have other options. However, it does appear that those options are less than attractive. I think the key point is that anyone who gets the Del Biaggio shares coming out of the bankruptcy will have the same opportunity to acquire portability value.

The State of the Franchise

This really is the last chance for the Nashville market. We don’t know whether the best case scenario in the document really comes from the Nashville investors, but we do know that the future looks bleak.

The team turned revenues of only $48 MM in 2005-06 and $56 MM in 2006-07. Locally generated revenues are substantially less, and probably not enough to cover the team’s payroll. The team will have a negative cash flow for the next five years despite the fact that the new arena deal provides a taxpayer subsidy of more than $50 MM. (Yowza. I suppose the city has good reason to pony up, but I can’t imagine it. I wonder whether the arena revenue counts as HRR. If not, I’ll bet Paul Kelly isn’t happy about it.)

The worst part of this news is that six teams turned less ticket revenue in 2006-07 than Nashville. Are the Predators even the weakest of the weak sisters?

Postscript: I’d like to know whether every team is projecting a $15 MM expansion boost to revenues in 2010-11. Is this just a Nashville guess or is the plan on the drawing board?

Update: I was wrong about whether we would learn more about the NHL role in this mess. According to the Tennesean and one of Boots Del Biaggio’s potential investors, Gary Bettman has his fingers all over the deal. According to Doug Bergeron, Bettman told him the deal structure was his idea, and Boots told him the NHL did not really investigate him as a potential owner.

Bill Daly sort of denied the story. “With respect to Mr. Del Biaggio’s apparent claim that the League waived certain of our standard financial background checks, we do not believe that to be the case.”

We do not believe that to be the case? Don’t they know?

Gary’s Move

My thumb is down to NHL commissioner Gary Bettman for getting in touch with his “inner Mills Lane,” the boxing referee, and stepping between Oilers GM Kevin Lowe and Ducks GM Brian Burke who have been going at each other and talking trash. Well, why not let them go at it - its entertainment. They don’t like each other, fine, but when hockey needs all the publicity it can get, why should Bettman feel the need to say ’simmer down boys. You go to the blue corner and you go to the red.’ There’s no point in Bettman’s move - let the two go. They haven’t hurt the game, they just enlivened it - Michael Farber

I suppose Brian Burke agrees with Farber because he effectively ignored Bettman’s edict last week. After he said he would accept the Commissioner’s ruling, he poked Bettman in the eye with a stick by making several comments in response to Lowe. Then he formally charged Lowe with tampering. I think he’s probably technically correct on the tampering issue but it is still frivolous in the sense that Lowe was not in any way attempting to acquire Perry.

Bettman tells Brian to shut his yap and Brian not only keeps his gums flapping, but dumps a plate of bullshit onto Bettman’s plate. He has to make a ruling on the tampering charge. Does he find Lowe guilty because he broke the rules or does he exonerate him because he accidentally broke the rules during a hissy fit? Does he (do what I would do and) find a way to whack Burke for continuing the spat?

Over to you, Gary.

Notes on the Frenzy

Some random thoughts about the events of the past week:

1) I think I was most annoyed by the spate of media stories decrying the insanity about the dollars thrown around during the free agent sweepstakes. Don’t these reporters realize that teams have to spend the money? They don’t know that no matter what contracts are signed, the players will get exactly the same amount of money?

Sigh.

2) The second most annoying theme was Marian Hossa, selfless player leaving millions on the table to give himself the best chance to win a Cup. Hossa - like every other UFA - made what he thought was the best decision for Marian Hossa. The big money offers he turned down - Atlanta, Pittsburgh, Edmonton and reportedly, Minnesota - came from unattractive - to Hossa - teams. He’s chosen to wait until next year when a different group of teams will have the cap space to hire him long term. That’s fair enough. Its his choice. There is nothing to criticise in that, but it is also not a decision to be applauded. It is not a indication of character.

Players are making decisions based on the quality of the team, geography, and money. It is becoming obvious that for most players, the least important factor is the money. Some teams - the Rangers and Flyers come to mind - can use the UFA route to change their core overnight. Other teams can’t seem to attract free agents - Atlanta, Edmonton - no matter how much they pay.

3) The Wade Redden contract in New York raised more than a few eyebrows, but unless the drug rumours have real substance, I think its going to turn out well for the Rangers. I know Redden has struggled and had a terrible season last year, but I don’t think he has forgotten how to play. I don’t think it is a coincidence that his game fell apart when the Sens made it clear they wanted to unload him. It isn’t surprising that his heart really wasn’t there under those circumstances. If he snaps back I’d much rather have Redden’s contract than Campbell’s contract if I was managing a team.

The Sens will miss him and I think there is a real chance they will be out of the playoffs next year. Welcome to mediocrity, Ottawa fans.

