Bettman and the Jets: Tales from the NHL’s flight from Winnipeg

NHL commissioner Gary Bettman arrived in an angry city under police escort to tell Winnipegers he wants the Jets to stay in town.

Bettman met Saturday with government officials, members of a private business group that wants to buy the Jets and the Jets current owners at an undisclosed location. Later, he and Jets president Barry Shenkarow arrived at a midafternoon news briefing with several police officers in tow.

"It's too easy to pick on me because I'm an American," said Bettman, referring to a Friday demonstration that targeted him. If you want to do it, go ahead. But it's not accurate. I'm not the one who created the situation. I'm trying to deal with it."

Bettman said the NHL was committed to keeping hockey franchises in small-market Canadian cities. But they have to be viable.

Winnipeg loves its hockey. But not enough to put real money behind keeping the Jets in Manitoba's capital.

And the absence of a serious bidder to buy the NHL franchise is why Winnipeg may lose the Jets to another city, likely in the U.S., NHL commissioner Gary Bettman said yesterday.

"This is not an NHL decision, this is really up to the people in Winnipeg and the prospective owners . . . to see if there's something to be done to keep the team there," Bettman said following a morning speech to the annual meeting of The Canadian Press in Toronto.

"But the biggest problem is there doesn't seem to be anybody, in a serious fashion, who wants to own the franchise."

A final decision on the Jets' status in Winnipeg was postponed from midnight Monday, at the request of the federal government. After that deadline, Jets president Barry Shenkarow was to be free to sell the team to parties outside of Winnipeg. Minneapolis, which lost the North Stars in a move to Dallas two years ago, is considered a leading contender to buy the Jets.

Bettman said a private consortium called the Manitoba Entertainment Complex told him when he flew to Winnipeg on Saturday that a group was ready to buy the team. However, Bettman was frustrated by the group's insistence on swinging a low-risk deal.

The commissioner said the potential buyers want taxpayers to fund the construction of a new $ 140 million arena but won't guarantee to keep the club in Winnipeg for any length of time, even through the completion of the new arena, because it doesn't want to be stuck with long-term financial losses.

"There are certain things any sports league requires of prospective ownership and if you have owners who are not prepared to stand behind the franchise, then they are not serious owners," Bettman said. "And that would concern me if I lived in Winnipeg, because they are talking about turning over a $ 140 million building to these owners with no prospect of having the team in the building (for a set length of time) and that makes no sense to us.

"If this team is pre-ordained to move, then I think we should get it over with and not, at taxpayer expense, build a white elephant."

In 1991, the city and the province agreed to cover the club's losses until the summer of 1997, but time ran out this week.

In 1979, the NHL took in the WHA's survivors -- the Jets, New England Whalers, Quebec Nordiques and Edmonton Oilers with a kid named Wayne Gretzky whose previous WHA team, the Indianapolis Racers, had folded.

NHL Commissioner Gary Bettman reminded reporters this week that these were not cities to which the NHL chose to expand its operations. Perhaps, as the NHL strives to become a bona-fide big league, a city such as Winnipeg was doomed to fall off the pace.

''In the 21st century, when you're competing with basketball and baseball and football, there's realities of business that can't be ignored. We can't compensate for lack of ownership and markets that are too small,'' Bettman said. ''If you were the NFL or major-league baseball or the NBA, I'm not sure you'd put franchises there, even today.''

About $13 million was raised by the public sector, and it appeared the team would be purchased by a group of local businessmen dubbed The Spirit of Manitoba. But they fell short of cash.

So when the premier of Manitoba, Gary Filmon, rejected a plan to buy the Jets and pay for the new arena by legalizing gambling, all Winnipeg had bought was one more year.

''See that empty seat? That's where Gary Filmon used to sit,'' said Winnipeg Sun columnist Ed Willes, pointing to Winnipeg Arena's west side. ''Ever since the death threats, he doesn't come here anymore.''

Filmon isn't the only target of the fans' wrath. Forward Keith Tkachuk, the NHL's third-highest paid player this season at $ 6 million, became a symbol of the league's new salary structure and was frequently booed. Former owner Barry Shenkarow, a lifelong Winnipegger, had been losing millions, but was accused of selling out.

After a failed attempt by Minnesota businessmen to move the team there, the Jets were bought by Jerry Colangelo, owner of the NBA's Phoenix Suns and Major League Baseball's Arizona Diamondbacks.

