Wall Street Firm attempting to buy....

[Like A Mofo]

Report: Firms make $3B bid to buy

 

NHLNHL

 

3/3/2005

 

A U.S. based Wall Street buyout firm and a sports advisory company have put together a proposal to buy all 30 NHL teams for just over $100 million U.S. a team - a total of more than $3 billion U.S. for the entire league, reports the Globe and Mail.

 

Invited by NHL commissioner Gary Bettman to make their pitch, the newspaper confirmed that Bain Capital Partners LLC and Game Plan International held a 20-minute purchase presentation to NHL owners during the board of governors meeting on Tuesday in New York.

 

The Toronto Star also reported that the two Boston based firms told the league owners that it had also arranged for a large Canadian-based financier to join its efforts.

 

NHL executive vice-president Bill Daly was cautious in describing the level of interest the proposal received from around the governors' table.

 

''I'm not going to characterize it,'' Daly told the Globe and Mail. ''I would imagine different clubs had different feelings. The board listened to a presentation and that's about it.''

 

Daly said the league was compelled to listen to the groups based on the significance of the offer.

 

''When someone's offering over $3 billion, we felt we had an obligation to the board to have them, at least, hear it from the proposed purchaser.''

 

For the deal to go through, all 30 owners would have to agree to sell their franchises to the consortium. The purchase would not be dependent on the NHL reaching an accord with the players, and a sale would not affect the status of the NHL Players' Association as the bargaining agent for players under U.S. and Canadian labour laws.

 

A person familiar with the matter told the Toronto Star no future discussions were scheduled between the two sides.

[Puhonix]

Maybe if they buy it, they can finally put some sense in the league.

[CoachChuckDickerson]

I would imagine this would be the end of the small market franchise.

[Puhonix]

I would imagine this would be the end of the small market franchise.

260154[/snapback]

I dont think so, I think if they but the league, they can control costs, salaries, and place the teams where they will do best i.e. the North and Canada. Small market teams still do good in certain places, as long as there's a draw, I think they'll plce the teams just about anywhere.

 

Of course, what do I know about hockey, I grew up in Miami.

[Like A Mofo]

Of course, what do I know about hockey, I grew up in Miami.

260223[/snapback]

 

 

Gary Bettman thinks you do!!!! Shoot Bettman would have expanded to Mexico City if he had his way!!!

[Puhonix]

Gary Bettman thinks you do!!!!  Shoot Bettman would have expanded to Mexico City if he had his way!!!

260238[/snapback]

New contest: Best name for the "new" Mexico City Franchise.

[EZC-Boston]

I think it is the same way the XFL was going to work...

[Like A Mofo]

New contest: Best name for the "new" Mexico City Franchise.

260246[/snapback]

 

 

 

Mexico City Jalapenos....get locals to play, pay the players and your employees in pesos....rake in US dollars when playing on the road...team would make a BUNDLE

[TigerJ]

Booy, talk about anti-trust issues.

[Puhonix]

get locals to play, pay the players and your employees in pesos....rake in US dollars when playing on the road...team would make a BUNDLE

260283[/snapback]

Player salaries would barely break $100. And that's a good day for them. A friend of mine is mexican in our FFL and his team is the: Tijuana Tomato Pickers.

[Marv's Neighbor]

I think it is the same way the XFL was going to work...

260247[/snapback]

HE CHECK ME?????

[dib]

I tried to buy it on E-bay but I was out bid.

[stevestojan]

Did anyone else think "clusterf--k" when they read this?

[Campy]

Booy, talk about  anti-trust issues.

260287[/snapback]

IBM has offices throughout the world, and all of the employees work for IBM, not the "London Office" or the "Toronto Office" and IBM can assign salary ranges for different positions, contingent upon performance. Below average performers receive lower pay, middle-of-the-road employees receive a salary at the midpoint of their range for that position, and exemplorary employees receive pay at the high end of their salary range. A company I worked for had a similar program and it worked fine. I was in management and while my team was not union, the same program was used in the mid-west where there was unionized labor with no issues or problems.

 

I do not see how the ownership consortium would be in violation of anti-trust laws any more than any other large employer with offices in multiple locations using a similar pay model. In fact, I think this type of arrangement is long overdue in professional sports.

