Is this really it?
When the Thrashers play on Sunday it could be more than the last game of the season; it could be the final one for the franchise.
Ownership is seeking potential buyers or investors to help the financially struggling team. The Atlanta Spirit has stated publicly it would prefer to keep the Thrashers here and is first looking for a buyer who will stay. However, relocation is a serious possibility. Co-owner Michael Gearon Jr. told The Atlanta Journal-Constitution in February that there is a “sense of urgency” to change the financial setup for a franchise that loses millions of dollars per year and suffers with attendance, and has made the playoffs just once in its 11-year history.
“When they announced [a possible move] there were some shock waves through the dressing room, but, to be quite honest, there hasn’t been much talk about it since,” Thrashers forward Chris Thorburn said. “As far as Atlanta, personally for me and my family, we love it. We made a home here and planted some roots. It would be terrible if the team moved. … To have the threat of moving is disheartening.”
The following is an analysis of the situation, based on wide-ranging interviews with people familiar with the thinking of both the team and the NHL, which ties the future of an Atlanta franchise in part to the outcome of the Phoenix Coyotes:
After a six-year legal battle that resulted in the buyout of partner Steve Belkin, the Atlanta Spirit is without its biggest original investor. The company held a meeting with employees following Gearon’s statements to discuss the fact that a move was a real possibility.
Before and after the statements, several entities, groups and individuals expressed interest in buying all three properties from the Atlanta Spirit: the Thrashers, Hawks and Philips Arena. One potential buyer has met with officials from the NHL and NBA. Some have expressed interest in only the Thrashers. Some have inquired about buying just the Hawks and the arena. There have been non-disclosure agreements signed between the interested entities and the investment company, the Raine Group, hired by the Spirit to search for potential buyers or investors.
However, there have been no serious negotiations beyond that preliminary step to date.
“Nothing is imminent,” co-owner Bruce Levenson told the AJC on Friday. “We continue to be involved in the process of sharing information with potential buyers about their interest in Atlanta. It is an ongoing process.”
Several people familiar with the situation confirmed that the process has not moved past that stage. There is a big difference between expressing interest and having the financial ability to reach an agreement. The possibility of the sale of all three properties, the most likely scenario for the Thrashers to remain in Atlanta, has been described as “one in a million” and “one percent.”
The sale of a professional sports team is a complicated and lengthy process. It took nearly a year to complete the sale of the three properties to the Atlanta Spirit once an exclusive negotiating contract was signed.
The outcome in Phoenix plays heavily on the Thrashers. The NHL took ownership of the franchise, at a cost to team owners of $140 million, in November 2009 when it was rescued from bankruptcy court. The Coyotes, after moving from Winnipeg in 1996, have struggled with attendance and endured major financial losses since the relocation. The league is trying to work out a sale of the team to remain in Arizona. The complicated deal, which involves public bonds, is tenuous. A local watchdog group has threaten to file a lawsuit questioning the legality of the proposal. The league, which has stated its desire not to relocate franchises, is nearing the end of the process of trying to get the sale approved.
A return of the NHL to Winnipeg is likely. The sale and relocation of a franchise would be one way for league owners to recoup their losses in Phoenix.
If Phoenix moves to Winnipeg, the options for the Thrashers -- and perhaps their leverage or value -- would decrease. However, other options do exist as cities such as Kansas City, Las Vegas and Quebec have expressed interest in an NHL franchise.
If Phoenix remains, the options for the Thrashers, and again perhaps their leverage or value, would increase.
Potential investors or buyers likely want to see how the Phoenix situation is resolved. One thing is certain: the clock on Atlanta would start in earnest once Phoenix is settled.
Why the Thrashers? Several other franchises around the NHL are struggling, such as the New York Islanders, Florida and Columbus. Several others are also seeking buyers, such as Dallas and St. Louis. The Thrashers are the next candidate for relocation because they are the most movable by virtue of owning their arena. The team is not tied to a lengthy lease, such as the case in Florida.
The situation may not be resolved, one way or another, by next season. The Thrashers could remain in Atlanta while the search continues or be resolved with a buyer who keeps the team in the city. Or after 902 regular-season games, the team could have a new name and a new city.
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