The Washington Capitals reportedly are one of several National Hockey League expansion teams that have reached agreements with the NHL to reduce considerably the $6 million fee they originally agreed to pay for admission to the league.
NHL president Clarence Campbell and John A. Ziegler Jr., chairman of the board, confirmed reports that two teams have worked out arrangements to reduce their entrance indebtedness to the league and that others are working on similar deals.
A Montreal Star report from New York said that the Caps, who paid a $1.5 million down payment to begin NHL competition in 1974, have arranged to pay off the remaining $4.5 million "for only 30 cents on the dollar. In other words, less than one-half the original price."
"That sounds about right," Campbell told the Associated Press in Montreal.
"It's no problem," the AP quoted Campbell as saying about the reduction in entry fees. "The thing has been in the works a year and a half. One (deal) was completed a few eeeks ago and another was completed about three months ago. There are two others in the works."
Contacted by The Washington Post at his office in Detroit, Ziegler said "I think the information that Clarence gave out is accurate."
Ziegler said that several teams have been "looking for a way to refinance their debt structure, and the arrangements with the league vary with the clubs. Other than that, it wouldn't be fair for me to comment because it's a matter of private negotiations."
When the NHL expanded from six to 12 teams in 1967, the expansion Philadelphi Flyers, Minnesota North Stars, St. Louis Blues, California Seals (now the Cleveland Barons), Pittsburgh Penguins and Los Angeles Kings paid $2 million apiece to join the league.
The price of admission increased to $6 million for the second phase of NHL expansion, the entrance of the Vancouver Canucks and Buffalo Sabres in 1970, Atlanta Flames and New York Islanders in 1972, and the Caps and Kansas City Scouts (now the Colorado Rockies) in 1974.
It is understood that payments by the teams entering the league from 1972 have been suspended by the league, deferred or altered at various times.
Short on talent compared to their more established rivals, msot of the recent NHL expansion clubs have not played like $6 million men and have experienced severe financial problems.
Peter O'Malley, president of the Caps, told The Washington Post on Monday that "we have completed payment in excess of 85 per cent of our obligation to the league." He did not say if that obligation had been reduced from the originally announced $6 million.
"Our payment was deferred for a period of time, but we accelerated our payments effective as of the All-Star Game in vancouver (in January)," he said. "Right now there is no suspension of our payment, and we are current."
O'Malley was not immediately available for comment yesterday on the reports that the Caps' payment had been reduced substantially.