[Guffalo]

IBM has offices throughout the world, and all of the employees work for IBM, not the "London Office" or the "Toronto Office" and IBM can assign salary ranges for different positions, contingent upon performance.  Below average performers receive lower pay, middle-of-the-road employees receive a salary at the midpoint of their range for that position, and exemplorary employees receive pay at the high end of their salary range.  A company I worked for had a similar program and it worked fine.  I was in management and while my team was not union, the same program was used in the mid-west where there was unionized labor with no issues or problems.

 

I do not see how the ownership consortium would be in violation of anti-trust laws any more than any other large employer with offices in multiple locations using a similar pay model.  In fact, I think this type of arrangement is long overdue in professional sports.

260447[/snapback]

So , how do you trade players? you own em all, how effective would Bettman be? Would he even be continue to be needed?

[stevestojan]

This would be the pleasantville of Hockey.

 

EVery team with equal parts talent - generic jerseys.

 

Man, this is at least entertaining.

[Puhonix]

So , how do you trade players? you own em all, how effective would Bettman be? Would he even be continue to be needed?

260463[/snapback]

Keep the system in place now, just eliminate owners. Now GMS are hired and fired depending on how good a job they're doing, and that would continue. Instead of coming from an owner, those decicions would come from NHL HQ.

 

For example, lets say a gM starts a new 5 year contract. For him to keep his job, HQ states that the team must be over .500 for at least 3 of those seasons, and must make the playoffs once. He meets the goals, he gets a raise. He doesn't, buh bye.

 

Players would get the same things (different goals, asst, depending on what pay bracket you are in) Meet the goals or exceed, move up. Dont meet, move down. Same for Head Coaches, with the assistants being hired and fired by the head coach. (Same for GM hiring and firinf the front office).

[Like A Mofo]

So , how do you trade players? you own em all, how effective would Bettman be? Would he even be continue to be needed?

260463[/snapback]

 

 

No commish needed probably...but each team will still be run independently...with GM's scouts, etc...

 

Not sure if I like it though...with 1 owner, can that 1 owner attempt to conspire to have certian teams get certian players?

[OGTEleven]

New contest: Best name for the "new" Mexico City Franchise.

260246[/snapback]

Emmigrante Wannabes.

[stevestojan]

New contest: Best name for the "new" Mexico City Franchise.

260246[/snapback]

 

 

"New Mexico - Cleaner Than Regular Mexico"

[stuckincincy]

Booy, talk about  anti-trust issues.

260287[/snapback]

 

As well as the fact that the NFL plys it's trade in numerous publicly-owned facilities.

[Campy]

So , how do you trade players? you own em all, how effective would Bettman be? Would he even be continue to be needed?

260463[/snapback]

1st off, you're operating under the misguided notion that Bettman is effective now!

 

As far as trades, it'd be simple:

 

Before there was a Sprint PCS, there was Sprint Cellular, and I supervised 5 retail locations for them, which I'll call my team. In each store, which you can liken to a line in hockey, I had different types of employees. I found that having a couple role-players, reps whose sales weren't always in the top 1/3, but I could rely on them to not bend rules and be a consistent performer was important. I also realized that I needed a couple of sales-studs at each location/line to achieve my numbers. Some times they bent rules a bit more than I'd like (like playing one-way and not helping on Defense), but given their production, I could live with that.

 

From time-to-time, a spouse's military transfers, a promotion, an error in judgment of a person's abilities/attributes, or good ol' fashioned attrition, I'd find myself in need of a certain type of "player." I would contact one of my two peers in this market, and ask them to swap person A for person B. Provided my peer agreed to the swap, we asked our manager to confirm the "trade," and then notify the people in question that they would start working at the X office and reporting to Y on Z date.

 

If I was contacted about taking a person, I'd evaluate the personnel I had and made a determination if the person would be a better fit for my team (because I needed different types of personalities and styles to succeed) than the person I was asked to give up. Sometimes I'd agree on the trade, other times I made counter-offers, and sometimes I just weren't interested in having that particular person joining one of the lines/stores on my team. That said, we all received our paychecks from the same company and the pay grades were consistent throughout the "players," consistent upon performance and value to my "team." And given the incentive-based compensation of sales (which could be easily transferred to performance-based incentives for athletes), the "studs" made substantially more (I had a rep making over 100K/yr - the good old days of cellular... ) than the role players who would make maybe 35-50K/yr.

