May 31 (Bloomberg) -- The Atlanta Thrashers will move to Canada after being sold to Winnipeg, Manitoba-based True North Sports & Entertainment, leaving Georgia’s capital city without a National Hockey League team for the second time.
The sale, which was announced in a news release from the Thrashers and at news conferences in the two cities, comes 31 years after the Atlanta Flames moved to Calgary, Alberta. Atlanta is the only city to lose two franchises since the NHL expanded to 12 teams in 1967.
Winnipeg regains a team after losing the Jets in 1996, when the franchise was moved to Phoenix and renamed the Coyotes. The possible move of that franchise back to Winnipeg ended on May 10, when the city of Glendale, Arizona, agreed to cover the NHL’s $25 million in costs to operate the team for the 2011-12 season.
“We get to be back in a place we wish we hadn’t left in 1996,” NHL Commissioner Gary Bettman at the news conference in Winnipeg.
The Thrashers averaged 13,649 fans a game this past season, ranking 28th out of 30 teams, according to league figures. The team’s problems weren’t limited to attendance.
Atlanta Spirit LLC, a group of investors that bought the Thrashers, the National Basketball Association’s Hawks and Philips Arena in 2004 from Time Warner Inc. for $250 million, has been trying to sell the team since 2009. The group spent 3 1/2 years in a legal battle with former partner Steve Belkin. That dispute hindered the club’s ability to find new investors, Thrasher co-owner Michael Gearon Jr. said.
“We would have welcomed anybody, anybody, that had any sort of financial resource to do something,” Gearon said in Atlanta. “It never happened.”
The sale must be approved by the NHL’s Board of Governors, which will meet on June 21. A 75 percent vote is required to approve the change of ownership, while a 50 percent vote is needed to approve the relocation.
The board’s vote, among other things, will hinge on Winnipeg’s ability to sell season tickets. True North today launched a campaign to sell 13,000 season tickets for the 2011-12 season.
“This is a hockey city,” David Atkins, vice president of investments at Winnipeg-based Cardinal Capital Management Inc., which manages about C$1.6 billion in assets, said in a telephone interview. “The business community here is in a much better position than it was 15 years ago when the Jets left. We grew up a little bit. Everyone’s looking forward to it.”
Gearon, who became emotional several times and had to walk away from his interviewers, said the team had one serious potential investor three years ago who was leery of the Belkin lawsuit. Once the lawsuit was settled in December 2010, the investor was “nowhere to be found,” Gearon said.
“It’s the reality of sports,” Gearon said. “There’s a business side that you eventually hit. When the little sand shaker runs out of sand, what do you do? I’ve worked hard, unfortunately not successfully, to come up with somebody who would come in here with us.”
Financial terms of a sale weren’t disclosed by Atlanta Spirit, True North or the NHL. The Hockey News reported on May 20 that the sale price would be $110 million, with the NHL receiving at least an additional $60 million as part of a relocation fee.
The True North group is headed by David Thomson, a Canadian ranked 24th in Forbes magazine’s 2009 list of the world’s richest people, with an estimated net worth of $13 billion. He is the chairman of financial news and data provider Thomson Reuters Corp.
The Atlanta franchise was valued at $135 million in December by Forbes.
Laura Astorian, a Thrashers’ season-ticket holder since 2008-09, said the NHL did little to help keep the team in Atlanta.
“I think the league is viewing this as an opportunity to finally be rid of these guys,” Astorian, 29, said in a telephone interview. “It’s very silly of the league to dump the entire market down here because of a group of bad owners. It just feels like we’re the sacrificial lamb for the Phoenix situation.”
While Gearon said he had little interaction with NHL Bettman, he didn’t blame the league.
“I can’t fault Gary for not wanting to write checks for us,” he said.
The NHL agreed to move the team only after no buyers could be found to keep the club in Atlanta. The Thrashers have played in Atlanta since joining the NHL as an expansion franchise for the 1999-2000 season. The team made the playoffs once, winning the Southeast Division in 2006-07, then was swept in four games by the New York Rangers in the first round.
Since the year before the Thrashers began play, hockey participation in Georgia has grown 89.1 percent, the third-highest growth rate of any U.S. state, to 2,142 players in 2010 from 911 in 1998, according to registration figures from USA Hockey, the sport’s governing body in the U.S.
The Thrashers compiled a record of 308 wins, 401 losses, 45 ties and 66 overtime losses, an average of less than 31 wins per season.
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