Winnipeg is not among the NHL's smaller cities, but it is the smallest market. ''It's not like there are suburbs here,'' noted Gilhen, a member of the Penguins' 1991 Stanley Cup championship team. ''That's the thing that makes what these people did so unbelievable, how they all rallied. I saw kids crying while they were emptying their piggy banks, carrying jars of pennies. You can't imagine how that touches you, how it hurts.''

NOW only a requiem remains for professional hockey in Winnipeg, and quite probably for other Canadian cities in the years ahead. The critical mass of Canadian teams is declining, and will decline further. The Canadian influence in our "national game" is waning. The Winnipeg Jets' demise is but one example of this trend.

The writing appeared on the Jets' wall long before it became clear enough for all to read it, including the exemplary business leaders of Winnipeg who tried to save the franchise by being willing to invest. During the prolonged labour dispute, the owners' representative, National Hockey League president Gary Bettman, insisted that assisting small-market teams remained among the owners' prime objectives. These protestations were largely hot air. The NHL owners were and are not interested in revenue-sharing, the most effective way of assisting smaller markets. Once the new labour agreement with the players was signed without any revenue-sharing and only a modest series of restraints on salaries, the Jets' fate was probably sealed.

In recent days Mr. Bettman has taken to saying, amid his crocodile tears, that cities such as Winnipeg would probably never be given franchises in hockey or other sports in today's environment. He may well be correct, but it remains a fact that both professional basketball and football have teams, including recently created ones, in small markets such as Sacramento, San Antonio, Portland, Green Bay and Jacksonville. These cities south of the border have teams, and all that goes with them, in part because basketball and football attracted huge television contracts that produce revenues that can help small teams. Hockey has been desperately looking for a television megacontract for two decades, and signed a modest one with Fox Television just this year.

Still, the NHL understandably wants more. Winnipeg, Quebec, Ottawa, Calgary and such places do nothing for viewers in a country where, according to a recent Lou Harris poll, only 1 per cent of the population knows the name of the Canadian Prime Minister. (Those who still dream of filling Hamilton's Copps Coliseum with a professional team, take note.)

Despite Mr. Bettman's protestations that he wanted to keep the Jets in Winnipeg, small Canadian markets are a pain in the neck for his bosses, the American owners. Their only fear is that the owners of these small market teams will move to a large American market, thus depriving the owners of expansion fees.

Mr. Bettman knows that all other major professional sports have revenue-sharing or a salary cap, of a sort, which give small markets a chance to compete. The National Football League has revenue-sharing and a loosely enforced salary cap. The National Basketball Association has a salary cap, which some teams admittedly try to circumvent. The "lords of the realm" who run professional baseball proposed a system of modest revenue-sharing in their ill-fated recent negotiations with the players. Therefore, the NHL stands in splendid isolation as the only professional league without internal systems for addressing the differentials in market size.

More than 1,000 people stopped traffic in downtown Winnipeg today in a rally to save the Winnipeg Jets.

People in business suits and teenagers in hockey sweaters chanted Save Our Jets at the historic corner of Portage Avenue and Main Street after learning the National Hockey League team may leave the city.

Much of the noisy crowd then marched to the Manitoba legislature, where Conservative Premier Gary Filmon tried to calm the crowd. ''You're absolutely right,'' the premier shouted from the legislature steps. ''The NHL has no right to take away NHL hockey from Canada.''

Filmon told them he was trying to arrange a meeting with NHL commissioner Gary Bettman in Winnipeg Saturday or Sunday to work out a deal.

Fans are furious with Bettman for putting tough stipulations on a local businesss group that wants to buy the team and keep it in Winnipeg. They held up signs saying Bettman is a Jerk, Wise Up Bettman and Bettman is Two-Faced as they gathered in cool weather under overcast skies.

''I'm hoping (Bettman) will realize that hockey is a crucial element to North American society and for Canada it's been here for so long and to lose it like this is very disappointing,'' said Sheila Nicholson, who works as an usher at Jets games.

Davidson's take on the IHL's battle with the NHL and American Hockey League for some markets is a positive. ''It makes the sport a better product, putting teams into markets without hockey,'' he said. However, the migration of Canadian clubs to the United States - the Avalanche and the recent shift of Winnipeg to Phoenix - ''is a gigantic issue,'' Davidson said.

