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Wednesday, December 13, 2000
Why is 'Canadian problem' on back burner?




Attendance in Calgary is up. The disgruntled fans of Vancouver and the lower mainland are rediscovering map directions to The Garage, interest revitalized by a younger, faster, cheaper Canuck outfit. Skyreach patrons are treated nightly to the Oilers, one of the best pedal-to-the-metal teams in the game.

And, yes, the Ottawa Senators might just be a viable Stanley Cup contender.

Yet, as Canucks GM Brian Burke warns: "The wolf is still at the door. And it's ready to bite."

Money. It's the game outside the game; the issue which won't go away. Apparently, at least, not until a few more franchises do.

"Look, we've already lost two teams," says Burke, the irritation in his voice clearly growing. "How many is it going to take?"

With the season in full swing, the Oilers and Canucks off to promising starts and the Senators near the top of the heap, discussion of the special challenges faced by teams in Canada has receded into the background. The problems themselves, however, remain all too crippling.
George Johnson on people ignoring the "Canadian Problem."

Burke is an American -- born in New England, raised in Minnesota -- fighting a distinctly Canadian battle. His franchise, it must be noted, is in no immediate danger, as those in Alberta perennially are in this day and age.

Yet he remains extremely passionate about the brethren that he knows only too well are in constant danger.

"It's like a locomotive heading towards a cliff," he lectures. "If two cars have already disappeared from view, wouldn't you maybe, just maybe, believe that the rest of the cars behind them are in danger?"

And waiting for in the gorge below are billionaire Paul Allen and his Portland associates, who are seeking to couple an NHL team with their NBA TrailBlazers. Smartly, they're waiting in the weeds, monitoring which of the Canadian ownership groups -- weary of battling a shrinking dollar with no government assistance -- gets fed up or panics first and is willing to unload a ready-made franchise for between $70-$80 million.

The way things are going, Allen's group will be able to play "eeny-meeny-miny-mo" and choose the most enticing candidate.

With the season in full swing, the Oilers and Canucks off to promising starts and the Senators near the top of the heap, discussion of the special challenges faced by teams in Canada has receded into the background. The problems themselves, however, remain all too crippling.

"The currency is killing us," says Burke."If (government) wants a soft, devalued dollar to entice business to Canada and promote tourism, fine. But they should in turn be willing to help us try and survive.

"The exchange rate will cost (the Canucks) an additional $15 million this year."

The Senators, owner Rod Bryden recently assured the citizenry of Ottawa, aren't going anywhere. A good sign, since the Sens have had a "For Sale" sign in front of the Corel Center so often these last couple of years, the grass is all chopped up.

The Senators' season ticket base is roughly 11,100, around 1,400 less than the NHL average. But Bryden, bucking the predictions of every economist, is actually predicting an upswing in the Canadian dollar over the next 18 months or so.

Good luck, pal.

The Canucks have built upon a splendid second half to last season, a run which almost saw them qualify for the playoffs. They've revamped to be more fan friendly. They are no longer one of the poster boys for extravagant salary waste. Instead, they've adopted a high-risk, high-reward game and are throwing bodies around.

"We've encouraged a lot of the base back," says Burke. "But we're not out of the woods yet. This is obviously a year of tremendous importance for our franchise, with what happens on the ice and in terms of ticket sales. Of course, those two things are invariably tied together."

With reclusive Seattle billionaire John McCaw holding the purse strings, there's certainly no shortage of cash available. That said, even billionaires will lose money for only so long before looking to unload -- they didn't get to be billionaires by hanging on too long to bad investments. Still, with spending down and interest up, there's no reason to start sweating over Vancouver's immediate future.

It's a far different story in Alberta.

In Calgary, the offseason ticket plea/ultimatum campaign about a possible move is responsible for an increase of 2,001 people per game at the Saddledome, up from 14,946 last season to 16,247 so far. Good thing that money was secured during the summertime, because during the season, the Flames have been their same listless selves, despite a total revamping of the hockey department.

