Bain Offers to Buy Entire NHL

[Roguish Lawyer]

http://sports.espn.go.com/nhl/news/story?id=2003701

This is really interesting to me because I am both a big hockey fan and a lawyer for a few firms similar to Bain Capital, including one that included a former owner of the New York Islanders. I had a case a while back involving Bain, not as their lawyer, and I have a lot of respect for the firm. I sometimes will buy stock in companies immediately after news that they have done so just because I trust their judgment. (This is not investment advice -- you will lose money if you ever listen to me. ;) )

Obviously the lockout and negative economic situation the league is in creates a big economic opportunity for a buyer. Buy low, sell high. By merging the ownership of all the teams, you can reduce costs for all teams by cutting redundant marketing and other staff, eliminating intra-league salary competition for players, negotiating local TV and other licensing deals with greater leverage, etc. I think Bain can hit a home run with this if the league goes for it.

The problem is that there is great disparity in franchise values, and I don't see how the owners would agree to slice up the pie if a deal was cut. But this offer is majorly bold stuff, cutting-edge Wall Street genius. I love it!

:munchin

[DunbarFC]

I wonder how the big market owners like Jeremy Jacobs will react to this


And I wonder if Mitt Romney still has ties to Bain. Could be his way to relate to Joe Sixpack - bringing back old time hockey :cool:

[vsvo]

Hmm, this is interesting. I worked for an internet startup funded by one of the well-known NY private equity firms. Yeah, there's some very smart people who work at these firms, and these guys must see a way to get a big return out of this investment. I wonder if they're bringing someone like TD Waterhouse into the deal.

[jatx]

Mitt Romney is no longer associated with Bain Capital.

[magician]

balls.

big ones.

:)

[Roguish Lawyer]

balls.

big ones.

:)

Giant

[rubberneck]

I wonder how they will be able to get around the anti-trust issues? I can see all sorts of headaches of a one owner league. Lots on the positive side but that seems like there would be too many legal hurdles to deal with.

[DunbarFC]

Mitt Romney is no longer associated with Bain Capital.


I was being sarcastic

:munchin

[Roguish Lawyer]

http://tsn.ca/nhl/news_story.asp?ID=116886&hubName=nhl

Owners show little interest in NHL bid

Canadian Press

3/3/2005

TORONTO (CP) - Talk of the National Hockey League's 30 teams being sold to a single owner appears just that - talk.

A firm well known to Wall Street as one of America's most reputable companies pitched NHL owners a proposal to buy the entire league for more than $3 billion US at a league board of governors' meeting Tuesday in New York. But top officials with several clubs characterized the presentation as merely an interesting information session that barely lasted half an hour and won't be given much thought in the future.

''It was an information piece for people to hear what an independent group thought,'' said New Jersey Devils CEO and GM Lou Lamoriello, who also sits on the NHL's board of governors.

''I have had no conversations since we left (the New York meetings) with our ownership about it, nor do I think we will have,'' Lamoriello said, adding that except for several media calls received Thursday about the reports, ''I haven't thought about it.

''You listen, but that doesn't mean you want to sell,'' he said of the presentation. ''Is it something I feel should be considered? Certainly not in my mind.''

The NHL confirmed Thursday reports that the presentation was made by Bain Capital Partners LLC of Boston, backed by Game Plan LLC, a company that helps broker sales of sports franchises. But a source said there are no plans for NHL governors to vote on the proposal and there was no indication the presentation represented a firm offer anyhow.

The proposal, which an official with another U.S. club called ''far-fetched,'' would see all 30 teams run out of a central office, setting team payroll budgets before the season started and distributing revenues to each club.

''It's taking the National Hockey League and its 30 teams and operating it as any large corporation does with each team essentially being a division of one company,'' Game Plan chairman Robert Caporale said on WBZ radio in Boston. ''We would keep in place team management, team presidents, the GMs. They would be completely autonomous.''

But while describing team owners as ''very attentive'' to the proposal Tuesday, even Caporale - whose firm is in the business of drumming up interest in teams up for sale - questioned the level of support it would receive among owners.

The proposal is going nowhere according to Boston Bruins owner Jeremy Jacobs.

''I don't think it's realistic, and I don't think there's much interest, and I know there's no interest on the part of the Bruins,'' Jacobs said. ''And I think it takes 30 (team owners) to do it.''