''The exchange rate (on the dollar) is 35 to 40 percent different,'' said Davidson, an Ottawa native who grew up in Calgary and now lives in New York. ''Even the weather is a factor. If you're a 19-year-old kid, would you want to play in the frozen North as opposed to somewhere like Florida?

''I think the incentive program the NHL has put in is going to work. If a club markets itself to the best of its ability and improves its arena and so forth, the league has an assistance program (limited revenue sharing) to help out. Edmonton and Calgary have done that. Vancouver and Montreal have new buildings. Toronto has an old, decrepit place (historic Maple Leaf Gardens) that should be bombed. Truly. I can say that, because I'm not from Toronto.''

While Davidson sees the NHL solidifying its remaining Canadian franchises, he sees only growth for the league and the sport in U.S. markets.

''Hartford is the only exception,'' he said. ''There are problems there to be worked out. I see the league going next to the Pacific Northwest, maybe Portland. Nashville is a natural, of course, and I think the NHL would love to get back into the Twin Cities.

''There's talk about Atlanta and the Carolinas and Houston, and perhaps even a franchise in Ohio, not so much Cleveland, but more so the Columbus area. I think the NHL's main idea right now is to keep strong the franchises it has before looking ahead.''

Hockey is still Canada's major sport but the NHL is not "our" league any more. We forget that it probably never was. In the still-exalted six-team NHL, although the Montreal Canadiens and Toronto Maple Leafs won more than a fair share of championships, four franchises were based in the United States and one man, Jim Norris, owned or controlled three of them. Small wonder that cynics referred openly to the Norris House League.

Even so, when the Fox network won its recent dispute with the CBC over playoff scheduling and the Canadiens were ordered to play on Sunday afternoons rather than the familiar Saturday evenings, a spokesman for French-Canadian television objected that Bettman and his aides were robbing Canadians of their traditional right to guzzle beer and chomp on pizza at night rather than during the day.

Big deal. Any self-respecting Canadian can drink and eat at any time. Most of us can abuse referees while doing it.

But the charges that Bettman is consciously handing control of the NHL to Americans refuse to go away.

As the Leafs, Canadiens, Vancouver Canucks and Winnipeg Jets prepared to follow the Calgary Flames into elimination in the opening round of the annual Stanley Cup marathon, commentators and ticket-buyers started all over again with comments to the effect that having eight American teams alive and every Canadian squad eliminated would guarantee happiness for Bettman and all his friends.

Have you figured out what that is? It's hogwash.

Also, it's whining and moping and pouting and many other synonyms to describe the immature emotions which prompt diligent parents to have long talks with pre-school children.

Bettman isn't paid to care who wins. He's paid to put money in the pockets of his owners. And he's succeeding.

The economics of the NHL are different from those of other leagues in a variety of ways. NHL teams are far more dependent than their counterparts in other leagues on revenues from ticket sales and in- arena sources, such as advertising, concessions and the like.

Although we have made considerable strides in generating new television revenues, particularly through our contracts in the United States with ESPN and Fox, the fact remains that the NHL's national television revenues are currently only a small fraction of those earned by teams in other leagues. A second important factor is that our Canadian teams are forced to deal with the disparity in value between the U.S. and Canadian dollars. That disparity means that while Canadian teams pay many of their costs, including their players salaries in U.S. dollars, they earn much of their revenue in Canadian dollars. At the present currency differential, Canadian teams find themselves with approximately $1.30 of expense for each $1 of revenue. These two points limited television revenues and the unique problem of the Canadian currency differential - tend to put considerable economic pressure on certain of our clubs.
These revenue pressures are compounded by the fact that NHL teams have a cost structure very similar to other sports.

Each team has a major league roster of 24 players plus an additional compliment of minor league players. The average major league payroll is over $19 million, and NHL teams have all of the additional non-player expenses associated with operating a sports team, including arena costs, travel, non-player salaries, marketing, training camp, and a host of others. Many of our clubs do not earn operating profits and most recently, the League as a whole has operated at a loss.

Post: You've repeatedly said you wanted to wait on expansion until the house is in order. How close is the house to being in order?

Bettman: On a franchise basis, the house is more in order than it's ever been. For the first time, we're not looking at any relocations. The Oilers will stay in Edmonton, the Whalers are staying in Hartford. We've had the relocations that couldn't be avoided in Quebec and Winnipeg. We've gotten new ownership in Dallas and Los Angeles and the landscape is looking a little tidier.

