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Leafs for sale (cont'd).....

cw said:
He made one big mistake with the Leafs: cutting Quinn loose when he did and hiring JFJ. At the time of the hiring, they did a professional search and not much was out there. So the chances were higher that he'd hire a bonehead of a GM. And he hired a bonehead GM before Colangelo for the Raptors.

JFJ was not seen as a bad GM candiate when he was first hired.  He had a good reputation around the league.  He proved through his actions as GM that he didn't know what he was doing.
 
Rebel_1812 said:
JFJ was not seen as a bad GM candiate when he was first hired.  He had a good reputation around the league.  He proved through his actions as GM that he didn't know what he was doing.

None of that makes it any less of a mistake.
 
No guarantee Bell will get to keep Canadiens stake
Montreal ? There is no guarantee that Bell Canada will be successful in keeping its minority stake in the Montreal Canadiens following the company?s announcement Friday that it is buying a 75% ownership position in Maple Leafs Sports and Entertainment with telecom rival Rogers Communications Inc.

Bell has formally indicated it intends to hold onto to its 18% share of Montreal?s National Hockey League franchise, which it bought in 2009 as part of a takeover of the storied team by the Molson family. But it needs approval from the league?s board of governors for the MLSE purchase, which includes the Maple Leafs. And that process has not yet begun.

Article 13 of the NHL Constitution prohibits the acquisition or holding of an ownership interest in an NHL team by persons having ownership interests in ?one or more other member? teams, according to a copy of the rules posted by hockeybuzz.com.

The board of governors can grant a waiver, however. And in the past, these waivers have been awarded as the league deems appropriate.

Bell will have to negotiate that with the league.


A short term easy work around most would accept because the CBA reveals financial results for teams is by next summer, Bell, if they have a director on the Habs (likely), would remove that director and become a silent partner.

I still think this is just interim PR so they do not devalue selling their stake.
 
MLSE staff excited by move
Anselmi said the next hurdle is to find a replacement for MLSE president Richard Peddie, who is stepping down at the end of the year.

?I think is hasn?t been something that?s been on the table lately, but obviously it?s going to have to be the next priority for the board,? Anselmi said. ?They?re going to get about doing that and make the right decision.?

Anselmi was asked if it is a job he still covets?

?Well, who wouldn?t be interested in this job?? he said. ?We?ve got a job to do right now, we?ve got a management team that?s got a lot of work to do, including getting through the closing part of this thing.

?We?ll see what happens.?


With new ownership, new management usually follows. I expect they'll put in a new CEO.

The GMs of the clubs wouldn't necessarily follow that pattern given the corporate nature of this deal but often do.
 
Saint Nik said:
cw said:

I really hope they put their top investigators on the question of whether or not the two biggest telecom companies in the country being in bed together will negatively affect competition.

BCE & Rogers to the CCB: As the article in the Globe & Mail reports, we seriously arm wrestled over how to divvy up the broadcasting rights when we bought MLSE. It was the most intense arm-wrestling competition either of us ever experienced! It there had been any more competition, we might have broken an arm!

I'm glad I don't have to answer those questions with a straight face. I'm sure they have some sort of a plausible legal angle or they wouldn't have proceeded. Wouldn't surprise me if the legal brief on that was tougher to put together than splitting the broadcasting proceeds down the middle.
 
cw said:
Just grabbed a chunk of the article. Nothing meant by the edit.

That's Forbes take and they're all about measuring the money. Peddie was about money too.  He spent dough -- and what else could he really do?  It was a key part of his job and a key duty to those who employed him. But I don't think he wanted what happened to transpire. He wanted a winner like the rest of us.

Since taking over in 2003, what resources did Peddie not provide for the Leafs to win a championship? They spent plenty on payroll. Moved the Marlies. Built a practice facility. Substantially increased management staff and scouts. Etc. There was no asset any other team had in terms of resources that Peddie & MLSE would not provide their GM.

He made one big mistake with the Leafs: cutting Quinn loose when he did and hiring JFJ. At the time of the hiring, they did a professional search and not much was out there. So the chances were higher that he'd hire a bonehead of a GM. And he hired a bonehead GM before Colangelo for the Raptors.

But I think that was more of an error in judgement and control than it was motivated by trying to save MLSE an almighty buck.

What he did for the OTPP to make them the mountain of dough he did will probably wind up in sports business school curriculum - which was his Stanley Cup on the business side.

But for the rest of his life, imagine the grief he has taken and will continue to take for failing to win with the Leafs or Raptors. He has more money than he knows what to do with for his "retirement". I bet he'd pay millions out of his own pocket if he could avoid that grief for the rest of his life.

So I don't entirely buy Forbes take. Peddie failed to deliver a winner and I think there are limits to how much it meant to him personally to make a few million more vs going out a winner.

Yeah, I was just teasing about the edit.  I actually didn't have too many problems with Peddie.  I'm not even sure I'd say the JFJ hiring was a cheapskate move.  At the time he looked like an up and comer, a potentially fresh direction.  That it turned out largely a failure is too bad but I can see the rationale.
 