 

It happens all the time in the real world and works perfectly. I believe it would work equally as well in the professional sports.

[plenzmd1]

This would be the pleasantville of Hockey.

 

EVery team with equal parts talent - generic jerseys.

 

Man, this is at least entertaining.

260471[/snapback]

 

I disagree here. I would think if I owned the league, I want a winner where there is money. For instance, I would damn sure make the NY, Chicago and LA franchises some of the best in the league. I can really charge up for tickets and concessions there, and since all revenues flow into the same bucket, thats is where I maximize my profit. Lets not forget that this is a business buying all the teams, in a pure effort to make money. While owners today want to make money, they want to win just as bad. That competivness is what allowed them to get the money to buy a team in the first place. Seems to me teams like the Sabres would become the St Louis Browns of the modern era. As soon as a player was worth a dam, he would be shipped off to a large market team where his value would be more easily exploited

[MarkyMannn]

Maybe Bain Capital Partners LLC could also buy Erie County Government and try running that too

[Campy]

I disagree here. I would think if I owned the league, I want a winner where there is money. For instance, I would damn sure make the NY, Chicago and LA franchises some of the best in the league. I can really charge up for tickets and concessions there, and since all revenues flow into the same bucket, thats is where I maximize my profit. Lets not forget that this is a business buying all the teams, in a pure effort to make money. While owners today want to make money, they want to win just as bad. That competivness is what allowed them to get the money to buy a team in the first place. Seems to me teams like the Sabres would become the St Louis Browns of the modern era. As soon as a player was worth a dam, he would be shipped off to a large market team where his value would be more easily exploited

260564[/snapback]

Only if the teams were managed from a central location.

 

If the teams were managed at a local level (like a non-absentee boss in the corporate world), and if the team's management team had fiduciary incentives to produce a winning/successful team (see my post right above yours), there wouldn't be any way a manager would ship all of his valuables players to other teams for no value in return.

[plenzmd1]

Only if the teams were managed from a central location. 

 

If the teams were managed at a local level (like a non-absentee boss in the corporate world), and if the team's management team had fiduciary incentives to produce a winning/successful team (see my post right above yours), there wouldn't be any way a manager would ship all of his valuables players to other teams for no value in return.

260596[/snapback]

 

Campy the only disput I have is that when selling a product like cell phones, pricing is pretty much the same everywhere. However, in sports, as it realtes to ticket prices, local tv contracts luxuary box revenues, there is a wide varitation by market. Again, profits will roll to one central place. If I bought the NHL, I would look at the LA market and say"how do I maximize my revenues in that lucrative market" If I need to swap a star from a small market team like Buffalo, where a ticket may be 50% less, and my TV money 80% less, I think I will make sure that my LA team is good. Remeber, players slary coming out off the same pot. Another way to look at it. If I can genearte 2X a players salary in Buffalo in terms of revenue, but 10x in LA, where do i want that asset located.

[Arkady Renko]

They already do this in the MLS (have one single owner). I don't follow it. How does it seem to work there?

[GG]

Seems to me teams like the Sabres would become the St Louis Browns of the modern era. As soon as a player was worth a dam, he would be shipped off to a large market team where his value would be more easily exploited

260564[/snapback]

 

As opposed to the system that's in place now? Were Sabres able to keep Peca? Would Sabres ever be in a position to sign Jaromir Jagr in the open market?

 

The Bain proposal is the most logical effort to fix the structural problem of the NHL. The idiots that rule the league (players & owners) don't realize that they are not a major sport anymore and that their competition is not each other but other sports. As WSJ remarked earlier, the hockey season was canceled, but did anyone notice?

