Canadian hockey up against the financial boards
The Ottawa Senators filed for bankruptcy Thursday; the Vancouver Canucks are for sale.
When the Ottawa Senators squared off against the Vancouver Canucks in Vancouver last Wednesday, both Canadian teams were tied for first place in the National Hockey League. But the Senators and the Canucks also shared a more painful distinction: the Senators have since filed for bankruptcy and the Canucks, also in dire financial straits, are up for sale.
Now, as both teams look set to end up in the hands of US owners - or on the chopping block - fans, commentators, and backers alike are asking: What went wrong? In a land whose national pastime is hockey, why hasn't competitive success translated to financial success for these champion teams?
The intrigue behind the Senators' downfall is almost as thick as the ice on the Ottawa River this time of the year. Some experts say the heart of the teams' financial problems may be the fact that NHL players are paid in US dollars - whether they play in the US or for one of the six Canadian NHL clubs. With the Canadian dollar at an all-time low, this requirement is slowly eroding Canadian teams' ability to recruit top talent.
Another critical factor may be the size of the Senators' marketplace. Where Ottawa's population barely tops 1 million, the most profitable Canadian team, the Toronto Maple Leafs, sits in a city of 4 million.
"Ottawa should never have been allowed to get a franchise in the first place," complains lifelong hockey fan John Whelan.
Some fans also complain that competition from new US franchises - and competition among US cities to lure Canadian teams - is hurting hockey in Canada. Drew Mahalic, head of the Portland Oregon Sports Authority, a nonprofit group trying to lure the NHL to the city, told the Canadian Press on Friday that if one of the Canadian teams is unable to regain its financial stability at home, "we are the No. 1 solution for that team to relocate."
"The US is stealing our game away," laments one Ottawa resident. "Canadian hockey in the NHL will probably die in the next five years, except for Toronto and Montreal."
Since the Senators' revival in 1991, the team has managed to build a spiraling debt of $240 million (C$370 million). Two of the Senators' key creditors, the Canadian Imperial Bank of Commerce and FleetBoston Financial Corp, scuttled a rescue plan that would have infused $29 million into the ailing franchise two weeks ago.
The team also owes a large debt to New Jersey-based Covanta Energy Corp., which helped finance the construction of its new arena, opened in 1996. The team's revenues jumped from $26 million to $35 million that season, but construction costs and dwindling ticket sales led to revenues of only $5.5 million last year.
The Senators' bankruptcy filing is only the third by a North American professional sports team in the past 29 years - and the shock in the Canadian capital is far from thawing. "I'm let down and angry," says Glen Anderson, another Ottawa resident, who wonders if his ticket to see the Senators play the Tampa Bay Lightning this Wednesday may be his last chance to cheer for his home team.
Chat rooms on the hockey fan website Faceoff.com were filled with jibes from fans and detractors alike. "Will play for food!" read a popular rant. "Where's my paycheck? Don't I get paid?" joked another. The Senators are just now issuing their Jan. 1 payroll checks, worth $2.4 million.
A nationwide electronic poll last week showed Canadian sports fans steeling themselves for the worst. A startling 26 percent agreed, "It's time [for the Senators] to move on to another city;" 24 percent checked, "It's time to get a new owner."
The current majority owner, Ottawa businessman Rod Bryden, declared last week: "there's more than a fair chance that the team will not play in Ottawa in the next season." He added, though, that the team might remain in town if fans turn out in droves to buy tickets for the remaining games. In the 2001 season, an average of 4,500 seats went unsold every night in the 18,500-seat arena.
The irony, of course, would be if the top-seeded Senators wins the Stanley Cup - a feat no Canadian team has pulled off since the Montreal Canadiens in 1993 - then ceases to exist.
"It's never a perfect world," the Senators' captain, Daniel Alfredsson, said before facing the Canucks last week. As if on cue, the Canucks stunned the Senators with a 6-4 win.