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ANALYSIS: Mile One freeze-out as hockey exclusivity goes to arbitration

Telegram file photo
Telegram file photo

Edge ownership going to arbitration with SJSE, at least temporarily putting a halt to another group’s ECHL plans

They don’t have a hockey team ready to play out of Mile One Centre any time soon, but the owners of the St. John’s Edge say they’ve been actively seeking a hockey franchise for the facility.

Perhaps they believe that effort should be enough to retain the hockey exclusivity they negotiated as part of the lease agreement that brought the National Basketball League of Canada’s Edge to Mile One last year. Or maybe they are convinced another group that is prepared to bring a hockey team to Mile One this fall hasn’t done enough to challenge and wash away that exclusive right.

Whatever the exact reasoning, Atlantic Sports Enterprises Ltd., (ASE) which owns the Edge, has applied for binding arbitration to determine whether they did indeed lose that exclusivity earlier this month.

In doing so, they have temporarily frozen — and depending on how long arbitration takes, perhaps even shattered — the plans for that second group to bring a minor pro hockey team to St. John’s this fall.

First, the background:

When ASE and St. John’s Sports and Entertainment Ltd. (SJSE), the entity that runs Mile One for the City of St. John’s, finalized a lease deal for the Edge late last summer, it included a clause providing the basketball owners with exclusivity — or first dibs, if you will — on putting a hockey team in the building.

The exclusivity extended until March 31 of 2019, but a sub-clause allowed for a challenge of that privilege. If another group came forward with a proposal to place a hockey team at Mile One, the Edge owners would have a set period of time to show they were ready to act on some sort of similar hockey plan.

In early December a group headed by St. John’s businessman Dean Macdonald and Glenn Stanford, a long-time top executive with American Hockey League teams in St. John’s, officially notified SJSE they were in the position to acquire an ECHL team to begin play in at Mile One for the 2018-19 season.

That triggered the sub-clause and set the clock ticking for the Edge ownership to respond. Originally, their counter was to have come within 30 days, but because the Christmas holiday season fell within that period, it was extended to 45 days. That 45-day period ended on Jan. 22, and the next day, MacDonald notified SJSE this group was prepared to immediately begin negotiations on a lease agreement for an ECHL team, one which, as The Telegram has learned, would be affiliated with the NHL’s Toronto Maple Leafs.

In fact, all that stood in the way of the ECHL formally announcing it would have a MacDonald-owned team in St. John’s in 2018-19 was an in-place lease deal.

However, no negotiations — either formal or informal — got underway. And on Monday, a press release from SJSE confirmed none would begin until the arbitration process has concluded and decided whether ASE/Edge maintains hockey exclusivity — even if they aren’t nearly as far along as the MacDonald group and even if they can’t deliver a team until 2019.

Earlier this month, during a visit to St. John’s, Irwin Simon, the primary owner of the Edge, stated his ASE group was looking to add a hockey franchise to its Newfoundland sports portfolio. However, at the time, it was clear ASE wasn’t anywhere near nailing down a team for the Mile One ice.

In fact, Simon said ASE had been exploring many options, including the Quebec Major Junior Hockey League, AHL and ECHL.

Whether that hockey focus has become more defined in the last few weeks is not known, but there is still no indication ASE is close to reeling in a hockey franchise, and certainly not one that would be ready to go this fall.

Nevertheless, their demand for binding arbitration would imply either one of two things: that Simon and his group believe their attempts to date should be enough for them to retain the right to exclusivity, or that they contend MacDonald’s bid hasn’t met the requirements of the sub-clause.

Whatever the arguments, they will be placed before a yet-to-be-appointed arbitrator.

The parties involved in the arbitration will be ASE and SJSE. The MacDonald/Stanford group will be very interested outside observer, one that will be probably be concerned with how long the arbitration process will take.

On Monday, St. John’s Coun. Sandy Hickman, a member of SJSE’s board of directors, said he couldn’t say when arbitration might begin or how long it might stretch out.

That could be a big problem for MacDonald’s group, since another clock has begun ticking on them. That’s because the ECHL will need to know well in advance whether St. John’s will be part of the league this fall for the purposes of scheduling, conference/divisional alignments, etc.

Even if the arbitrator rules in favour of the city/SJSE and allows negotiations to begin with MacDonald and Stanford, the passage of too much time could make establishing an ECHL team in St. John’s for 2018-19 difficult, if not impossible.

brendan.mccarthy@thetelegram.com

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