1709133867 The problems that doomed the Winnipeg Jets in 1996 are

The problems that doomed the Winnipeg Jets in 1996 are looming again in 2024

The face of the Save the Jets campaign in 1995 was an American forward who landed in Winnipeg, the third stop in his 15-year NHL career. Eddie Olczyk played twice for the first edition of the Winnipeg Jets during this time.

Olczyk's career included stints with many of the great, historic NHL franchises – Chicago, New York, Los Angeles, Pittsburgh and Toronto.

But he'll also tell you that Winnipeg – the NHL's smallest market – can get under your skin if you just give the city a chance. Passionate ice hockey fans. Real hockey climate. A big old barn, the Winnipeg Arena where the Jets played, best known for a huge portrait of Queen Elizabeth at one end of the arena.

Unfortunately, it was this big old barn that was partly responsible for the Jets' move from Winnipeg to Phoenix in the summer of 1996, a difficult time for all Canadian minor teams.

On Tuesday, NHL commissioner Gary Bettman visited Winnipeg, where the Jets 2.0 face many of the same obstacles that contributed to the exodus of the original Jets, which joined the NHL in 1979 as part of a merger with the World Hockey Association.

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However, the main difference between then and now is the building.

Winnipeg, owned by Barry Shenkarow in 1996, was unable to obtain financing for a new building to replace the venerable but aging Winnipeg Arena. Shenkarow had neither the financial resources nor the interest to do it alone, and government support was ultimately not possible at the time.

If there was a determining factor that led to the demise of the original Jets, it was that an arena built in 1955 failed to generate the necessary ancillary revenue, particularly through the sale of private suites, to financially compete in the NHL four decades later.

“The game became very big financially and unfortunately in Winnipeg we were unable to maintain the necessary revenue in this building or find ways to generate it,” Olczyk said. “That was a big reason for dictating what would ultimately happen. That’s what I remember most clearly.”

Today's Jets play at the modest 15,225-seat Canada Life Centre, which was built in 2004, originally to house an AHL team. When an ownership consortium led by David Thomson and Mark Chipman bought the Atlanta Thrashers for $170 million and brought them to Winnipeg, they knew full well that the arena was the smallest building in the league. (It has since moved up to 31st place, behind Mullett Arena in Tempe, Arizona, the Coyotes' temporary home).

But the size of the building was manageable in the Jets 2.0's early days, as they sold out their first few seasons in Winnipeg. If the Jets filled all of those spots again today, they would probably be fine. The building isn't perfect, but for a market the size of Winnipeg it's proven to be perfectly manageable.

According to Chipman, declining paid attendance is the biggest obstacle to survival.

Much of Chipman's lawsuit sounded familiar to Olczyk, a popular national broadcaster on ESPN and regionally with the Seattle Kraken and someone who remains a big supporter of Winnipeg hockey.

According to Olczyk, last season in Winnipeg wasn't about getting people in the seats. The community rallied behind the club, knowing this could be the last and best opportunity to see NHL hockey.

Olczyk described the crowd as “great,” but noted, “The problem was business-related. The help from companies is huge. The year before we left, we didn't know whether the team would stay or go. But then there was the Save the Jets campaign and the fans came out, so we knew we would be back. At that time there was even a feeling that we might stay here long-term.

“But as we got into the season, things weren’t looking good anymore. So when we went to Arizona during the All-Star break (to inspect housing and schools before a possible move), it seemed like it was only a matter of time before it became official.”

The currency crisis

A persistent issue relevant to the Jets' financial woes in both 1996 and 2024 was the fluctuating Canadian dollar. Since Canadian teams generate the majority of their revenue in Canadian dollars but pay their salaries in U.S. dollars, a falling Canadian dollar undermines profitability.

In 1996, partly in response to exodus from Winnipeg and Quebec City to the United States, the NHL introduced the Canadian Currency Assistance Plan, intended to mitigate the effects of a low Canadian dollar.

The program's sponsor was Harley Hotchkiss, then CEO of the NHL and a member of the Calgary Flames' ownership group. The program ran until just before the 2004-05 lockout, and in most years four teams – Calgary, Edmonton, Ottawa and Vancouver – qualified for the subsidy, which was approximately $2.7 million per team per year. The payout was contingent on teams selling at least 13,000 season tickets.

