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Check Out this Report ..by Bain Capital Co.

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03-11-2005, 08:25 PM
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Mess
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Check Out this Report ..by Bain Capital Co.

National Hockey League can be saved

The Puck Stops Here
The National Hockey League can be saved. Here's how.
By Daniel Gross
Posted Thursday, March 10, 2005, at 1:53 PM PT


When private equity firm Bain Capital Co. and Game Plan International offered $3.5 billion last week to buy the entire National Hockey League, fans, commentators, and team owners were puzzled.

Pro hockey would seem to be a particularly unattractive investment. After all, it ranks a distant fourth in the hearts, minds, and pocketbooks of American consumers and advertisers. TV ratings are rotten. Labor relations are so poisonous that the current season has been canceled.

http://www.slate.msn.com/id/2114660/#ContinueArticle

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03-11-2005, 08:26 PM
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It basically says turn back 10 years of Bettman mistakes and make the league strong again ..

That is something ... A Financial Investment Co.. wants to buy the league for 3.5 Bil and shut down the 10 worst franchises ..

and that is what it thinks is the best direction to make the League profitable ..

When it comes to controlling costs, NHL owners are pathetic. Over the nine-year period, revenues rose 173 percent, but labor costs rose 261 percent. Sure, the NHL doesn't have a salary cap. But neither does Goldman Sachs or the Gap, and they still manage to make money while competing for talent. As this Forbes article points out, NHL player salaries rose because general managers and owners made economically stupid hiring decisions.

According to the Levitt report, six teams lost more than $20 million a year, and 12 lost more than $10 million per year. Shutting some of them down would stop a lot of the bleeding instantly.

Next, install new managers at the teams and make their compensation contingent on turning profits. The problem with the NHL—and with many sports franchises—is that the teams aren't run to make money. Owners of many sports teams generally don't expect, or need, a dividend check from their team each year. Instead, they're happy to take their returns in capital gains, by selling the team to a bigger ego with a bigger checkbook.

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03-11-2005, 08:44 PM
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The way I see it is that if this company buys the NHL, then all the teams would have one owner?

If that is the case, I would rather have the current game than the "new and improved" NHL. Having one owner would make a circus out of this game.. might as well start watching WWE because they have experience at scripting their events.

Also, I don't see the MLSE ever selling the Leafs. This team is too profitable to sell.

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03-11-2005, 08:46 PM
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This was a very good read. I got the same thing out of it that they basically wanted to undo all of Bettmans work and start over. I was watching the score the other day and they had the "what if" show. My personel favorite is, "what if Gary Bettman was not hired 10 years ago". Would we be in the middle of a labour dispute? Or would we be sitting here talking about how exciting the game has been in the last ten years and talking about the Leafs next run at the cup.

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03-11-2005, 09:21 PM
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Thanks for the link! I can't see the leafs being sold.

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03-11-2005, 09:26 PM
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Quote:
Originally Posted by Leafer4Life
Thanks for the link! I can't see the leafs being sold.
While that is what this group wanted to do ..

I think the key here is even if we ignore the buy out ..

The NHL intends to take the league in a completly different direction .. the Investment group say sut down the worst teams and stop the Bleeding and watered down product ..

Bettman want to break up the big market teams to try and save these poor expansion bleeders at the expense of the product .

Two very different suggestions on how to fix the NHL ..

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03-11-2005, 09:31 PM
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Where do people get the idea that Bettman makes all the decisions affecting the league? He needs either owners or NHLPA or both of their agreements to do anything.

Also, he was against the league accepting the last CBA and the owners overruled him.

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03-11-2005, 09:34 PM
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Quote:
Originally Posted by MOGiLNY
The way I see it is that if this company buys the NHL, then all the teams would have one owner?
What would happen is that they would buy the league and then sell off the franchises one by one. They probably figure that they could make enough profit from selling off 20 of them that they could just dump the last 10.

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03-11-2005, 09:38 PM
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Quote:
Originally Posted by mooseOAK
What would happen is that they would buy the league and then sell off the franchises one by one. They probably figure that they could make enough profit from selling off 20 of them that they could just dump the last 10.
Yes, it would be great if the league lost 10 teams.. just think of the talent pool.. but MLSE still won't sell the Leafs to this group no matter how much they are offered.

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03-11-2005, 09:51 PM
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Why doesn't the Toronto Mapel Leafs buy the ENTIRE League?........I mean between the Teachers Pension Fund, TD BANK and other investors that already have ownership of the hockey club I'm sure they have enough capital available to buy out the whole NHL........then this way too Leafs can get rid of those LOUD MOUTHS last week that were telling the Leafs to Shut up.

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03-11-2005, 10:20 PM
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heh imagine the headlines "League Owners Leafs Out In 1st Round"

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03-13-2005, 12:43 PM
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I was not speaking directly of a leveraged buy-out as that concept is neither practical nor realistic as many of these Boys have no intention of parting with their toys ..

However there are plenty on suggestions within the article that I support in my way of thinking that can and should occur during this process for the betterment and the strength going forward ...

The fact that 5 teams contributed to majority of the loss, is an area that needs addressing .. putting a band-aide on these open wounds will not heal the NHL, even if the big market players agree to provide the medication so the wounds can be cleaned and bandaged regularly ... I read recently the putting a Radio Shack in Amish country will not make you a millionaire, but bankrupt very quickly .. and that is the moral of that story for some teams currently in the NHL ..

Big markets that have the population to support a team but that are mismanaged resulting in significant losses, should not be able to hold the Fans, Players and Owners and the NHL hostage as an excuse to support their lack of business understanding and mistakes via excessive overspending of their budgets.

The players are highly paid and are contributing to this financial mess, not directly by their own doing, however they are pricing themselves out of the market .. The focus should be lowering their Salaries and the benefits of that action directly and proportionately affecting the fans at the gates that come to watch them and support them .. You don't have to be an Economics major here for me to explain the benefits of growing the game and stabilizing the losses by providing the financial relief to the fans... allowing whole families to take in games live and more frequently.

Taking the money from Millionaires and giving it to Billionaires that belonged and was obtained from the average middle class person through their blood, sweat and tears is not right .. The article correctly identifies the issue here in that some of these businesses are not designed to make money on a day to day bases but Owners Equity increasing as franchises double and triple in value .. A concept not unfamiliar to people that deal in Real Estate .. Owning a property costs you money in property taxes, fire Insurance and maintenance to maintain, however the yearly losses are insignificant to the bigger picture as market prices rise far faster then interest rates by the bank. Making smart Financial people decisions, resulting in investing rather than depositing of their funds in the bank to earn nominal interest.

The hard cap system requested by the NHL is clouded in the false premises that it is about parity on the ice .. .The NHL is following the NFL model that saw Franchise values double and triple once their Salary Cap was imposed by the courts ... Does anyone for one minute believe that the Billionaire owners care if they can use as tax write-offs the losses of the day to day operations of their teams, in hopes that their $ 100 mil Franchises will soon be worth $ 200 or $ 300 mil in resale value or as capital and collateral to invest in other Money making adventures ..

So the article has many thoughts and concepts and suggestions that could be used to make the NHL better going forward and the answer lies somewhere in the middle for compromise to allow both sides the freedom to exists in harmony and the Fans being the big winners in the long run by both the product on the ice and the cost at the gates ..

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