[Campy]

Campy the only disput I have is that when selling a product like cell phones, pricing is pretty much the same everywhere. However, in sports, as it realtes to ticket prices, local tv contracts luxuary box revenues, there is a wide varitation by market. Again, profits will roll to one central place. If I bought the NHL, I would look at the LA market and say"how do I maximize my revenues in that lucrative market" If I need to swap a star from a small market team like Buffalo, where a ticket may be 50% less, and my TV money 80% less, I think I will make sure that my LA team is good. Remeber, players slary coming out off the same pot. Another way to look at it. If I can genearte 2X a players salary in  Buffalo in terms of revenue, but 10x in LA, where do i want that asset located.

260614[/snapback]

To refer to my situation with Sprint, I had a budget that I submitted every year. It would be modified and tweaked like you wouldn't believe and then returned to me. I sponsored a little league team, gave pay raises, allocated phones for a battered women's shelter, as well as had line items for pay increases, incentive programs, etc, out of that budget. My peers also had their own budget to spend.

 

Not all of my locations generated the same amount of revenue, but as the money went "upstairs," our expenditure for the year was fixed (by the budget I received). Different locations had different rent pricing, but that was accounted for on a location-by-location basis as a line item and had no real bearing on the amount I could use to operate and promote my 5 locations, my team.

 

I may not be explaining it very well, but the revenue goes upstairs to the coporate HQ, who gives each GM a budget to operate and market their office/team. So the NY teams would get a bigger marketing budget than say a Bflo or a Pitt, but the salary rates could be consistent. And granted, LA or Dallas would get more TV money than Columbus or Calgary as they're bigger markets, but that revenue would go upstairs and in effect be poolled - and in a sense allocated toward each team's budget the following year.

[plenzmd1]

As opposed to the system that's in place now?  Were Sabres able to keep Peca? Would Sabres ever be in a position to sign Jaromir Jagr in the open market?

 

 

260692[/snapback]

 

Good point, and my first inclination is to say with a cap, yes, they would be able to keep more of their players. But even with the cap that was proposed at 42M, Sabres would still not spend to the cap, so your probably right. Just hate the thought of a centrally owned league. Makes me think of Homeowners Associations and all other form of communism

[Puhonix]

Good point, and my first inclination is to say with a cap, yes, they would be able to keep more of their players. But even with the cap that was proposed at 42M, Sabres would still not spend to the cap, so your probably right. Just hate the thought of a centrally owned league. Makes me think of Homeowners Associations and all other form of communism

260714[/snapback]

But wouldn't that be better than no hockey at all?

[GG]

Good point, and my first inclination is to say with a cap, yes, they would be able to keep more of their players. But even with the cap that was proposed at 42M, Sabres would still not spend to the cap, so your probably right. Just hate the thought of a centrally owned league. Makes me think of Homeowners Associations and all other form of communism

260714[/snapback]

 

Think of it as a legal monopoly, similar to the oligopoly that is the NFL. The NFL came to its senses a long time ago that the owners don't compete against each other but for the entertainment dollar of the fan.

 

The whole health of the league is improved if you don't have franchises sucking wind. OTOH, there's not much interest in a league where only 3-4 teams dominate each year. If the NHL is owned by a single entity, you would definitely have more opportunities for smaller market teams to succeed. If anything, the single owner NHL will likely shut down franchises that had no business being expanded, which should improve the leafue as a whole.

[plenzmd1]

Think of it as a legal monopoly, similar to the oligopoly that is the NFL.  The NFL came to its senses a long time ago that the owners don't compete against each other but for the entertainment dollar of the fan. 

 

The whole health of the league is improved if you don't have franchises sucking wind.  OTOH, there's not much interest in a league where only 3-4 teams dominate each year.  If the NHL is owned by a single entity, you would definitely have more opportunities for smaller market teams to succeed.  If anything, the single owner NHL will likely shut down franchises that had no business being expanded, which should improve the leafue as a whole.

260727[/snapback]

 

Still reeks of communism to me .

Thats why I refuse to buy a house where there is a HOA. Give me liberty, or give me a HOA

[Campy]

Good point, and my first inclination is to say with a cap, yes, they would be able to keep more of their players. But even with the cap that was proposed at 42M, Sabres would still not spend to the cap, so your probably right. Just hate the thought of a centrally owned league. Makes me think of Homeowners Associations and all other form of communism

260714[/snapback]

I'm not sure how HOA's fit in to all of this, and I think you meant socialisim (an economic system) rather than communism (a political system), but I do appreciate your point.

