Reports have been surfacing lately detailing the financial issues that are affecting the Blue Jackets. I have been waiting a while before commenting on this, as I am skeptical that this story isn't anything more than a bump in the road that has been overblown by the media. That said, it could potential be troubling for Columbus. With the recent troubles in Nashville, Florida and Atlanta, and moreso in Phoenix, the issue of ownership and financial loss are at the forefront of off-ice NHL discussion.
To put it in simple terms, here is the issue- the Jackets are reportedly losing approximately $12 million per season, largely due to the lease agreement the Jackets have with Nationwide Insurance, who own Nationwide Arena. Because the arena is privately financed, the Jackets aren't receiving certain revenues that most other teams recieve- these dollars are acquired via parking fees, partial luxury box revenue, and arena naming rights. The Jackets are also tasked with managing the arena year-round. That means they must manage the concerts and other events which use the arena. They are unable to focus solely on the Blue Jackets. The rent that the Jackets pay is apprximately $5 million per year. They are the primary permanent tenant in the arena, so that leaves the Jackets, and any concerts or shows which use the facility with the rent bill. Nationwide is one of the very few privately-owned arenas in the NHL. Most of the other NHL clubs have buldings which were funded with public dollars, which makes it easier for NHL clubs to use them as a home.
John H. McConnell was the man who brought the team to Columbus, and with his passing last season, his majority stake in the team was passed to his son, John P. McConnell. The Dispatch reports that he is willing to sell the franchise if the lease agreement can't be ratified, or another solution is put into play to help stop the bleeding. This doesn't necessarily mean that the team would be moved if sold, but it is a very real possibility. That said, the recent events in Phoenix show that the NHL is dead-set against relocating franchises. They will do whatever they can within their power to keep the team in Columbus, but if local investors can't be found, can the NHL purchase another franchise just to keep it in its current location? (The NHL currently owns and operates the Coyotes, purchasing the team essentially to prevent Jim Balsillie from buying the club and moving it to Hamilton, Ontario)
Changes in ownership happen relatively often, with local groups stepping up and purchasing organizations with the intent of keeping them in their current city. Nashville is a recent example, ditto for Pittsburgh. Discussing a sale of the team however is somewhat premature, as the issue at hand is the lease agreement. Stephen Buser, the Ohio State University professor who wrote the report detailing the Jackets' financial woes, offers up some ideas to help the issue with the lease. These ideas include applying taxes and fees to help offset the operating costs.
Jackets' president Mike Priest had this to say in a Canadian Press Article (Full link at top of page):
"Public partnership in arenas and stadiums has been a critical element to ensuring healthy, competitive sports franchises in markets across the country, including Cleveland and Cincinnati in Ohio, and our priority continues to be to secure long-term financial viability in this great city,"
The issues here are real, and troubling, but this isn't the first time that an NHL franchise has seen high operating losses. I'm confident that the lease agreement can be modified to suit the team, or another solution can be put into place. The Jackets have been great for the city of Columbus, boosting the local economy with the build-up of the Arena District. Businesses have flocked to the formerly barren part of town, and the Arena District itself has been a model for other such developments in cities around the United States. Using the Blue Jackets and their arena as the focal point of essentially a new neighbourhood, with restaurants, bars and other businesses has proven to be a financial boon to Columbus.
Chins up, Columbus- I feel safe that the issues at hand will be taken care of and the Jackets will remain a huge part of Columbus. As the team on the ice continues its upward trajectory, the team will become a true NHL heavyweight, and finally be a shining star on the NHL map, a star that beacons from Columbus, Ohio.
"I have full confidence that we have the support it takes in this town to find a solution,"- CBJ President Mike Priest (Columbus Dispatch Article)