Money Troubles for The Canadiens' Gillett?

League to Gillett: quiet, please

ANDREW WILLIS/The Globe and Mail, May 12, 2009 at 1:38 PM EDT

TORONTO — When speculation on the ownership of the Montreal Canadiens began to overshadow coverage of the team's playoff series against the Boston Bruins, NHL brass sent a message to Habs owner George Gillett.

Try to turn down the volume on speculation on who might buy the storied franchise, National Hockey League executives told Gillett, according to investment bankers working on bids for the team and its home, the Bell Centres.

NHL officials didn't want business stories, including speculation on a sale to new owners from outside Quebec, diverting interest from playoff hockey.

Gillett, already upset with media reports on his personal finances, was glad to comply.

Financial advisers were told to keep quiet. Lists of potential buyers for the team dropped out of the headlines, while the Canadiens dropped out of the Stanley Cup tournament, bowing out to Boston.

The NHL was less successful at keeping fans focused on hockey, as Research In Motion billionaire Jim Balsillie's pursuit of the Phoenix Coyotes now dominates Canadian coverage of the league.

However, banking sources say buyers continue to circle the Canadiens, and Gillett remains committed to a timetable that could see a sale announced by the end of June, ahead of the NHL draft.

The investment dealer arm of Bank of Montreal is running the auction for the 70-year-old Gillett, who refers to the process as “estate planning.”

“There is a real sense that the field is tilted towards a Quebec buyer for the Canadiens,” said one banker working with a bidder for the team.

Quebec Finance Minister Raymond Bachand said last week that the province would be willing to lend up to $100-million to a buyer, with the team expected to fetch between $400-million and $450-million.

The leading contender for the Canadiens is said to be one or all members of a group of wealthy Montreal figures that include the Saputo family, which owns the country's largest cheese maker, media kingpin Pierre Karl Péladeau, Stephen Bronfman and singer Celine Dion. Sources say a second Quebec group, fronted by former Habs general manager Serge Savard, is running a distant second.

There is also an interested consortium of bidders based in Ontario, and a possible buyer from the United States.

All these bidders plan to keep the team in Montreal. The Bell Centre and the Canadiens make up one of the most profitable franchises in the NHL.

I don't get what all the hubub is about. The Habs are not in money troubles, it's Gillett himself that is, and he's looking at all his many assets to see which ones make the most sense to sell now. This happens every day in business as people liquidate assets to free up cash.

I don't think for a second that anyone is worried there will be no buyer...

shabbs wrote:I don't get what all the hubub is about. The Habs are not in money troubles, it's Gillett himself that is, and he's looking at all his many assets to see which ones make the most sense to sell now. This happens every day in business as people liquidate assets to free up cash.

I don't think for a second that anyone is worried there will be no buyer...

It's not the first time Gillett has gotten in financial difficulty. In other news, the Dallas Stars are reportedly also hurting. I think both of these situations are linked to that big Liverpool purchase with Gillett and Hicks.

SeawaySensFan wrote:I think both of these situations are linked to that big Liverpool purchase with Gillett and Hicks.

For sure. They're trying to restructure Liverpool's loans and are having a lot of trouble doing so.

shabbs wrote:I don't get what all the hubub is about. The Habs are not in money troubles, it's Gillett himself that is, and he's looking at all his many assets to see which ones make the most sense to sell now. This happens every day in business as people liquidate assets to free up cash.

I don't think for a second that anyone is worried there will be no buyer...

If the owner of a team is collapsing financially, this usually has a detrimental effect on the cash flow of the assets he owns.

The question is, just how leveraged are the Canadiens? According the Corus Sports in Montreal, Gillett apparently mortgaged the Bell Center to raise cash.

Worried? The Government of Quebec has already pledged financial assistance. Damn right they're worried.

If the club was not bringing in money, then I'd be worried, but the Habs are not the Phoenix Coyotes.

shabbs wrote:If the club was not bringing in money, then I'd be worried, but the Habs are not the Phoenix Coyotes.

When a team is bringing as much as the Habs are, and the owner's still broke, seems that someone should be worried...and apparently, they are VERY worried in Montreal.

We are talking of perhaps as much as half a billion dollars in play...perhaps more if you count the team, the Bell Centre, and related properties and revenues.

As the Globe article states, there are a number of investor groups being put together--and this is happening very quickly to save the situation from becoming a crisis.

