Banks are Pressuring NHL Owners to Settle

Darren Rovell, of, reported on Canada’s Sportsnet Thursday evening (though I cannot find this on the ESPN website) that many NHL owners who own their arenas are up to their eyeballs in debt for those arenas, and the creditors are pushing them to settle. The crack in owner solidarity, should one develop, could very well come from this pressure.

This thesis is consistent with other economic phenomena, e.g. that banks have been the major beneficiaries of financial aid to farmers. If farms go belly up, the banks lose on the loans; but if the farms can be kept alive, the farmers may struggle, but the banks will get their money. The analogy for NHL owners is that if the team goes skates-up, the creditors stand to lose a lot of money. Consequently, the creditors who are most worried about losing the most money are very interested in a quick settlement to the lockout.

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Author: John Palmer

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