Tuesday, January 20, 2009

Islanders Moving? Read the Local Newspaper for the Answer

Islanders Moving? Read the Local Newspaper for the Answer

By Evan Weiner

Tuesday, January 20, 2009

12:30 EST

(New York, NY) -- New York Islanders owner Charles Wang wants Nassau County, New York, Hempstead, New York and all others who are required to give approval to his planned renovation of the Nassau Coliseum and something called the Lighthouse Project to give him the okay to move ahead with the rather ambitious development project. The problem is that no one has green lighted the Lighthouse Project and it is annoying Wang.

Owners are accustomed to politicians bowing to their whims and wants and when it becomes public knowledge, sportswriters quickly begin playing the role of being the owners stooges. Sportswriters start to wail about what a raw deal an owner is getting when that owner doesn’t get his way and that politicians better understand that or the community will lose the team to another city that is so desperate to get a team, that they will give a new building’s revenues away. And they could, because under the United States tax law, only eight percent of monies generated inside a publicly funded building can go off to pay the facility’s debt.

In the past week, the Pavlov Dog response in sportswriters has come out in Nassau County, particularly in Newsday, a paper that happens to be owned by a National Hockey League owner, the New York Rangers Charles Dolan, who also happens to be the owner of most of the cable TV franchises awarded to municipalities (Cablevision) in Nassau County and also the Madison Square Garden Network, the company that will be paying the Islanders multimillions of dollars for cable TV rights through 2031. Wang has a deal to develop 150 acres of prime property in Nassau County, the land around the Nassau Coliseum but he is waiting for various approvals and the approvals are moving too slowly.

Wang has not made any public threats to move the team.

Newsday is reporting that the Islanders will play the Los Angeles Kings in a pre-season game next September in Kansas City in what has to be a prelude to the Islanders eventual move to Kansas City. There is a relatively new arena in Kansas City that is controlled by Phil Anschutz’s AEG and AEG has promised Kansas City an NHL or NBA team. So fat that hasn’t transpired and with good reason.

Kansas City can barely support the NFL Chiefs and Major League Baseball’s Kansas City Royals. Most of the corporate sports support in the area goes to the Chiefs and whatever is leftover is spent on the Royals and NASCAR. David Glass, the Royals owner, is always the recipient of MLB revenue sharing. That is not a good sign even when AEG has guaranteed an NHL the lions share of whatever revenue is generated inside the relatively new Kansas City building.

Kansas City cannot compete with Dolan’s cable TV money. So far in all of Newsday’s accounts, there is no mention of that. Could Dolan, whose Cablevision company is not in the most robust shape, be looking to dump the lucrative Islanders TV deal? It is a question worth examining.

The Newsday theory is not limited to an exhibition game. Wang’s Islanders franchise will be conducting training camp in Saskatoon, Saskatchewan next September. Saskatoon is north of Middle America, so the Islanders are establishing a middle Canada presence in order to solidify a fan base in Kansas City. Makes a lot of sense. Newsday has done a feature on AEG’s CEO Tim Leiweke in an article called “The man who wants to steal the Islanders.” Another article is admonishing local politicians by claiming if the Islanders move, Long Island will never get another professional team and another piece dredged up an old Kansas City Scouts player named Guy Charron who thinks Kansas City would be a great NHL market. Charron didn’t provide any proof that Kansas City would welcome an NHL team.

Charron played in Kansas City back in the mid 1970s for the NHL Scouts, a franchise that was moved to Denver in 1976 after just two seasons in the then new city arena. Kansas City could not support an NFL, MLB, NBA and NHL combination then, and not much has changed in over three decades except sports depends far more on corporate spending than the average fan and Kansas City doesn’t have very many Fortune 500 companies or a good cable TV market. But Charron’s thoughts fit the Newsday narrative.

Newsday has done Wang’s work. The threat to move the franchise is on the table and now Nassau and New York politicians have to respond. Wang wants to get his projects started by July.

That is how it works in sports. Sportswriters, who generally are ignorant of government’s role in the sports superstructure, just keep throwing things out there. The Newsday pieces don’t talk much about the fact that Wang has a lease through 2015, the huge cable TV contract that he has and the fact that Kansas City probably is not a good fit for the Islanders. But Kansas City has become a destination city for owners like Rich DeVos of the NBA’s Orlando Magic and the Ron Burkle/Mario Lemieux Pittsburgh Penguins to use as Plan B if they didn’t get new arenas in their cities. It worked in those cases. Orlando and Pittsburgh will have new arenas.

The question of just how Wang’s project will be funded is another question that Newsday has not bothered to explore in the last week either.

Wang is also letting NHL Commissioner Gary Bettman do some of his work as well, Bettman has been pounding on Nassau County officials to get moving because the Islanders building is old and does not produce enough revenues.

The script is old but generally effective. Very few city business and political leaders want to lose a sports franchise. The newspapers raise the threat level forcing the owners and politicians to discuss building new facilities. Most of the time it works, on rare occasions it doesn’t. Seattle, King County and Washington state officials decided not to knuckle under to the NBA or owner Clayton Bennett’s threat to move the franchise to Oklahoma City and let him move last summer after reaching an out of court settlement which allowed Bennett to go and pay off the city which had two years left on a lease between the basketball team and the city.

Wang has five years left on his lease, 22 years left on that lucrative cable TV deal. According to Nassau County officials, no one from the Wang group has told them that the franchise could be moved. The Islanders franchise has been a real estate-TV business for years. The Howard Milstein- Steven Gluckstern group spend $195 million to but the franchise and the cable TV deal from John O. Pickett in 1998 with the hopes of developing the land around the Nassau Coliseum. Pickett, himself, used to pocket most of the team’s cable TV money for himself.

Wang bought the team in 2000. In 2003, Wang and Nassau County Executive Thomas Suozzi first talked about developing the land around the Coliseum and in November 2007, Wang came up with a detailed plan for the Coliseum project.

Will Wang move the Islanders? He can’t until 2015 and needs the team if he wants to develop the property. The New York Islanders hockey franchise came into being because the NHL wanted to keep the World Hockey Association out of the New York market, it became a solely cable TV show by 1983 and helped Dolan keep all of those franchises on Long Island as he could walk into municipalities and say here is our local programming, the Islanders and News 12 Long Island. Now the team is part of a real estate deal. It isn’t about hockey but business and Newsday is just a tool that is part of a business plan.


1 comment:

Ben Arye said...

Over the past few days, whispered threats about an imminent move of the NHL New York (Long Island) Islanders have resulted in dozens of stories in the major media as well as on the blogs. This is the first story that touches on one of the reasons why such a move (at least a move off Long Island) is completely unrealistic (there are other such reasons which aren’t being reported at all.) There is no question that the team needs a modernized arena to play in and this will likely require some level of real estate development entitlements to pay for it. The planning process for this is obviously complicated and local politics and business interests play a big role. However, the Islander fans are being "manipulated" by those whose reporting is superficial by not connecting all of the dots or perhaps by others who are intentionally withholding key facts.