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SPORT | MARCH 16, 1998 VOL. 151 NO. 10 |
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Who Gets The Oilers? Barring a last-minute rescue, Edmonton's hockey franchise will be the next to move south of the border By ANDREW PURVIS /EDMONTON
Now where's that fairy godmother? The Oilers are on the auction block, and unless local investors come up with $70 million this week, one of the most fabled teams in NHL history--and a major source of Canadian pride--will be headed for Houston. The outcome, however, could go into overtime. Under a deal signed by owner Peter Pocklington and the city of Edmonton four years ago, local investors have until March 13 to counter a bid made last month by Houston Rockets owner Les Alexander. Late last week such a group was beating the bushes for the final $10 million to make a down payment. Fans of all kinds--from little boys with their piggy banks to a 51-year-old grandmother from Goodfare, Alta., who trudged 400 windswept kilometers to raise $14,000--have turned in rivulets of cash to show their support. But many other Oiler fans have resigned themselves to the inevitable, if not this week, then in a few years' time. "No matter who gets the club, I don't see it staying beyond 2004," says Billy Warwick, a former pro player who runs an entertainment magazine. That is, in fact, becoming a national refrain. The bell tolling for the Oilers has already clanged for the Quebec Nordiques and the Winnipeg Jets. Anemic revenues, skyrocketing salaries and a weak Canadian dollar are threatening virtually all the country's remaining smaller National Hockey League franchises. "I don't see how Canada's teams can do it," says Oiler general manager Glen Sather. In Ottawa, Calgary and even Vancouver, the outlook is similar. Only Toronto and Montreal seem unassailable in the long run. Repeated losses on the world hockey stage were hard to take, but this trend is gloomier still. The biggest culprit in the cost squeeze is player salaries. In 10 years they have risen from about 30% of revenues for most smaller clubs to 90% or more. In 1990, the average NHL pay package was $200,000; today it tops $1.1 million. The money ladled out to a superstar like Detroit's Sergei Fedorov, who could make $28 million this year, is more than the Oilers can afford for their entire club. Pocklington says the team has been in the red for six years, and lost more than $5 million last year. Canadian teams are at a further disadvantage since most of their revenues are in Canadian currency, while their expenses--especially that payroll--must be paid in U.S. greenbacks. Nor have NHL teams clawed back the revenue from television that their peers in other pro sports have won. Unlike the NBA and NFL, the NHL depends on gate receipts for the lion's share of revenue. And unless commissioner Gary Bettman can finagle a rich U.S. TV network package this year, only teams with big local TV audiences and huge attendance are likely to survive for long. What to do? Salary caps, like those applied by the Canadian Football League, won't work in the continent-wide NHL. But Ken Dryden, general manager of the Toronto Maple Leafs, lays out several possible scenarios. It's hard to see top salaries coming down or revenues suddenly skyrocketing, he says. But if franchises like Calgary and Ottawa can hang on for a few years, salaries for at least journeyman players might drop and teams might find a way to win without the most expensive superstars. "You can always make a small-market team go," he says. "You just have to ask more of fewer people." Or more people. The Oilers' plight has once again raised the issue of whether taxpayer money should subsidize pro teams. The issue is being pondered in Ottawa by a parliamentary subcommittee, and a final report is due this spring. Advocates point out that teams generate millions in indirect revenues (an estimated $50 million in Edmonton). They also note that in the U.S. taxpayers have repeatedly anted up for new arenas to boost gate receipts. But in Edmonton, austerity-minded city councillors shouted down a plea to provide $10 million to help rescue the Oilers, though they did leave a door open for a last-minute bailout if private investors close in on their target this week. Edmonton Mayor Bill Smith thinks there could be enough local business support once Pocklington, who fell out with many advertisers over the 1988 sale of Wayne Gretzky, has gone. Sather also believes that his Oilers can survive where they are, despite the salary burden. He says efforts like producing the team's own television package for the local market--a scheme expected to go into effect next year if the team stays--could make the vital difference. "We have to be creative," he says. "We have to turn over every stone to find young players we can afford." "Every Canadian wants the best," says Sather. But expectations can adjust. After Winnipeg lost its beloved Jets two years ago, for example, fans consoled themselves with the second-tier International Hockey League, which has teams in Quebec City and across the U.S. Now the Winnipeg Moose are a play-off contender and average 6,000 fans a game. But, admits Mayor Susan Thompson, "they haven't filled the void." Back in the Alberta capital, a similar pang is growing. On a snowy evening at an indoor rink in West Edmonton, peewee-league coach Don McNabb laced his skates and recalled the wondrous arrival of the NHL franchise 19 years ago. "It was like a dream," said the 43-year-old pipeline executive. "If we don't have the Oilers, then what do we have? Winter and a mall." And fewer fairy tales. --With reporting by Mike D'Amour /Winnipeg
WHO'S GOING, WHO'S STAYING, WHO'S GONE QUEBEC NORDIQUES Sold for $75 million in 1995. Became the Colorado Avalanche. Won the 1996 Stanley Cup WINNIPEG JETS Sold for $65 million in 1996 after failing to raise money for a new stadium. Now the Phoenix Coyotes EDMONTON OILERS Clock is ticking on a Houston bid. Owner Peter Pocklington says he has lost money for six years OTTAWA SENATORS Losing money. Last year qualified for the NHL Assistance Plan that aids financially troubled teams CALGARY FLAMES made a small profit last year, but despite that still qualified for help from the NHL assistance plan VANCOUVER CANUCKS lost more than $20 million last year, but the U.S. owner is credited with deep pockets TORONTO MAPLE LEAFS could earn more than $5.5 million this year, and will move to the Air Canada Center next year MONTREAL CANADIENS turned a $17 million profit this year, two years after they moved to the Molson Center
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he Edmonton Oilers seemed to defy the imagination. Five Stanley
Cups won before the team was a decade old. Scary goal totals
back in the 1980s that routinely were double those that the best
teams can manage today. A mother lode of talent that included as
many as 10 players bound for the Hockey Hall of Fame. And, of
course, Wayne Gretzky. All that in a city of 600,000 that
definitely wasn't one of the continent's major media markets and
whose other top entertainment attraction is the West Edmonton
Mall. A Cinderella story that often seemed too good to be true.