Burke's comments on the sale of the Leafs:

http://www.tsn.ca/toronto/blogs/jonas_siegel/?id=382318

(Right hand side look for "Leaf Report: Brian Burke Brian Burke discusses the sale of MLSE to Bell Media and Rogers.")
 
The real reason why Teachers divested itself of MLSE now..

http://ca.finance.yahoo.com/blogs/insight/teachers-mlse-sale-perfectly-timed-163248689.html

The reason for selling is simple: it's high time for the teachers to cash in. The plan bought its stake in MLSE 17 years ago for $180 million. With retirement rates expected to increase over the next few years, liquidity is the name of the game and there's no better means of achieving it than by selling off the jewel in the crown.

A Forbes Magazine report last week that named the Maple Leafs the most valuable NHL franchise ? worth $521 million U.S. ? reinforced the value proposition and accelerated the push toward a final deal. The teachers got their money out as the market value was peaking, while the broadcasters saw this as an opportunity to leverage their power in media and properly ownership to increase
the relative value of the MLSE holdings.

All this comes as the fund faces an historic cash crunch. Its chief executive, Jim Leech, said earlier this year that the plan faces "systemic funding problems" due to shifting demographic trends. Longer life expectancies, low interest rates and continued economic uncertainty have all contributed to a funding shortfall that topped $17 billion in April 2011. The plan pays out $1.8 billion more annually than it takes in in contributions. Its sponsors, the Ontario Teachers' Federation and the Ontario government, are mandated to eliminate the gap by 2012.

Within this broader context, the teachers decided playing games had to take a back seat to cashing in.

 
One crappy thing that's come out of this is the radio broadcasting rights going to TSN  1050... I often catch the post game in the car and once I get close to HWY 9, the signal gets really bad.  :(
 
Hmmm, first I heard of that. Either way, I still get hosed hald the time... Unless they do something about their signal strength up here.  :-\
 
On the question of ownership stakes in more than one team:
Winnipeg Jets co-owner David Thomson owns a small percentage of the Canadiens with the Molson family (reportedly $20 million of the $575-million purchase price), but in order to appease the NHL board he now is a non-voting member of the Canadiens ownership group.

Thomson helped make that deal happen much like TD Bank bought a small stake in the Leafs to help Stavro in the early 90s as part of the exchange for financing $66 mil of the original deal. Bell helped out on the Habs deal as well.

I've seen this in some US deals over the years.

The NHL can't afford slap these guys with deep pockets or hurt their original investment when they step up to get more deeply involved. No league in their right mind would.

So the arms length/non-voting (and probably no attendance of the board meetings) arrangement deals with the conflict of interest pretty well until they can find someone to take the shares off their hands rather than risking getting hammered by being forced to sell now.

It seems like a perfectly reasonable solution to me and that's what I'd expect the BoG to do if Bell can't unload the shares before the deal closes June 30, 2012.

When the economy picks up and the Habs start to increase in value at a better rate, they'll probably have no problem unloading those shares for a decent return on their investment.
 
Damien seems bothered that CBC did not give the sale of MLSE any airtime.


DamoSpinDamien Cox
Incredible. Not one word on HNIC pre-game abt impact of $1.3b MLSE sale. Textbook definition of making oneself irrelevant.

DamoSpinDamien Cox
A truly bizarre performance by CBC. Kinda sad, really. Its like they're trying to make some kind of quirky point, pretending news isn't news

DamoSpinDamien Cox
What was the big news that CBC led pre-game with? That Nick Foligno has "learned" to score. Uh, okay.

DamoSpinDamien Cox
Actually, its like they're trying to make a statement to the rest of the country that the Leafs really don't matter if they're not playing.
 
Fanatic said:
Damien seems bothered that CBC did not give the sale of MLSE any airtime.


DamoSpinDamien Cox
Incredible. Not one word on HNIC pre-game abt impact of $1.3b MLSE sale. Textbook definition of making oneself irrelevant.

DamoSpinDamien Cox
A truly bizarre performance by CBC. Kinda sad, really. Its like they're trying to make some kind of quirky point, pretending news isn't news

DamoSpinDamien Cox
What was the big news that CBC led pre-game with? That Nick Foligno has "learned" to score. Uh, okay.

DamoSpinDamien Cox
Actually, its like they're trying to make a statement to the rest of the country that the Leafs really don't matter if they're not playing.

Prior to the games, the focus is usually on the games they're about to show. The business stuff usually gets taken up during Hot Stove.

They did take it up during Hot Stove though it was pretty short - rushed at the end - about a second team in the Toronto area being more likely with Rogers-Bell as broadcasting owners.

Cherry also took it up briefly on Coach's Corner praising MLSE's Anselmi to replace Peddie.

CBC did issue a press release on it. And one of the stories I quoted above was a CBC story.

Here's some CBC stories done on the sale (maybe not all of them):
Why Rogers and Bell bundled together for MLSE
ANALYSIS: MLSE deal all about eyeballs
Bell to keep Canadiens stake
Common questions from MLSE sale
Multi-company ownership not new for Leafs
Rogers, Bell buy control of MLSE
Rogers, Bell buy control of MLSE
Hockey fans react to Bell and Rogers buying Leafs

CBC also covered it extensively in their broadcast news on TV. It was the lead story and still is on CBC business site and CBC sports site (for a while) on their website. Both stories remain on their respective front pages.

