MONTREAL – The Montreal Canadiens are a good enough deal that the sale of the iconic National Hockey League franchise could spark a bidding war among buyers, even in the current recession, an economist says.
Canadiens majority shareholder George Gillett is currently seeking advice from financial firms in Canada and elsewhere about how he might maximize his holdings, which also includes the Habs’ home, the Bell Centre.
“If there’s more than one buyer, he might have to open bidding on the team,” said Michel Poitevin, head of the economic sciences department at the Universite de Montreal.
“Gillett has put together an excellent organization,” he added, saying the hockey team has “unbelievable” marketing as well as steadfast fan support. Poitevin described the Bell Centre as “one of the best amphitheatres in North America.”
“It’s always fully booked for shows.”
The Canadiens are tight-lipped about any intentions to sell the franchise but media reports say 10 major enterprises have signed confidentiality agreements with BMO Capital Markets to get a look at the franchise’s books.
The potential buyers include Quebec’s pension-fund manager, the Caisse de depot et placement; Guy Laliberte, owner of Cirque du soleil; and Les Productions Feeling, which is run by Rene Angelil, husband and manager of pop superstar Celine Dion.
Others include the Claridge investment house; media giant Quebecor; Joey Saputo, owner of the Montreal Impact soccer team; Roustan Capital; the Molson family; Spectrum Equity; and the Aldo Group.
These are reportedly the most serious contenders among about 50 companies considered by the bank to have a shot at owning the team. Former Canadiens general manager Serge Savard has also said he and a group of partners are prepared to buy the team.
None of the suggested buyers or the bank was talking on Wednesday. Reports say bids have to be submitted by 5 p.m. on Thursday.
Poitevin said price will be a major factor for anyone who bids. If Gillett is strapped for cash, he might settle for a lower price, Poitevin said, but a salary cap for NHL players has allowed more money to go into owners’ pockets.
“When it gets close to the end, I don’t think there will be 10 buyers who will be ready to pay between $400 million and $425 million,” he said. “Mr. Gillett is a good businessman. He won’t let the Canadiens go for nothing.”
Even though they are in a dogfight to make the playoffs, the Canadiens have worth. Last October, Forbes magazine valued the franchise at $334 million, putting it third in the NHL, behind the New York Rangers and the Toronto Maple Leafs.
Bruno Delorme, a sports management expert at Concordia University, noted that the Habs are the only professional North American sports team in Montreal.
“The Alouettes, that’s strictly Canadian football,” he said. “You have the Montreal Impact soccer team – that’s lesser visibility.
“The Canadiens are near a monopoly so that makes things interesting.”
In Quebec City, Finance Minister Raymond Bachand said the provincial government would be prepared to help potential buyers.
“If there is a need for a small, temporary loan – if that is needed by the buyers – then we will be there,” he said.
Bachand confirmed the government has been in contact with BMO Capital Markets, which has been acting on Gillett’s behalf, and it will act in Quebecers’ best interests whatever role it ends up playing.
In 2001, the Caisse and two banks provided loans worth $140 million to help Gillett buy the franchise and the Molson Centre, which has since been renamed the Bell Centre.
Bachand did say he would like to see Quebec-based owners in this centennial year for the Habs.
“I’m sure people (in Quebec) would be happy,” he said.
(With files from Peter Rakobowchuk in Montreal)