 

I look at it this way: On a macro level, the government now regulates trade, but it wasn't always that way. The US had operated under Adam Smith's principles of (mostly) free trade propelled by the "Invisible Hand." Teddy Roosevelt saw that, left totally unchecked, corruption and greed takes over as the poor get poorer laboring to make the rich richer. One could argue that the sorry state of the NHL proves Mr Roosevelt's point.

[BuffaloWings]

As opposed to the system that's in place now?  Were Sabres able to keep Peca? Would Sabres ever be in a position to sign Jaromir Jagr in the open market?

 

The Bain proposal is the most logical effort to fix the structural problem of the NHL.  The idiots that rule the league (players & owners) don't realize that they are not a major sport anymore and that their competition is not each other but other sports.  As WSJ remarked earlier, the hockey season was canceled, but did anyone notice?

260692[/snapback]

I'll agree with GG on the financial part of it - it might just be the best way to fix things for now.

 

However, unless they re-sell the franchises to different owners once everything in place, I can't see this working very well. I doubt we'd see players shipped from a bad small market team to a big market just to get the revenue - that's like all of the Kansas City Royals players getting sent to the Yankees, Mets, or Red Sox.

 

Hey, wait a minute....

 

Nevertheless, that could cause a downward spiral from a popularity point of view. Fans of the Sabres see a good player come through the ranks, play well, help the team reach the point of playoff contention, then get "traded" to the Rangers. As a fan, I'd forget about going to see any games at that point.

 

I'm really not seeing a good way out of this. There will still have to be a salary cap, which they can institute once they own everything, but the logistical stuff would be a nightmare. I'd hope they'd put in provisions to prevent moving players from one team to another for "marketing" purposes and other such antitrust-like measures.

[plenzmd1]

I'm not sure how HOA's fit in to all of this, and I think you meant socialisim (an economic system) rather than communism (a political system), but I do appreciate your point. 

 

I look at it this way:  On a macro level, the government now regulates trade, but it wasn't always that way.  The US had operated under Adam Smith's principles of (mostly) free trade propelled by the "Invisible Hand."  Teddy Roosevelt saw that, left totally unchecked, corruption and greed takes over as the poor get poorer laboring to make the rich richer. One could argue that the sorry state of the NHL proves Mr Roosevelt's point.

260763[/snapback]

 

HOAs fit just cus I hate em, and will take any chance to deride their very existance!

And no, it does remind me of communism, as to me communism means anything bad!

[Corp000085]

his would be the pleasantville of Hockey.

 

EVery team with equal parts talent - generic jerseys.

 

Man, this is at least entertaining. 

 

 

YAY Communism!

 

another plus to this scenerio is that there is a huge player base that is from the former USSR. They'd know the system.

[PromoTheRobot]

This idea of a league owning all it's franchises is not new, and in fact it works quite well! Arena Football started that way. NLL and MILL Lacrosse are all league-owned franchises.

 

The idea makes a TON of sense as far as maintaing operating budgets and salaries. Where it gets foggy is on the competition end. How much "competition" will there be between franchises? Will the league "tweak" competitive balance if a marquee team in New York sucks and the Buffalo franchise is running away with the league?

 

PTR

[Campy]

I'd hope they'd put in provisions to prevent moving players from one team to another for "marketing" purposes and other such antitrust-like measures.

260786[/snapback]

 

Pretend you're the manager of the Buffalo office/team. Like just about every management position I've ever heard of, you have a fiduciary incentive (ie, you make more money) when your team/office performs at a high level - or at least better than the previous year. Why would you send your best personnel to a different team?

 

Obviously, the only way this works is if each team's management has complete control over trades (like corporate hiring and firing) and is incented to dress a competitive team - just like the way GMs are now.

[stevestojan]

What happens if one, two, or ten teams don't sell?

 

I mean this is such a strange offer. Just because they are all hockey teams doesn't mean they could all be sold together? They are owned by individuals. Each owner has to sell, no? And with a number like $3.5 Billion, it seems like some owners would be getting less than they paid for their team. $116 Million per team.