ALSO ON SLAM!
Monday, December 13, 1999
Canucks say economic viability in doubt
VANCOUVER -- He was careful not to make any threats or ultimatums, but Vancouver Canucks chairman Stanley McCammon sent a clear warning Monday that without government tax breaks and increased fan support the economic viability of the NHL team is in question.
"We need to see a light at the end of the tunnel in order to ensure that we can continue in a viable way," McCammon told a shareholders meeting where the Canucks announced they lost $25.5 million Cdn last season.
"It is simply not reasonable to expect any owner of any business to continue in such an adverse situation."
McCammon reiterated that John McCaw, the Seattle businessman who owns the Canucks, is not trying to sell the team. But the losses -- which he pinned on rising salaries, a weak Canadian dollar and high taxes -- reduces the attractiveness of operating the Canucks.
"Whether it's hockey or any other industry, at some point economic circumstances will dictate whether it continues to be a good investment or not," McCammon said.
In Ottawa, the federal government is expected to announce a plan sometime this week to give tax breaks to Canada's NHL teams. Rod Bryden, principal owner of the Ottawa Senators, has said he will begin talks to sell the team to a U.S. buyer on Friday unless the government helps out.
The Canucks have the same tax concerns as the Senators. McCammon said the team pays more than $30 million Cdn in income and other taxes to provincial and federal governments.
The Canucks want about $15 million in tax cuts. This would just about offset the $15 million the team loses each season on the exchange between the Canadian and U.S. dollar.
The Vancouver financial outlook is being further compounded by a 10 per cent drop in attendance this season.
General manager Brian Burke has said that lagging fan support could cost the team the $2 million US it expects to receive from the NHL's assistance fund for Canadian teams. To receive the money, Canadian teams must achieve at least 80 per cent of the revenue of U.S. teams, he said.
The Canucks are owned by Northwest Sports Enterprises Ltd. McCaw's company, Orca Bay Sports and Entertainment, owns 86 per cent of Northwest Sports.
Orca Bay also owns GM Place arena and is currently negotiating to sell the NBA's Vancouver Grizzlies.
In its annual report, the Canucks said team losses are down from $33 million Cdn for the year ending June 30, 1998.
While broadcast and advertising revenues increased by about $7.2 million Cdn during 1999, tickets sales fell by about $5.5 million and the team sold $1.7 million less in merchandise and publications.
The team spent $35 million US on NHL salaries in 1999, compared with $38 million in 1998.
Unlike Bryden, the Vancouver ownership isn't threatening to sell or move the Canucks if tax breaks don't happen.
"I don't want to be perceived as making a threat," McCammon said.
"On the other hand, I think it's important that people understand these issues are real. Consequences do result from these realities and that's what we need to be sensitive to."
While the Canucks are not for sale, that doesn't prevent someone making an offer to buy the team.
"A prudent businessman will always assess the options that present themselves, whether they fall out of a tree or not," McCammon said.
Last summer, McCammon denied reports both the Canucks and Grizzlies were for sale, but said McCaw would entertain any offers.