According to one sports business expert, the NHL should be more concerned about the fact a top U.S. investment firm sees hockey as an industry that can be bought for $3 billion - a weak figure compared to other professional sports.

''What we're seeing now is that the NHL is, in Wall Street parlance, in play,'' said Marc Ganis, owner of Chicago-based Sportscorp, which advises professional sports teams.

Before the work stoppage, the total value of the 30 NHL franchises was an estimated $4.9 billion, according to Forbes Magazine. The Detroit Red Wings topped the list at $266 million, with the Edmonton Oilers last at $86 million. The value of the arenas are part of the assessment.

''It's primarily a reflection of the labour problem. But it's also a reflection of the flagging interest in the sport on television'' in the United States, Ganis said of the $3-billion offer.

The proposal also offers further warning to players that the old NHL and its soaring salaries are gone and that the longer they're locked out, the worse off they may be.

''I think this demonstrates that it may be a very different NHL, and the players might have preferred the days when they might have negotiated with deep-pocketed owners as competitors in a league that was willing to share revenues with them,'' Ganis said.

The idea of a single-entity league is not new. Women's basketball WNBA is centrally owned, as is Major League Soccer, where players are under contract to the league instead of a particular club. The XFL, a brief football rival to the NFL in 2001, was also run as one business under the corporation owned by wrestling guru Vince McMahon.

The NHL even proposed the concept as one of six early offers to the NHL Players' Association in bargaining talks last summer. The union did not take it seriously, mostly because it would conceivably give the NHL even more power than with a traditional salary cap. The league would be able to step in and nullify any deal between a free agent and a club, drastically reducing a player's bargaining power.

Such labour cost certainty would appeal to league owners who cancelled the 2004-05 season over the issue. But imagine trying to determine how to split $3 billion or more among 30 franchises of widely varying values, among them rich teams like the Toronto Maple Leafs who would stand to lose plenty of money under a collective sale.

''One doesn't really know what the value of anything is in sport until you actually complete the sale,'' said Richard Peddie, president and CEO of Maple Leaf Sports and Entertainment.

''But anything that we have seen would support a much greater price'' than the $100 million or so MLSE would collect if funds from a sale were equally divided, he said.

Peddie said it was prudent of NHL commissioner Gary Bettman and chief legal officer Bill Daly to keep owners informed about the fact a proposal, whether it was palatable or not, had been floated.

''As with any management group, when someone floats a $3-billion idea in front of you, Gary and Bill have a fiduciary responsibility to bring it to the board, and that's what they did,'' said Peddie, who attended the board of governors' meeting alongside other Toronto Maple Leafs officials.

''I can't speak for the other 29 teams. But it's of no interest to us.''

Lamoriello said it's not uncommon in any business for purchase offers to be made, and often such approaches are rejected as not being serious enough to warrant discussion.

Bain Capital's presentation wouldn't have been heard ''if it wasn't a firm with their qualifications and their portfolio,'' he said. Bain is one of the world's leading private investment firms with more than $17 billion US in assets under management.

[jatx]

I was being sarcastic

Please define...that word is not in my Klingon-English dictionary.

[DanUCSB]

Owners show little interest in NHL bid

Is single-corporation ownership a good idea? I don't know. But I worry for the NHL. They already have a poor showing on TV, slipping every year... they think they are one of the big-three TV sports (football, baseball, basketball), but they just aren't. And the longer a work stoppage goes on, the more people forget about them. I love hockey as a sport, certainly moreso than the other professional sports, but I'm afraid that the longer they are out of public view, the less people are going to care in the long run.

I just worry about the worst-case scenario: thirty short-sighted team owners reject this bid, every one of them overvaluing their franchise, and continue to bicker while professional hockey goes down the tubes forever.

Oh well. Semi-pro has better fights, anyways. :)

[RAT]

IMHO...

The owners can use this as a ploy to get the players to sign for less than they are asking.

All the owners have to say now is that someone is looking to buy the whole NHL and if you don't work with us all of you will be let go for other younger and cheaper players.

I can see Bain letting go of most of the players who will not sign cheap. They move the teams that are in small markets to larger ones where the population will support the team....

Like you said buy low. Sell high.

Heck I would.


RAT OUT!!!