4) I can only shake my head at the circus in Tampa Bay while sympathizing with Dan Boyle and Jay Feaster. Both men can take some consolation from the fact that what goes around comes around. The new ownership has made a huge splash, a splash that may have been required to hold fan interest in the market. Unfortunately for them, this type of approach to team building has never worked in the past and I don’t think it will work now.

The league and the NHLPA should do something about no trade clauses. It is obvious that some teams have no respect for them or their contract obligations. Redden, Sundin, McCabe, Boyle… it all looks so bush.

5) The Blue’s decision to offer Steve Bernier an RFA offer sheet shows just how petty John Davidson can be. What did he expect to get out of it? Does he really think that spiteful offers will prevent somebody else from making an offer to a Blue? So why do it?

6) I don’t think Jaromir Jagr is a truly impact player any more, but it isn’t good for the league if great European stars finish out their careers in the KHL. I’ve never been a big fan of Jagr but given a normal decline phase for a player of his quality his numbers would have put him in the legendary category.

We don’t have to like Jaromir to wish his NHL career had died a natural death. The league and the league’s fans should have had the opportunity to celebrate a great career when it ended. Instead we have a very unsatisfying legacy.

7) I don’t think the Canucks made a bad move when they offered Mats Sundin a raft of money. Swapping out Naslund and Morrison for Demitra and Sundin works for me. Unfortunately I think Sundin has soured on the business of the NHL. Loyalty doesn’t count for much these days. I think he is planning to pull a Niedermayer if he intends to come back at all. I’ll be pleasantly surprised if Sundin ends up in Vancouver.

This could be another unsatisfactory end to a great career.

Burke’s Ugly Side

Gary Bettman stepped in to put a stop to the squabble between Brian Burke and Kevin Lowe today, and Adam Proteau thinks that was a mistake:

What matters here is people are talking about hockey in July – and, most importantly, the next time the Ducks and Oilers play, there will be a huge buildup of hype and anticipation regarding what the next chapter of the dueling GMs will read like. In case you’ve completely lost the plot, hype and anticipation is what the NHL needs most these days. With the competition committee and changes to the game, the league has gone a ways toward improving its steak; now they need to improve the sizzle that has to go along with it.

This is exactly why Bettman was correct to put a stop to it. The league does not need this kind of hype. Its bogus, a phony war, very nearly smacking of the way upcoming wrestling matches are promoted.

Kevin Lowe is almost blameless in this mess. He was entirely blameless until he opened his big mouth last week. Calling Burke a moron is unprofessional. Its bush, just like Burke is taking a bush league approach to getting media attention in Anaheim.

First, the Dustin Penner contract offer didn’t change the salary structure. The new CBA eliminated the cheap second contract and changed the salary structure. End of story. Somebody was going to do what Lowe did. It was predictable. It was predicted. Burke is calling the soldier who fired the first bullet at Fort Sumter the cause of the Civil war.

Second, Burke is not a moron. He understands these things. He is beating this drum and firing the feud to get his name in the papers. Its a dishonest way to promote himself, to get media attention and to sell tickets. This is the ugly side of Brian Burke. He shouldn’t get away with it and I think he does get away with it because he is good copy. Because he does provide sizzle with the steak. Because most reporters think like Adam Proteau.

In a perfect world, Lowe could take the high road and the media would shred Burke for his argument and for the reason behind his behaviour. In an imperfect world, Lowe has to stay on the high road and simmer as the media chortles over Burke’s bluster and eggs him on. (Too bad for Kevin. The only enjoyable part of Burke’s schtick this time was watching Lowe squirm on the high road.)

Proteau doesn’t think Bettman should have intervened? I think he should have shut Burke up before Lowe exploded.

Quadruple Whammy

The Jackets are one of several clubs taking a 25 percent cut in the money they receive from the league because they didn’t meet incentives spelled out in the 2005 collective-bargaining agreement. In short, the Jackets’ revenue-growth rate in the past year failed to match the league average during the same period. - Columbus Dispatch

Carolina and Nashville have also said that they will see their revenue sharing cheques cut because they did not meet the criteria for full participation. Phoenix, Florida and Atlanta are probably in this boat, too.

The small market American teams are not looking at a very good year, financially speaking. We can expect to see the vast revenue disparities to continue to widen and costs for all teams to continue to rise.

1) The economy is deteriorating as we speak. Teams with a low season ticket base will find it more difficult to attract walk up customers as discretionary income falls next season. (The silver lining? TV viewership may go up when more people find big league sports unaffordable.)

2) Revenue sharing has been cut for this year and as long as the big markets in Canada and the traditional American markets grow revenues faster than the revenues among the weak sisters, the welfare will get cut again next year.

3) Player costs are up substantially.

