[Jay Random]

Originally Posted by Badgers Nose

I think many of the NHL's 'owners' buy these teams using shell companies they are not really tied to. Then they can run at a loss, borrow to cover for a shot at short term glory and then walk away when things fall apart.

Examples, please? The only case I know of that even vaguely resembles what you suggest was Bruce McNall. And McNall didn't use a shell company; he was just a crook.

The NHL has done very little QA (judged solely on the constant money issues that pop up all over the league) when it comes to vetting owners.

You want an explanation for the constant money issues, look straight at the CBA and the salary floor. Consider Phoenix. When the cap was introduced, the salary floor was $21.5 million. That year, the Coyotes' losses bottomed out at $6m. By 2010-11, the floor was up to $43.4m — more than doubled in just five years, and higher than the cap was in '05-06. Not surprisingly, the Coyotes' losses skyrocketed to $24m, forcing them into bankruptcy. (Numbers from Forbes.com.) If the Coyotes had been able to go on paying their players $20-25m a year, as they did in the earlier part of the decade, they would actually have been profitable by 2010 — all other things being equal.

No amount of vetting will change one obvious fact: The NHL is in a number of markets that are financially marginal, that cannot compete on a level playing field with the rest of the league, and that will always lose money if you force them to spend on player salaries at the same rate as everyone else.

IMO they should ask for a massive bond or something that makes it hard to walk away from.

The price on NHL teams that have recently changed ownership — numbers according to Forbes again — ranges from $120m for the St. Louis Blues up to $1 billion for the Toronto Maple Leafs. Not massive enough for you? Too easy to just walk away from?



Back on topic: The Wild haven't lost money because of a bad owner. In fact, they may not have lost money at all. The huge bonuses paid out to Suter and Parise were not immediate expenses, but investments — advance payment against the players' long-term contracts. Those contracts are assets of the Minnesota Wild business; the remaining salaries are liabilities. Since so much of the total salary has been paid up front, the liabilities on those two contracts are worth much less than the assets at this time.

What the Wild have done is have negative cash flow. Because of the way those contracts were structured, they had to come up with $20 million in a hurry at a time when the league was shut down by a lockout and there was no cash coming in from operations. Of course the owners had to pay the bills — but they will make it back over the life of the contracts, provided that Suter and Parise are able to play and willing to fulfil their obligations over the whole term.