Gillet and Hicks took on half a billion in loans alone to buy Liverpool two years ago. They are in a huge hole financially.

shabbs wrote:Gillet and Hicks took on half a billion in loans alone to buy Liverpool two years ago. They are in a huge hole financially.

Maybe Jim Balsillie will help them out

From 'Habs Inside & Out''s Eric Engels, posted May 13:

For those of you who don't know who Graeme Roustan, CEO of Roustan Capital (Mergers and Acquisitions) is, he started "Hockey for the Homeless" back in 1992; a non-profit, charitable event that has seen very wide participation, he was a big part of bringing hockey to San Jose, and put his fingerprint on the sport (or at least it's equipment) with his purchase of Bauer Hockey in 2008, from Nike Bauer.

He is also the Chairman of his own initiative: Roustan United Arena Solutions.

His name should be familiar as Renaud Lavoie of RDS mentioned Roustan's interest in acquiring the Montreal Canadiens, listing him as a potential suitor yesterday RDS here.

A revelation that isn't entirely surprising, given Roustan's appearance on the original list of wealthy business men with ties to Montreal, in line to buy the Montreal Canadiens.

What has been revealed to me by an independent source, very close to the situation, is that Graeme Roustan has a deal in place to buy the Canadiens, pending approval, and that he will in fact be the next owner of the storied franchise, and of course the Bell Centre which comes with it.

Roustan Capital is based in the States, but Graeme Roustan was born in Sherbrooke, Quebec, and as reported by Lavoie, has ties to Pierre Boivin and others in the Canadiens organization.

Things should be come much clearer, possibly even by the end of the week, when the deal could be finalized.

When reached, Deputy Commissioner of the NHL Bill Daly said: "Sorry, We don't comment on potential club transactions."

Interesting. Sounds like they've got things all figured out there now.

It would be a terrible shame to see the Habs leave Montreal just as it would be for any of the original 6. Lets not forget that not too long ago the Hawks couldn't draw flies but thanks to some forward thinking it is taking off quite nicely now.

Cap'n Clutch wrote:It would be a terrible shame to see the Habs leave Montreal just as it would be for any of the original 6. Lets not forget that not too long ago the Hawks couldn't draw flies but thanks to some forward thinking it is taking off quite nicely now.

The Habs aren't leaving Montreal. That's a money-making business. Gillett is just cashing out because of his own personal finances.

Chicago is a hockey market. Even in lean times they have been a successful business. The American midwest is a good hockey market as a whole.

The sale of the Montreal Canadiens appears to taking a few more twists and turns.

RDS reports that communications giant Bell Canada Enterprises is seeking to hook up with the investment group led by former Habs great Serge Savard to buy the team and secure naming rights for the Bell Centre as well.

Their main rival appears to be the Quebecor media group.

More here:
http://www.rds.ca/canadien/chroniques/275170.html

This 2000 article from CBC Sports puts the battle for the Canadiens into another perspective, and shows the battle over ownership of NHL franchises is nothing new.

The article also gives an idea of what's at stake...not only hundreds of millions of dollars, but perhaps into the billions in related revenues...


BCE could be part of group buying Canadiens

Last Updated: Sunday, December 17, 2000 | 8:00 PM ET

CBC Sports

A sale of the Montreal Canadiens hockey club to a group that could include telecom giant BCE Inc. is expected this week.

The NHL team's current owner, brewer Molson Inc., has said it hopes to strike a deal by the end of the month, and recent reports have pegged BCE as a key player in a group that is negotiating to buy the team.

For the Montreal-based telecom, media and Internet company, analysts say the Canadiens would add valuable hours of Canadian content to its media properties, especially sports specialty channel TSN.

Molson and BCE have refused comment about a possible deal, but the brewer has confirmed it's in talks with several possible buyers and hopes to have a deal to announce by Dec. 31. Recent newspaper and radio reports say a deal could come in the next few days.

BCE, which recently won regulatory approval to acquire private broadcaster CTV Inc., has been a leading contender to buy the Canadiens because of its strategic moves in the last year to acquire news, sports and entertainment content for its telecom, media and Internet operations.

While others buy or license the content, BCE is taking over the companies that produce it as it battles arch-rival Rogers Communications Inc. in the rapidly changing world of convergence of telecom, media and the Internet.

In the CTV takeover, BCE also acquired TSN, its rival Sportsnet, a pay-per-view sports channel, and French-language sports channel RDS -- properties that would benefit if BCE acquired the Canadiens.

very intruiging indeed, smart move by BCE on their part if they make it all work.