4) Travel costs - a hockey team’s biggest expense after payroll - are rocketing higher. The new schedule means significantly more travel and the price of oil will make that travel much more expensive. If the price of oil continues to rise, all sports will be negatively affected.

Few of these low revenue teams were profitable this year and losses will be even higher next year. None of these franchises were particularly robust in good economic times. A quadruple whammy is now slamming them. Are they all strong enough to survive?

We’ll see.

Postscript: The good news for the fan is that there is no way the NHLPA will opt to re-open the CBA given the poor economy. The bad news is that the league as a whole will suffer with a declining economy and high oil prices. The owners are whiners at the best of times and when they have legitimate gripes, the whining ratchets up several notches. It will be interesting to see whether the fans are sympathetic this time around.

The Same Lesson

In the wake of the Markus Naslund defection, Ed Willes delivers up a blast at Canuck GM Mike Gillis (and indirectly at owner Francis Aquilini):

I mean, if the most virulent Canucks hater would have plotted the team’s downfall, it’s doubtful he could have come up with everything that’s happened. This team is now on the precipice of disaster and the only thing that can save them — failing a change of Sundin’s heart — is a superhuman season from Roberto Luongo and/or a masterful coaching job from Alain Vigneault and that means another seven months of 2-1 games.

I’m not sure that even Sundin could turn things around at this stage. And even if he does make up his mind, he’ll probably choose an Eastern contender over a Western pretender no matter how much money the Canucks throw at him.

I understand why fans were unhappy with Naslund over the past couple of seasons. He didn’t perform like a $6 MM player. Unfortunately, that unhappiness was not tempered by the knowledge that the fact his paycheque was too big did not make him a useless player. Getting 25 goals for $6 MM is better than getting 0 goals from $6 MM in cap space. I don’t have any problems letting him go, but I do have problems with it if there isn’t any reasonable alternative. I argued against signing Naslund three years ago but only because I thought the Canucks would be better off keeping Jovanovski. Now? I’d much rather have Naslund at $4 MM than anybody still available.

The Canucks were apparently in the Dan Boyle sweepstakes, which is another bad sign. Boyle isn’t an answer and if the Canucks were actually pursuing him, Mike Gillis is feeling pressured. The last thing this team needs is a couple of panic moves. If there is nothing smart to be done the best thing to do is nothing. We’re this close (hold up finger and thumb about a quarter inch apart) from needing to blow the whole works up. On the precipice of a disaster, indeed.

I wish that the team owner, the general manager, the media and the fans did not have to learn the same lesson about every five years. Boldness seldom pays. It is a lot easier to get worse than it is to get better.

Bettman Did Boot It

On the Forechecker comments on the Boots Del Biaggio black eye:

Back to the Del Biaggio story; there are many out there jumping on Gary Bettman and the NHL for failing to perform due diligence and getting caught looking foolish, but if you go back to the initial stories in this drama, you’ll see that Del Biaggio’s brokerage is being sued right alongside him. While we have to wait for all the facts to come out in court, the appearance is that the lenders were trying to independently verify Del Biaggio’s collateral claims, and received documents that, while appearing genuine, where in fact falsified by an employee there. The responsibility lies with the guilty parties here, folks, not the victims.

Gary Bettman as victim in this fiasco? I’ve seen variations of this argument on the message boards and, frankly, I don’t get it. The best defense of the league boils down to “Gullible Gary got taken by a clever con man. Again.” I think I could find a way to assign some blame to Bettman even if we left it at that. This is a good defense? Bettman is a chump? That’s a pretty lousy excuse and I don’t understand why anyone would want to advance it. Somebody is surely responsible for the fact the league ownership looks foolish. Again.

Even Bettman as chump doesn’t really fly. The problem is that Boots was being touted as a potential owner of the Penguins before he committed any fraudulent act. He was also the owner in waiting in Kansas City. The NHL wasn’t fooled by the phony documents because they did not exist at the time the league should have been checking him out.

The actual facts that emerge as a result of the court cases will probably not tell us how the NHL was conned, but it is likely that nobody thought to check him out. My guess is that when Boots finally had to come up with some money, he convinced an employee at the brokerage firm to give him a list of his father’s accounts. Then he added one letter to the document and the accounts belonging to William Del Biaggio II appeared to belong to William Del Biaggio III. The son then proceeded to float loans against his father’s money.

Due diligence for the NHL is not just about “Will the first cheque clear?” Potential NHL partners should be investigated. Who is Boots? How much money does he have? How did he make his money? Does he have enough to own a team or is he merely a Rod Bryden like financial engineer? If the NHL actually did check him out very late in the game and were fooled by the same documents that fooled the banks, they deserved their fate. Even William Del Biaggio II is probably unsuitable as an owner because there is nothing in his background that suggests he has the kind of money to play in the big leagues either.

