Industry playmakers are casting doubt on Bain Capital Partner's and Game Plan International's $3.5 billion bid for the National Hockey League. Although many would like to see hockey back on the ice, many in the sports-finance world have said they find the offer to be far-fetched. "It doesn't seem likely it will get very far," said Sal Galatioto of Galatioto Sports Partners.
Distribution of funds might be one of the biggest problems. With each owner wanting a fair price, how the Boston partnership plans to put a price tag and compare a New York team with one in Calgary, Phoneix and Florida is an issue, said Galatioto. A Bain spokesman declined comment, but the private-equity firm has indicated that it has a plan to distribute the funds.
Another problem Galatioto cited was the financing itself. "I don't believe anyone is putting up $3.5 billion in equity. If they are not, is it financable?" Mark Ganis, president of Sportscorp, a sports industry consultant in Chicago countered though. "I do believe it is a serious offer from Bain and obviously with Bain's track record, there shouldn't be any concern that they could raise the money."
If the NHL and owners do push forward Bain and Game Plan's offer, Ganis expects the bid to rise. "It's big enough to get the parties' attention but I don't think it's their last offer," he said. "I suspect if the NHL got serious about this and was interested in doing a deal that you would see a number starting north of $4 billion. There is no use in increasing the bid until you know the owners have an interest in discussing a sale price. So far they have indicated they do not."
Regardless industry pros know that the situation with hockey is untenable. "When it is less expensive not to have a season than to have a season, there's something wrong," said
Jeremy Jacobs, Boston Bruins owner and chairman and ceo of Delaware North Companies speaking at the World Congress of Sports conference in New York last week. He has said he would not approve the $3.5 billion offer by Bain.
In terms of the future of the league, Galatioto said, "We don't know what the collective bargaining agreement is going to look like. If [the CBA is] favorable to the owners and fans come back quickly, I think debt will be restructured and everything will be resolved. If not favorable to owners and/or fans don't come back, there could be some problems with franchises."
The question of fans and sponsorship could be critical to the league. Jerry Colangelo, chairman and ceo of the Phoenix Suns said by phone, "I think in terms of fans response, sponsor response, maybe even television response, it will be challenging. Ultimately I believe the support will come back. The NHL has a very loyal following, very much a cult following." At the New York conference, Colangelo said that the league needs to reach beyond this cult following to try and bring in more revenue. Calls to the NHL were not returned.