TORONTO (CP) - It makes sense for Canada's competition watchdog to take a look at the National Hockey League's franchise location policies in light of the possible move of the Nashville Predators to southern Ontario, a competition analyst said Wednesday.
Those policies appear to grant to individual teams, such as the Toronto Maple Leafs, the ability to veto a move by another team to within an 80 kilometre radius of their markets, raising questions of whether that amounts to stifling competition.
"It's an entirely reasonable thing for the Competition Bureau to do," said Prof. Mihkel Tombak, director of the masters of management of innovation program at the University of Toronto.
"Anti-trust authorities in all sorts of other jurisdictions have looked at similar contracts for car dealerships and territories for beer distribution so this is entirely within their purview."
At issue is whether attempts to protect an existing team's turf amounts to an undue restriction of trade and whether that is in the public interest.
For the NHL, the question to be answered is whether the territorial exclusion is reasonable in protecting a team's legitimate economic interests and its owners investments.
Citing confidentiality laws, the Competition Bureau refused to discuss any probe but NHL deputy commissioner Bill Daly said the league was confident it had not run afoul of anti-trust rules.
"We're comfortable that our existing policies and practices regarding franchise relocation are both appropriate and lawful," Daly said.
Last month, Canadian billionaire Jim Balsillie signed a letter of intent to buy the cash-strapped Predators for US$220 million. He is scheduled to meet the league's board of governors later this month to get approval for the deal.
Balsillie, the CEO of BlackBerry manufacturer Research In Motion based in Waterloo, Ont., is said to be keen to move the team to Hamilton, which would put it within the Leafs 80-kilometre no-go zone and close to that of the Buffalo Sabres.
A spokesman said Wednesday Balsillie would not be commenting "until the sale of Predators was completed and approved by NHL Board of Governors."
A spokesmen for the Maple Leafs also refused comment.
"We look at all this as premature," said John Lashway, a senior VP at Maple Leaf Sports and Entertainment.
"We've not heard anything from the National Hockey League formally."
Lashway also refused to say whether the Competition Bureau had contacted the team, calling it "irrelevant."
In light of the overall market size, Tombak said the Leafs could face an uphill battle trying to show that the arrival of the Preds in Hamilton would cost them money or make the teams unsustainable.
"Those are fairly clever guys," Tombak said of owners like Balsillie.
"They wouldn't be putting their teams down into places where it would be unsustainable."
Balsillie, who is currently negotiating an exclusive lease deal involving Copps Coliseum in Hamilton, could argue he would be bringing new investments to the region by moving the team.
He would have the right to move if the Predators do not sell more then 14,000 tickets a game this season.
Predators fans have also rallied to the cause of their team in hopes of seeing enough tickets sold to persuade Balsillie that the team should stay put in Nashville.
NHL commissioner Gary Bettman has called the notion of a team moving from the U.S. to Canada "intriguing," preferably to Winnipeg or perhaps Quebec, which have lost teams.
However, he also said Balsillie had given him no indication he intended to move the Predators.