Thursday, March 03, 2005


The NHL Collective? Assimilate This!

Even when there are no games being played, NHL teams are selling lot hotcakes (Canucks, Ducks)...

Here’s an interesting story, from, that came way out of left field. It seems that an interested party made a $3.5billion bid to buy the entire NHL at the last Board of Governers meeting.

An investment firm and a sports advisory company reportedly made a joint proposal to buy all 30 NHL teams for as much as $3.5 billion.

Bain Capital Partners LLC and Game Plan International, both based in Boston, made the offer in a 30-minute presentation to NHL owners on Tuesday in New York, sources told the Toronto Star. The companies were invited to make their pitch by NHL commissioner Gary Bettman.
Why would any party want to purchase the ENTIRE NHL and not just one team?

According to Bain and Game Plan, the sale would bolster the league's revenue because all of the teams would work together to generate more local television, sponsorship and revenue instead of competing against one another. The consortium told the NHL owners it had arranged for a large Canadian-based financier to join its efforts.
Although the NHL teams compete against each other on the ice, it’s been the off-ice competition that has really hurt the league.

The Rangers, Leafs, and Flyers can rake up millions from lucrative TV and radio deals plus the high price of tickets that they can charge their customers. These same teams can also afford to sign players at high salaries because they make enough money to be able to do so.

A team in Calgary or Atlanta won’t make the same kind of TV and radio dough simply because of the market they are in. Although the Flyers can afford to sign players to big contracts, the Flames simply cannot. It’s very basic economics.

Now, imagine a wholly-owned league where the revenues were distributed evenly. Each team would be given X amount of dollars to work with (A cap or operating budget), and each team would be on equal financial ground. Teams would work within the framework of the league to increase revenues for the benefit of everyone, and not just themselves. This is akin to a main office giving a budget to 30 different branch offices in different cities. All of the profits go into the whole company, but each branch office is run somewhat indepedantly.

Imagine a league where the central office can dictate rule changes and enforce them without having 30 different owners, GMs, and coaches whining to them about how calling obstruction hurts their feelings. The current structure of ownership, combined with Gary Bettman’s lack of real leadership qualities, allows for the game to be stuck in its current rut because there are too many voices given too much weight in the process. NHL Central Command could dictate ‘CALL THE DAMN OBSTRUCTION!’, and the employees would have to follow the rules.

Of course, this whole idea makes too much common sense...and if it’s too good to be true, if often is.

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

"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.”
Let’s face reality: It’s not gonna happen. The Ontario Teachers Federation is not going to sell its golden pension egg (aka the Toronto Maple Leafs). Many owners enjoy owning a hockey team as a hobby, a tax write-off, or a trophy on the mantle. I can imagine that many of the owners were intrigued, but not all that interested in selling their team.

Still, I’m sure the NHL will somehow use this to their advantage in the current CBA negotiations. Perhaps they can say, "Hey, if we sell all of the teams to one individual party, you are going to have an even tougher time negotiating because you won’t be able to break the owners’ ranks".

Oh...the Czech Extraleague playoff matches are all set. I’ll have a preview in the next day or so. If you have any requests for posts or info, feel free to contact me.

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