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Wednesday, December 8, 1999
Owners united behind Bryden
BOCA RATON, Fla. -- There was no shortage of sympathetic ears to listen to Rod Bryden yesterday.
The National Hockey League's governors, all of whom share Bryden's economic views, heard the owner of the Ottawa Senators explain the status of his battle with the federal government to obtain tax relief for his team.
In Bryden's words, the situation is essentially that: "We're either going to get some fairness or we're going to move."
"Fairness" is a word that regularly creeps into political discussions. The NDP often uses it to explain why it intends to take money from those who have earned it and give it to those who haven't. In Bryden's case, "fairness" means that the taxpayers of the nation will cough up about $4 million annually to keep the Senators in Canada.
It was suggested to Bryden that this seems like a relatively small amount to force the sale of a hockey team.
"It is unless you're signing the cheque yourself," he said. "If it's not worth 15 cents to every Canadian, it's not worth four million to me."
For their part, the governors did what they could to support Bryden's stance. They extended the Canadian Assistance Plan (CAP) for four more years, contingent upon what commissioner Gary Bettman called, "a suitable contribution from the stakeholders."
And who might these stakeholders be?"The same stakeholders everybody has been talking about -- the government and all the others."
One of the American governors even insisted that the matter be put to a vote even though it clearly had the support of the board. The governors wanted to show the Canadian government that their commitment is unanimously supported.
In the past, the CAP has been extended on a year-to-year basis, but in this case, the governors wanted to make it clear that they will continue to support the four so-called small-market Canadian teams -- Ottawa, Calgary, Edmonton and Vancouver -- throughout the life of the present Collective Bargaining Agreement. This is a commitment in the range of $70 million, almost $4 million of which will be paid by the Toronto Maple Leafs and Montreal Canadiens.
"I hope the government of Canada sees it for what it was," said Bryden, "which is an attempt on the part of the league to say we really are anxious to do whatever we can to be helpful."
The CAP also helps to protect those teams from being raided by U.S. teams. Under its terms, if an American team gives an offer sheet to a Group 2 free agent from a Canadian team, that team can retain the player by matching the amount in Canadian dollars. The CAP covers the difference between the dollars.
MADE HIS CASE
Bryden made his case well. He said that, in all, the Senators pay $37 million annually in taxes. He said it is a "no-brainer" for the federal government to contribute $4 million in order to save a company that pays more than $17 million in federal taxes annually.
Much of this comes from players' income taxes but there is also GST on everything sold in the building from hot dogs to luxury suites.
It is Bryden's contention that the government has an obligation to cough up because it is the government which has created the economic climate. While many Canadian companies benefit from a dollar that has been allowed to fall into the range of 67 cents US, the Senators suffer from this policy.
"You shouldn't kill a business that is viable at a par dollar," Bryden said, "because other businesses get a discount of the dollar to remain competitive."
But he freely admits that it is this same disparity that makes the sale of the Senators economically feasible.
Because he'll get US dollars for the Senators, the huge exchange rate makes it possible for him to pay off the debt on the Corel Centre .
"At the same time, it creates a problem, it also open the parachute," he said.
When it was pointed out that he'd be stuck with an arena if the Senators move, he said, "Now I'm stuck with an arena and a team that doesn't go."
Bryden said that if the Senators move, he can activate an American Hockey League franchise that he owns, or perhaps acquire a franchise in the International Hockey League. He could also increase the number of concerts held in the building because he wouldn't need to block off so many dates for potential Senators playoff games.
But it does appear that all of this may be irrelevant. The federal government is probably going to come through with the money, which would allow Bryden to have his cake and eat it too.
"My primary interest is still to stay in Ottawa," he said.
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