There's no guarantee ownership won't be trying to drum up support again next summer, or the summer after that, if the franchise lasts that long in the market.

One of the team's original owners, Harley Hotchkiss, who just happens to be the NHL's chairman of the board, says he is "guardedly optimistic" about the future of the Flames in Calgary. He adds, however, that a new agreement with the Saddledome and tax break initiatives with the Alberta government, including a share of the sports lottery betting monies, are imperative to survival.

"I've got 20 years of my life tied up in this team," says Hotchkiss. "We're all aware that we have not performed as we'd like the last four years, and it's been a rocky start at home this season, (one win in two months) but as an ownership group, we're committed to keeping the franchise here.

We've added $6.6 million or $6.7 million to our payroll budget, around 20 percent, and that's the fourth-highest in the league. I understand the fans' frustration but to say we reneged on a promise to put more money into the product is untrue. People thinking we've got all this extra money and put it in our pockets is unfair and, frankly, we resent it.
Flames owner Harley Hotchkiss on fans' perception of Flames' ownership

"We're grateful to our fans for rallying to the cause. I think it's one of the real success stories in this league, to be honest.

"We're willing to take no profit or, as we have at some points in the past, a bit of a financial hit, but this has to make sense. Ownership, management, the league and the players must find a system that allows everyone the chance to be competitive and makes some economic sense by 2004 and the opening of the collective bargaining agreement or, hopefully, before then."

"If we can't ..."

Back up the moving vans to the back of the 'Dome. The trick, of course, is trying to be around in 2004 for what will undoubtedly be a tense CBA stand-off.

Hotchkiss bristles at the accusation that Calgary ownership has gone back on a pre-ticket campaign pledge to spend more on players.

"We've added $6.6 million or $6.7 million to our payroll budget, around 20 percent, and that's the fourth-highest in the league. I understand the fans' frustration but to say we reneged on a promise to put more money into the product is untrue. People thinking we've got all this extra money and put it in our pockets is unfair and, frankly, we resent it."

The Oilers are a bit off in attendance, despite the chutzpah of their team, drawing only 14,551 per game, or 85.1 percent of capacity. And they've given their paying customers reason for optimism by going 9-3-4 in their first 16 home games.

Still, they face identical problems to their provincial rivals. And in Edmonton, with the unwieldy Edmonton Investors Group Ltd., in charge, there remains concern that too many cooks might spoil the broth.

So far, the Canadian-based clubs have been denied assistance at both the federal and provincial government levels. Government, inundated by voters wondering why they should subsidize millionaire hockey players, doesn't seem willing to budge.

If that's the case, warns Burke, there can be nothing but dire consequences ahead:

  • Hockey creates a significant number of jobs in Canada that would be lost should teams relocate.

  • Tax dollars. Burke estimates that in 2001, players employed by the six Canadian-based franchises will contribute between $28-$30 million in taxes to government coffers. Should the teams be relocated, their dollars go with them.

  • The importance of hockey to the cultural fabric of Canada.

    "Teams in this country are not -- repeat, not -- viable without some sort of government help," Burke stresses. "I know you've heard that before, but it's as true today as the first time we said it. For the life of me, I can't understand why they refuse to treat us like an industry. Why, if we'd had the tax breaks that the film industry in (British Columbia) has enjoyed, we might be at a break-even point right now.

    "I look at the film industry in B.C.; I look at the fast ferries in B.C.; I look at the bailout of the pulp mill in B.C. And those are just provincial instances. And look, we're not indicting those things because they help keep Canadian jobs and generate Canadian tax dollars. But so do we.

    "What's frustrating for all the Canadian franchises is that what had been a front-burner issue has become a back-burner issue. That should concern everyone who cares about NHL hockey in this country."

    George Johnson covers the NHL for the Calgary Herald. His NHL column appears every week during the season on ESPN.com.
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