I don't know how much one can fault HNIC's coverage when it's pretty obvious Rogers-Bell will be going after those Saturday games when they come up for renewal.

In my opinion, the CBC did a much better job covering the sale than Damien's own paper.  ::)

F Damien.
 
cw said:
Fanatic said:
Damien seems bothered that CBC did not give the sale of MLSE any airtime.


DamoSpinDamien Cox
Incredible. Not one word on HNIC pre-game abt impact of $1.3b MLSE sale. Textbook definition of making oneself irrelevant.

DamoSpinDamien Cox
A truly bizarre performance by CBC. Kinda sad, really. Its like they're trying to make some kind of quirky point, pretending news isn't news

DamoSpinDamien Cox
What was the big news that CBC led pre-game with? That Nick Foligno has "learned" to score. Uh, okay.

DamoSpinDamien Cox
Actually, its like they're trying to make a statement to the rest of the country that the Leafs really don't matter if they're not playing.

F Damien.

You're the best CW :)
 
Someone is likely to raise this so I'll get it out of the way:

When a sale of a company takes place with a future closing date (June 30th year end) - which is very, very common for accounting reasons, until the sale closes, the existing board of directors cannot make a significant financial move without getting authorization from the new owner(s). For example, they cannot spend a bunch of dough on a new asset or fire a key manager without such approval. It stands to reason because those decisions can affect the future financial performance of the company.

If Burke were to come up with a significant trade for example, involving many millions of dollars or trading away a significant talent, rather than just getting the current board's approval, he will have to get approval from the new owner(s) as well.

This isn't a problem because they're incorporated and not owned by a single owner as the same requirement of approval by a single future owner would apply.

I don't see this as a very significant thing. The tone of the new owners seems to be hands-off with their hands-on interest in the broadcasting side. It's very likely procedures that are in place with the existing board for quick decisions on making trades will be mirrored with the new group because it is a part of doing sports business, etc. With Burke's self imposed trade freeze, they have a couple of weeks to set that up if it hasn't been done already for the Raptors.
 
Sarge said:
I'd have assumed the new board would have already given Burke carte blanche.

He probably has as much autonomy as any GM in hockey and that autonomy probably got rubber stamped by the new group but these guys always seem to have limits. An extreme example would be Lamoriello signing Kovalchuk - no way he did that without getting approval from the Devils ownership.

They have budgets and freedom to operate within those budgets as a method of preauthorization. But they nearly always have (based upon years upon years of media reports/interviews/PCs) some limits on transactions where the owners want involvement or maybe approval for trading 1st rounders/franchise assets and certainly face of the franchise type players.

Burke makes reference to some of the approvals OTPP made in this recent interview/PC on the sale:
http://podcast.tsn.ca/tsnradio/Burke%2012-9.mp3
He mentions that the OTPP approved spending to the cap every year but they also blessed spending more outside of the cap on more management & scouts for example. A bunch of those approvals would have been given when he presented his plan for the following season at year end. But whenever a circumstance comes up where he wants to deviate materially or substantially from that plan during the season or big bucks are involved, he's very probably got to run it past them.

Peddie talked about some of the planning they do including the sports clubs in this interview:
http://www.fan590.com/media.jsp?content=20111209_170929_10844
He stressed that not only do they plan for the following season but unlike a number of sports teams, they expect a planned vision for a few years down the road - a rolling forecast if you will.

In year end reviews, then the GM must account for why things this year didn't go according to his vision of three years ago for example. If the GMs explanation for falling short isn't any good, it's clear to all parties from the GMs own words from three years ago that he must move on. He's held accountable as he should be like any other manager who falls short.

Pat Quinn talked about OTPP and Stavro as well saying, like Burke, he'd never been turned down.  Even when some deals may fall within a pre-authorized mandate, as a professional courtesy or when there are shades of grey in a transaction with respect to that mandate, both men would run it past their owners. They've said or hinted as much when they've spoken about transactions.

When Rick Dudley wanted to trade LeCavalier from Tampa Bay, his owner stopped him. How many times have we heard Flyers GMs over the years thank Ed Snider for his approval of more excess spending and on specific deals - even into the cap years?

If Burke wanted to trade Phil Kessel for a 1st, 2nd & 3rd round pick, I'm very confident Burke would have to run it past his owners because not only would the current face of the franchise be heading out the door but that would constitute a significant deviation from the 'retooling' plan closer to a rebuilding plan - even though it didn't result in spending bags of money.

An obvious key issue the CBA addressed was overspending on payroll. But a significant side benefit of Levitt's model that hasn't been talked about was that all teams wound up with an accounting structure of revenues and expenses. That provided a league wide framework for better financial management of the clubs and the owners with better controls (day to day, month to month and year to year) over the management (pre CBA mismanagement).

So in my opinion, there's nothing sinister going on here. It's pretty normal and solid business practice.
 

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