Boots doesn’t have any money. He never had any money. If the NHL had bothered to check him out, they would have learned this. A Google search turned up so little information on Boots I was suspicious of him in January 2007. My due diligence using Google was more thorough than the NHL due diligence?

There are only two options here:

1) Bettman is a chump who foolishly accepted the notion that Del Biaggio had tens of millions of dollars even though there is nothing in his background to suggest he has earned any money at all.

2) The league didn’t bother to check Boots out because Anschutz was his sponsor, because having Boots around as an owner in waiting helped Mario jerk an arena out of the people in Pittsburgh and because Boots helped Leipold sell his stake in Nashville.

I’m betting on on number two, but either way, Bettman booted it and the league richly deserves the Del Biaggio embarassment.

Postscript: Is anyone else confused about the Del Biaggio stake in the Predators? Why is his stake in the team worth only $25 MM when he reportedly owns between 25% and 31% of an asset that reportedly sold for $193 MM?

While we probably won’t learn more about NHL incompetence in this matter, I think we will learn a lot more about the real value of the Predators.

Grading Gillis

Dear Tom,

BL

I’m trying to keep an open mind, but its been a struggle. I will cheerfully acknowledge that I do not know what Gillis should be doing. I have no idea how to build a winner under this CBA and I don’t criticise managers for actions not taken. Since Gillis hasn’t done very much, there isn’t much to discuss. Judging from what I have seen, I haven’t liked.

1) I don’t have any problems with the decision to grab Wellwood. If he does well in a scoring role, he is a steal at $1 MM. If he doesn’t score, the Canucks can waive him and waste Aqulini’s money in the AHL. Chalk this one up in the plus column for Gillis.

2) I think Gillis has done a poor job of managing fan expectations. From the outset he has implied that he could - with a bold move or two - change the nature of this team and win in the near term. If he believed this, he is a naive fool. Either the Canucks add wisely to the Nonis foundation and get better, or they decide fundamental change is required and take backward steps to create a better future. Fundamental change and winning now are probably mutually exclusive goals.

Losing is apparently unacceptable. The team is - according to Gillis - a long way from winning. How do we get close to winning if we are not prepared to accept losing for a while?

3) I’m not particularly attached to the Sedins, but shopping them at the draft was stupid. The chance of finding a good trade was very remote and the chance that word of his efforts would leak was very high. Gillis needs the Sedins to do well next year and letting them know he is trying to trade them does not help.

4) I like to be able to see a plan. Aside from a few ridiculous comments about using statistics to better evaluate players - he doesn’t know how to do that yet - I can’t see what he is doing. What is the team doing about Naslund or Morrison? Apparently neither player is going to be signed. That’s fine, I suppose, but Gillis should decide that and announce it. He can then explain how he intends to replace them. How many good free agents are available? Does Gillis really believe he can sign two top six forwards to replace Morrison and Naslund and then find a third one to improve their offense?

The only way to improve a team is to get better players. They can be acquired in the draft but that takes years. They can sometimes be acquired in a trade, but trades don’t happen often with this CBA. They can also be signed as free agents, but free agents are always overpaid and the player - not the GM - decides which team will get him.

I get the feeling that Mike Gillis figured that being a general manager in the NHL was pretty much as easy as being the general manager of a team in a hockey pool. He could make this trade, draft that guy and sign a couple of free agents - and shazzam! - a winner!

Reality bites. I’ve been reduced to hoping Gillis is a fast learner.

Perp Watch

Henry Samueli, owner of the Anaheim Ducks, pleaded guilty to lying to federal regulators. The guilty plea will apparently allow him to avoid jail time.

Gary Bettman hasn’t had a good month. According to Rick Westhead of the Toronto Star, the Commissioner was blindsided by the revelations that Boots Del Biaggio’s purchase of a piece of the Nashville Predators was financed in part by two other NHL owners. Now this. I wonder if Samueli tipped him off at the Board of Governor’s meeting last week.

The league can force owners convicted of a crime to give up his franchise, but I doubt if the NHL will take any action. Henry Samueli can’t vote, serve on a jury or visit Canada. Can he own an NHL team despite the fact he’s a liar who ripped off his shareholders?

Sure. Why not? This is the NHL.

Update: Bettman has suspended Samueli. Whatever that means.

Update II: Eric Duhatschek has some good stuff:

Michael Schulman, current alternate governor, will serve as the the Ducks’ governor and will be responsible for managing the operations of the club, reporting to the commissioner. In the event Schulman determines that the Ducks needs financial assistance from ownership, or raises any other issue that might need ownership involvement, he shall communicate that need to Bettman, who then will make the appropriate arrangements.

So if the Leafs approach the Ducks again about Brian Burke, Gary gets involved? If Burke signs Corey Perry to a long term deal, Gary discusses the comitment with Samueli? I hope he charges for the advice.