NHL’s Reputation Is At Stake In Quebec City

While the NHL is congratulating itself on expanding to Las Vegas, there is a dark, ugly cloud looming up behind them by its rejection of Quebec City. All the many factors that caused the league to turn down Quebec’s bid can be lumped into three general reasons:

1. The NHL’s greedy expansion fee that alienated every potential bidder except fanatical Las Vegas and Quebec.

2. The imbalance between the two conferences.

3. The corrupt policies of the Canadian elites that run Canada that have caused its economy to be weak, leading to a fall in the value of its currency when an external crisis caused by over-production of oil led to a slump in Alberta oil prices.

Part of that corruption was THE factor in causing the NHL to reject the investor, Quebecor’s bid. Quebecor’s principal owner, Pierre Karl Peladeau, an avid supporter of the separatist provincial Parti Quebecois made public, racist remarks about the suitability of anglophone Quebecer Geoff Molson owning the Montreal Canadians, remarks that were offensive not only to Molson but to all the NHL’s Board of Governors Canadian English speaking owners and probably the majority of the American English speaking ones too. NHL Commissioner Gary Bettman had no choice but to turn down Peladeau and Quebecor.

But at the same time the NHL has painted itself into a corner by its rejection of Quebec. In 2010, Commissioner Bettman made a tour of the three cities that lost their NHL franchises in the 1990s, Quebec, Winnipeg, and Hartford and stated reasonable terms for readmission; adequate fan base, good ownership, and a proper NHL arena. Winnipeg is already back and Quebec City tried to fully comply with those terms.

The bottom line is that the NHL did not keep its share of the bargain and pay up. The official reason for turning down Quebec is the decline of the Canadian dollar and the imbalance between the two conferences, but it was probably the prospect of the unsuitable Peladeau at the board table.

They may be credible factors but that does not let the NHL and Bettman off the hook. They told a community to spend nearly $400 million of its tax dollars to build an arena. They encouraged credible investor, Quebecor to be the new team’s owner and took $10 million of its assets. Bettman hobnobbed with the Quebec City mayor, the Quebec Provincial premier, all the important owners and managers of Quebecor plus many other important provincial and municipal officials and encouraged them all the way.

When the business world examined the NHL’s $500 million dollar terms, all but fanatical Las Vegas and Quebec gave a resounding thumbs down. Only those two cities out of 16 potential bidders, kept going to the end. In a list of the value of “Big 4″ franchises, only the Toronto Maple Leafs from the NHL made the top 20. Clearly the business world has said that paying a $500 million entry fee for an NHL hockey franchise has no contact with business reality and would not touch the league with a ten foot pole.

Now how is the NHL going to expand in the future? The business world has said no to a $500 million entry fee. In effect they have said to new Las Vegas owner Bill Foley that he is being conned or fooling himself. They have also watched a credible investor and city, Quebecor and Quebec City be turned down by the NHL despite complying with the NHL’s terms.

If you are the potential owner or mayor/public officials of second Toronto, Hartford, and Seattle, all potential NHL expansion sites, are you going to risk putting up tax dollars and investment capital to get a new arena and NHL team after seeing how Quebec was treated? The NHL cannot get credible investors now. Where are they going to get them in the future after potential investors see this? At the same time, potential investors and municipal and regional authorities have also seen St. Louis which fully supported its football team get stripped of the Rams by the NFL simply because bigger and richer Los Angeles finally agreed to build a $1 billion dollar football stadium. Do communities really want to invest in a professional sports league franchise?

Behind the scenes, Commissioner Bettman is probably trying to find a suitable owner for a new Quebec City team. Most likely it will be French Canadian Mario Lemieux, currently part owner of Pittsburgh who is trying to sell his share in the Penguins. Once that is done, Bettmen is counting on Lemieux to put together a group of investors who will have enough money to front an acceptable Quebec City bid and buy out the management rights to the new Videotron arena that Quebecor owns.

He has to hope this works. The NHL’s and Bettman’s own personal reputation is at stake here in Quebec City. The league cannot afford to alienate communities, politicians and potential investors. Bettman has to find a way to get Quebec into the NHL as quickly as possible. The rejection of a city that tried to comply with the league’s terms looks bad on the NHL, especially to other potential investors now that it has been shown they are going to be hard to come by, even though the reason for rejection is entirely credible.

Neither Bettman nor the NHL is anti-Canadian though many Canadians like to believe it, and the rejection of Quebec is going to add credibility to this ridiculous myth. But the longer Quebec is being kept out of the NHL, the worse this looks. The last thing Bettman wants is for the NHL to get a bad image in the eyes of the public and investors. Right now Gary Bettman is hustling like crazy behind the scenes to resolve this unfortunate situation in a favorable manner. Quebec City will get back into the NHL or it will cost the league plenty in public and business relations.

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