Thrashers a tough sell

Sometimes a wallflower is a wallflower for a reason: It’s just not very appealing.

That’s one view of the problem facing the beleaguered owners of the Atlanta Thrashers. Try as they might to put a positive spin on the value of their asset, there’s no getting around the evidence that the franchise has questionable value in the marketplace of buyers and investors.

Unless, perhaps, it’s moved out of town.

Some sports business executives familiar with the Thrashers and the NHL say it’s not hard to understand why the club hasn’t yet found either investors or a buyer for the club despite ongoing efforts. The franchise has been a perennial money loser in a market that’s remained mostly uninterested in the product and the sport. The Atlanta Spirit group, which owns the Thrashers, has been trying to sell the team for six years, according to a recent lawsuit, and is losing about $20 million yearly.

Some local hockey advocates suggest a savior could emerge, possibly an Atlantan with deep pockets, civic pride and a hockey Jones.

Such an investor is proving hard to find. Prospects of a financial turnaround at Blueland are outweighed by the likelihood that multi-million dollar losses will continue, observers said. The tough economy makes the odds all the more formidable, though not, some say, impossible.

“The Thrashers still offer a good opportunity for a potential buyer under the right circumstances. Atlanta is a big market with a lot of potential [and] the NHL is doing better overall ...” said Kevin Schulz, a partner on the sports industry advisory team at Milwaukee law firm Foley & Lardner.

The other hope for Atlanta hockey fans is that the team’s fortunes on the ice improve dramatically, giving the city a winner that fans support, putting the club into stronger financial position.

“Atlanta’s a big enough market that if the team does well, it could play to sold-out crowds,” said Larry Grimes, president of the W.B. Grimes & Co. Sports Advisory Group, a Gaithersburg, Md.-based mergers and acquisitions firm that helps broker sports teams.

Grimes isn’t completely upbeat about the Atlanta situation, however.

“It’s just a tough market,” he said. “You just don’t hear great success stories about Atlanta at the gate.”

As of now, one of the franchise’s biggest assets could be its portability. Canadian cities Winnipeg and Quebec are clamoring for a club.

Thus far, the only possible candidate to surface is filmmaker Stephen Rollins, a one-time Atlantan who told the Associated Press this week he was interested in the Thrashers.

Among the reasons cited for the city’s apathy is the inability develop a youth hockey movement, primarily because of the lack of available ice rinks. Participation in hockey in Georgia and the Southeast is up significantly, although the numbers are still relatively small.

The metro area’s transient population and the devoted allegiance to college football also are mentioned.

This year, attendance at Philips Arena has sunk to 28th in the 30-team NHL. Other southern clubs such as Tampa Bay, Nashville, Carolina and Dallas are all drawing better than Atlanta.

NHL teams rely heavily on attendance for revenue because the league does not have the lucrative national television contracts enjoyed by the NFL, NBA and Major League Baseball. Viewership of the sport has always been minimal.

Season ticket sales, critical because they provide guaranteed revenue before the games begin, are low and slipping in Atlanta.

Schulz said a new owner who would keep the team in Atlanta might benefit from improved arena lease terms or broadcasting contracts, if they were renegotiated.

“A depressed franchise can offer a new owner a significant opportunity for future appreciation,” he said. “The price at which the Thrashers [are] offered for sale is obviously key. But if it is priced right, a new owner can come in with his own debt structure and avoid some of the current ownership’s problems.”

Owners have been found for other troubled NHL franchises in Tampa and Buffalo, and reports in those markets so far have been positive.

Whether there exists an investor willing to make the same commitment to hockey in Atlanta is not known, but the signs so far have not been positive.

Said Grimes, “I think we’re going to see that the team is going to be acquired by someone who’s really interested in owning a hockey team first, and the interest in Atlanta is second.”