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NHL’s nuclear option for Phoenix Coyotes: Dispersal draft rather than relocation?

Greg Wyshynski
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The future of the Phoenix Coyotes could be determined by two men collecting signatures to put Glendale's deal with prospective owner Greg Jamison to a public vote. There's no way of predicting how that vote would go; but its mere presence on the ballot could put a chill into Jamison's hopes of raising equity to close the sale before the 2012-13 season.

Naturally, as this process has played out, the potential next step for the NHL has been discussed around the League. Some believe the NHL will shoulder the financial burden for yet another season, as Gary Bettman circles back to Jerry Reinsdorf for seemingly the hundredth time to rescue the team if Jamison's bid fails.

Some believe the team is destined for Quebec City — remember the "go and learn some French" brouhaha from May? — with the NHL having already prepared an alternate schedule if that needs to happen. (Something Gary Bettman has denied.)

Then there's the nuclear option: Folding the franchise. No moving vans. No relocation. Well, save for the players on the Coyotes, who would be dispersed around the League.

The last dispersal draft in the NHL was in 1991, after a series of events led to the admission of the San Jose Sharks into the NHL, the Minnesota North Stars having players taken off their roster by the Sharks, and then both teams restocking from the NHL at large. Among the players that moved teams: Rob Ramage, Charlie Huddy, Tim Kerr and Guy Lafleur, who was traded back to Quebec after being selected by the North Stars.

(That draft was related to a previous dispersal draft when the Cleveland Barons and Minnesota North Stars merged in 1978.)

Could it happen again with the Coyotes? Perhaps. As David Shoalts wrote in his Phoenix piece for the Globe & Mail on Friday, it's something that's been discussed among the chattering class in Toronto for the better part of the last month:

In some NHL circles, a more drastic solution is envisioned. The Coyotes could simply be folded, its 23 players sent to other NHL teams through a dispersal draft and the league would operate with 29 teams next season.

This would allow the NHL to collect expansion fees of $200-million or more each from Seattle and Quebec City, the top candidates for NHL teams, rather than a single relocation fee of $60-million or so for the Coyotes. That is a gain of at least $200-million if a total loss of $200-million is assumed on the NHL's investment in the Coyotes.

(Suddenly, Columbus Blue Jackets fans have visions of Mike Smith or Oliver Ekman-Larsson dancing through their heads.)

Shoalts is right with Quebec City. I don't believe the NHL wants to relocate to Quebec. I believe they want to expand there, and collect the type of expansion fees they did not when they have to hastily move the Atlanta Thrashers to Winnipeg.

I also feel that the Quebec's very public lobbying for a team — from construction of an arena to target an NHL franchise to the city by city tour of Nordiques fans for public pressure — is counter to what the League wants from its prospective owners. Who was the darling of the Board of Governors: Jim Balsillie or Mark Chipman?

To that end, there's a factor here that Shoalts didn't mention: The Markham arena, which will seat 20,000 and costs $325 million and is, of course, just for spiffy concerts and certainly not for a second NHL team in Toronto, no siree.

Bauer chairman Graeme Roustan and Toronto billionaire developer Rudy Bratty of the Regminton Group are quietly working on their building with the hopes that a change in ownership for the Toronto Maple Leafs means a second team in the GTO is a reality. Bell and Rogers wouldn't want a piece of those media rights …. right?

Here's a theory: Fold the Coyotes, disperse the players, and then eventually reactivate the franchise for relocation to Ontario; the new team wouldn't be on the hook for an expansion fee to the NHL, but would pay a territorial fee to the Leafs.

Again, in theory.

It's all in theory. I don't want to see the Coyotes go, and I hope that the local political maneuvering doesn't torpedo what seems like an earnest bid from Jamison to make the franchise work. I don't want to see this saga end with relocation or a franchise folding, because then all of this blood and treasure spent by the NHL would have been for nothing.

But if it did come to a dispersal draft, could that even get NHLPA approval? From Shoalts:

However, this would create legal headaches with lenders holding the Coyotes franchise as collateral and probably the NHL Players' Association. So the NHL's longest limbo dance will continue for now but a nasty choice could be coming quickly.

That said, couldn't you picture Gary Bettman walking to the negotiating table with the NHLPA, telling them times are so tough that they had to fold a team?

• • •

UPDATE: In the interest of equal time, here's an email we received from Jessica Engel:

I just read your latest installment regarding the Coyotes and the what if's. Your mention of the two men trying to attain enough signatures via petition inspired me to email you. There is a group of Coyote fans and those concerned with Glendale's future IF the Coyotes were to relocate that have set up and registered as a Political Action Committee called Glendale First! We have a core set of people in the Committee and we have established in our short time a solid group of volunteers that get out there and try to inform the citizens of the impact having a major sports team has on a city. We were inspired by the petitioners who have asked people to sign their petitions to 'save the libraries' and were not aware that this had anything to do with a sports team or a lease agreement.

Our website is glendalefirst.org and we pride ourselves on leaving emotions at the door, maintaining a respect for the law, and just trying to present the citizens of Glendale some facts to understand what is they will be asked to sign. We request that they please get the information first and make an informed decision before assuming what they are told the petition is for is really in fact regarding that. If they review the information and still wish to sign we completely understand.

So there you go.

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