Bain Group

[Boltsfan2029]

anyhow ... my point really is, if Mr Davidson feels he wants to make an investment in his team by paying for marque names and by his analysis determines that while he will lose a few million on his hockey team, but his overall property will increase in value, he should NOT be prohibited from making that decision.

round and round we go ... thats what a salary cap does. if he felt by paying Jagr, HOlik and Iginla 15million a game each it would raise the value of some other property he owns, then he should be able to do jsut that. at the same time, i dont want to hear him complain about how much his hockey team loses !

Eh, I thought your point was that he was "hiding" money in the arena by not claiming every event as "hockey revenue" whether it has anything to do with the team or not. I'm not sure what the above quotes have to do with that.

BTW, you should probably use a different team for an example of one that would consider paying those players that amount of money. Mr. Davidson wouldn't sign one of 'em, much less all three of 'em. We've dumped players at the end of the last two seasons to meet our payroll restrictions, including being sure we have enough $ left pre-anticipated cap to sign Marty St. Louis. Signing players to obscene amounts of money ain't happenin' down here anytime soon -- and, as long as PS&E owns the team, probably never.

 

[mudcrutch79]

You are correct that nothing prevents the owners from paying you as you describe, nothing but common sense and business acumen.

This statement is asinine. Let's say you run a convenience store. I offer to put a bank machine in your store, but I want you to pay me for it. You're outraged! You point out that I make $1.50 off each transaction. I say yep, and I'll make a $1.50 off each transaction no matter where I put it. There are a hundred convenience stores like yours. The thing is, the bank machine will attract 100 people a day. Every second one of them will spend $5 in your store. I just want $300 a month for putting my machine here.

Will you pay it? Absolutely, assuming you've got no better use for your cash. Same goes for hockey players. Someone buys a team and gets a huge rink in Phoenix. He wants to turn it into a hot spot. He wants an exciting team. He's going to build restaurants and sell condos. If the team is good, he'll make more money doing so. Will he run at a loss on his hockey team if it allows him to make more money outside of hockey? In a heartbeat. This is simple economics. If spending a dollar on X allows for the return of a dollar + ROI on Y, then why does it matter if the two aren't connected on their face? Assuming that there is no better investment available, common sense and business acumen demands spending the dollar on X.

 

[mudcrutch79]

Quick question for you here DR - should the owners get a cut of the players advertising deals? Or maybe take this into account to offset how much salary they are paid? Round and round we go? Sounds like are stuck on a one-way street. It's called give and take, not take.

Seriously, the market accounts for that. Imagine that you're Jarome Iginla, a free agent. You have offers from Montreal and Toronto, but only those two teams. You have no ties to either area, and absolutely zero preference. Money will rule the day. Toronto offers you $10MM a year. Montreal offers you $9.0MM a year. Both deals are for five years. You have two days to decide. You can't believe that you have two days-it's ridiculous, you don't need that time, you're going to Toronto. They'll pay you more.

Then you get a phonecall. A Montreal Mercedes dealer is so happy that you're thinking of coming to Montreal that he'll offer you $1.5MM a year for five years. Once a year, you'll spend two hours at his dealership signing autographs, and he'll use your picture in advertising. That's it.

On those facts, you can maximize your financial gain by going to Montreal, even though the hockey team pays you less money. You make more by being there than in Toronto. The owner is effectively sharing in the money you're generating through advertising because he's getting you at a discount to your value elsewhere.

The truth of the matter is, the endorsement money available to your average hockey player is tiny. It's not enough to make a difference from market to another. If you can make 50K in endorsements no matter where you are, the owner isn't going to be able to get a share in it, because it's not because of being on his team that drives the money. He's not contributing anything to it. The fact that places like Phoenix are willing to pay premiums for players that aren't justified by the money that the hockey operation turns suggests that they're benefitting somewhere else and perceive the players as playing a role in that.

The same principles are in play going each way, it's just that owners perceive players as having special worth in certain markets. Personally, I think that those owners are wrong, but they're billionaires and I'm not.

 

[Brent Burns Beard]

Should revenue from those buildings be a part of hockey related revenue?

i guess id like to say that, i dont care if they count it or dont count it as hockey revenue. I simply dont believe an organization should be prohibeted for using its revenue from those products for the benefit of their NHL team.

dr

 

[Brent Burns Beard]

BTW, you should probably use a different team for an example of one that would consider paying those players that amount of money. Mr. Davidson wouldn't sign one of 'em, much less all three of 'em. .

well, replace TBY with any other team, i was simply using his name and team as an example.

dr

 

[mackdogs*]

I think there's a huge difference between buying up the shares of a company listed on the stock market as opposed to trying to buy out 30 businesses privately owned by individuals.