When talking about the Jets' current plight, it's easy to overlook how much the Canadian dollar has slipped since moving from Atlanta in 2011.

On the day the Thrashers were sold to the Jets, the price was a robust 96.86 cents, according to Exchange-Rates.org. On opening day of the 2011 regular season, things looked even better from a currency perspective. The Canadian dollar briefly traded above its face value of $1.04, marking a significant increase in gains in the first few days.

Unfortunately for the Jets, the Canadian dollar has fallen significantly since then, trading at $0.73 this week.

This means that not only have the Jets lost 25 percent of their original season ticket base – from 13,000 to 9,500, according to Chipman's estimate – but they have also lost an additional 25 percent of their revenue compared to 2011, based on the decline in Canadian dollars.

In fact, it is this dual financial crisis that led the Jets to where they are today.

“It just seems to me like it's suddenly going back to the same issues, problems and obstacles that were present in the mid-1990s. It’s just kind of crazy,” Olczyk said.

Shouldn’t the NHL lockout solve these problems?

In 1996, the NHL had no salary cap, or “cost certainty,” as Bettman called it when he fought with the players' association for a hard cap.

At a Board of Governors meeting in December 2001, Bettman warned, not for the first time and not for the last, that the league needed to negotiate with the PA a financial system “that addresses – in the long term – all of the economic problems that we have.” “So that all of our clubs can be competitive and economically viable where they currently are.”

When the players' association finally pushed back against a cap system, the NHL locked them out and kept them out for a full year. This was the first time a North American professional sports league sacrificed an entire season to enforce a labor agreement. Ultimately, both sides agreed on a salary cap system that included, among other things, a revenue-sharing arrangement to support smaller markets such as Winnipeg.

In theory, this salary cap system was intended to ensure that every team could survive in their current market.

This is something Bettman has made a priority throughout his tenure, particularly with the Arizona Coyotes, who have been the biggest drain on the league's overall finances since the implementation of the salary cap system.

It remains to be seen whether the current system, which should give every team a chance to be financially viable, will be enough to save the Jets this time.

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Rising ticket prices

The often unspoken elephant in the room is cost. Olczyk comes from a working-class background and therefore understands that NHL tickets are expensive and that even if people want to go to an NHL game, not everyone can afford to attend an NHL game, or if they can only can do to a limited extent.

“It’s expensive,” Olczyk said. “Everything is expensive, from gas to groceries to schooling and children’s programs. Whether it's leisure or education, there is a limit. There's only so much of the cake. Many families would like to get a package of five or ten games, but they may only manage two or three. You have to make decisions.”

Olczyk ultimately had a successful save-the-franchise moment in Pittsburgh. When he joined the organization as the Penguins' coach in 2003, the team was on financial life support. Just as he was once the Jets' biggest cheerleader, he took on that role again with the Penguins. Olczyk coached the Penguins for 113 games – 82 before the 2004-05 lockout and 31 after, during some of that organization's most difficult times.

“I was glad they were able to stabilize it in Pittsburgh, get a building and see the success they've had over the years,” Olczyk said. “But the danger of leaving was definitely there and I experienced it twice. Once as a player in Winnipeg. And once as a coach in Pittsburgh.”

Meanwhile, the video clip of an enthusiastic Olczyk as the Jets leave town – at one point cheering for the Jets' return – lives on as a permanent fixture on YouTube. Olczyk says two of his best friends in hockey, Glenn Healy and Ray Ferraro, constantly tease him about it.

“I would say it again and do it again,” Olczyk said. “Because it was organic and said with a lot of passion and also a heavy heart. The farewell was very personal for many of us. We have developed a great bond with the community and made many friends there.

“Did I ever think the NHL would return to Winnipeg? Yes, I have. I felt like there could be a correction and that someone like Mr. Thomson and Mark's group would get the jets back. I really liked it there. I still love it. I know eternity is a long time, but this would be great – knowing the Jets are where they're supposed to be.

“I just hope they can figure this out.”

(Top photo of Eddie Olczyk with the Winnipeg Jets: Focus on Sport / Getty Images)