Managing Team and League Brands: Diverging Interests in the National Hockey League

Abstract

The purpose of this paper was to explore how conflicts can arise where interests regarding team and league branding in professional sports leagues diverge. We draw from agency theory to explain how a prospective National Hockey League franchise owner, Jim Balsillie, attempted purchase and relocate the team, which represented a bold attempt to use bankruptcy laws to circumvent the contract governing the principal-agent relationship between the NHL and its member clubs. We argue here that, like franchise relocation, branding at both the league and franchise levels should be controlled by the league, as principal, and not any one agent. Thus, the NHL’s efforts to retain control over the location and ownership of one of the Coyotes represent an important step in preserving the ability of the league to manage the NHL as a brand. The conflict between Balsillie and the NHL reveals the unique challenges faced by sports leagues to protect league-wide interests while managing the behaviour of individual teams. By examining branding from both the perspective of individual franchises and leagues as a whole, we gain greater insights into the agency problems inherent in the structure of North American sports leagues.