Post: You know that even if you were a Canadian citizen, you couldn't be elected prime minister.

Bettman: I'm not running.

Post: Even with that on the record, is there a part of you that regrets this exodus from Canada in such a traditional Canadian league?

Bettman: I'm unhappy about those moves. We did everything in our power to avoid them, much as we did everything in our power to avoid a move of the Oilers. At last there, we were successful. In the final analysis, the reason those teams moved from Winnipeg and Quebec was that there was no longer anyone prepared to own NHL franchises in those markets. It didn't work, and that was confirmed by the fact that existing ownerships didn't want to stay. There was no prospect of future ownership in those markets. We wound up staying in Winnipeg an extra year so that they could try and find new ownership, and they couldn't do it.

Post: It's been said Atlanta and Portland, Ore., are slam dunks for expansion.

Bettman: Would it be great to have Atlanta and Portland and maybe some other cities in this league? Yes, at some point. But there is no list.

Post: Didn't you have to bring in methods that worked in the NBA?

Bettman: You can't take what you do in one sport and on a cookie-cutter basis take it to another sport. The fact is, this is a great game in its own right. It has its own strengths, and those have to be capitalized on. There are certain principles in running any sports league or business that are essential, so that experience in my 12 years at the NBA was very helpful. But this game has to be treated in its own right, and we're trying to make sure we maximize our exposure. Fact is, I think most people would tell you that when it comes to the game, I'm fairly conservative.

Post: Conservative in what sense?

Bettman: I'm not advocating, and in some instances I even resist, big change. The game is sound, healthy, vibrant. The best example was when that obstruction committee I appointed last summer met. We were looking to open up the game, and there were suggestions about pulling out the red line and some fundamental changes. We decided instead to try to fine-tune the rules we had before we considered anything more radical.

Post: Did you, quote, fail, unquote, as the lockout NHL commissioner because you didn't come out of it with an NBA-style salary cap?

Bettman: It wasn't my job to get a salary cap. In fact, I don't think a salary cap is what this league needed.

The Winnipeg Jets are likely to move. But they won't be heading to Atlanta."Nobody's coming next year, because we have exclusivity for hockey in the Omni (for one more year)," said Knights President Richard Adler, who now has no interest in an NHL team.

The collapse of a Winnipeg group's bid to keep the Jets in Canada led to rumors that the club would come to either Minneapolis or Atlanta.

Adler said no one has approached him about joining a bid to buy the Jets. Several groups in Minneapolis are reportedly interested in the club.

Turner Broadcasting would like an NHL team for Atlanta, but not before a new arena is built to replace the Omni. The NHL is expected to expand by 1997.

The city of Winnipeg, the province of Manitoba and a group of private investors with an option to buy the team have until Monday to negotiate a deal to build a new arena and transfer ownership. But NHL commissioner Gary Bettman this week imposed financial guidelines that the group called unacceptable.

If one of Canada's small market teams such as Ottawa, Edmonton, Winnipeg or Quebec continues to falter financially, it could end up in Phoenix, the Arizona Republic reports.

"We've had discussions with some NHL teams and that has been on public record," Bryan Colangelo, president of Phoenix Arena Sports, a subsidiary of the Suns basketball team, told the newspaper.

"We've also had discussions with others who remain nameless and have been on hold due to situations working out locally and in those respective cities. But we are keeping a watchful eye on those scenarios and are waiting for something to come out of it."

Jerry Colangelo, president of the Suns, is confident he'll eventually have an NHL team to share his building.

"The simple fact is that the National Hockey League would like a team in Phoenix someday and we have the building ready for it," he said.

The newspaper said Colangelo has been assured by "good friend" Gary Bettman, the NHL commissioner, that the league wants a franchise in Phoenix. The Republic suggests that the "financially strapped Quebec Nordiques and Winnipeg Jets could be up for sale or might have to relocate in a bigger market to stay afloat.

"The question is only when and how - whether it's two or three years, and whether it's through expansion or relocation," Jerry Colangelo told The Star's Chris Young, adding that he has been approached quietly by Phoenix-area investors interested in bringing NHL hockey here.

"We continually get used by teams, though, especially in Canada, who are trying to get better (arena) deals."