Matter of fact, I think it's night and day.

Apparently you don't know the intricacies of the recent Man Utd buyout. The major hurdle was not just 'buying up shares' but rather convincing major shareholders to part with their shares. Exactly what Bain is trying to do now, convince the owners to sell their teams.

Regardless, the point remains that people should never say never. But thanks so much for insulting my intelligence.

 

[WC Handy*]

Apparently you don't know the intricacies of the recent Man Utd buyout. The major hurdle was not just 'buying up shares' but rather convincing major shareholders to part with their shares. Exactly what Bain is trying to do now, convince the owners to sell their teams.

Regardless, the point remains that people should never say never. But thanks so much for insulting my intelligence.

There's still a huge difference. The only way this Bain buyout will happen is if they are able to purchase all 30 teams. If they could buy up 5 or 6 teams, then I could see it happening.

 

[Chootoi]

i say we settle it with a shootout, with oversized novelty nets (with red mesh) and on blue ice with orange lines. oh, and smaller goalie gear; we don't want anyone to have an advantage here.... fair and square

 

[Boltsfan2029]

Regardless, the point remains that people should never say never. But thanks so much for insulting my intelligence.

Certainly not my intention. Lighten up.

 

[CREW99AW]

Lisa on mania posted the article below.

I'm not sure which of the 10 most valuable teams or the 10 least valuable teams,would accept Bain's offer,but I can't see the teams ranked 11th-20th accepting.They'd be getting $100m each for teams valued anywhere from $163m-$124m.

Forbes' rankings:
11. Minnesota Wild $163
12. New York Islanders $160
13. Tampa Bay Lightning $150
14. San Jose Sharks $149
15. Vancouver Canucks $148
16. St Louis Blues $140
17. Columbus Blue Jackets $139
18. Phoenix Coyotes $136
19. Ottawa Senators $125
20. New Jersey Devils $124

http://money.cnn.com/2005/05/25/news/newsmakers/nhl_bid/
The Wall Street Journal reports that the bid would pay $2.25 billion for the 10 most valuable teams, while the next 10 would split $1 billion and the 10 least valuable would split $750 million.

 

[StevenintheATL]

Because he who owns the team owns the leasehold rights as the team is the "primary tenant." Sell the team, the building goes with it. There's no way around it, that's the way the deal was written with the county (which owns the building).

Not entirely true. In some cases, the primary tenant is not an NHL team. In many markets, the NBA team is considered the primary tenant. Look at the Staples Center. You think the Kings are the primary tenant? Hell no, it's the Lakers, then the Kings, then the Clippers. Here in Atlanta, one entity owns the two tenants and the operating rights to Philips Arena. Since Atlanta Spirit LLC owns both the Hawks and the Thrashers, they're covered. If someone were to offer buy all of the NHL teams, I'm sure they balk to an extent, but they also hold the trump card, the operating rights to Philips Arena. If the Bain Group were to buy up the entire NHL, Atlanta Spirit could tell the Thrashers to hit the bricks if they wanted to (I doubt it, as 50+ NHL games cuts a lot of $$$ out of to the arena. You can't count on concerts and other short term events to keep money flowing. I'm sure Atlanta Spirit is happy to have the AFL team playing down there [They've averaged 12,714 during the regular season, I've been to Thrashers games with less people than that] to garner some revenue for the arena.).

 

[Boltsfan2029]

Not entirely true. In some cases, the primary tenant is not an NHL team.

All well and good, however, we were talking specifically about the Tampa Bay Lightning. At least, I thought we were.

 

[santiclaws]

Look at the Staples Center. You think the Kings are the primary tenant? Hell no, it's the Lakers, then the Kings, then the Clippers.

Well, corporate technicalities aside, the Kings are the primary tenant at Staples, since their owner, Philip Anschutz (through his corporation, AEG) and not the Lakers' owner, Jerry Buss, built the arena and owns it. Corporate formalities aside, the Kings really aren't tenants at all.

 

[Hunter74]

Man these guys just keep making the deal better and bette for the owners. Talk about possibly sidetracking teh league and cba negotiations. I wonder if this is starting to kinda put alittle fear into the PA??

 

[SENSible1*]

The timing seems a little too convenient to have been just an accident.

IMO the league has been using this a leverage ploy against the PA from the beginning.