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Would the NHL have been better off under Bain Capital ownership?

The Hockey News

The Hockey News

It was interesting to see U.S. President Barack Obama weigh in on the NHL lockout recently with late night host Jay Leno by saying, “Y’all should be able to figure this out. Get this done.”

Now, in Obama’s defense, it was an (we presume) unscripted question from a viewer. And we can also appreciate that he has a few other more important matters on his mind, such as winning the presidential election on Nov. 6.

But that’s the best he could do? “Y’all should be able to figure this out”? Maybe the guy who bailed out the auto industry and the banks, led the force that killed Osama bin Laden and managed to pass a national health care bill has the right to think this should be easy to settle. But it isn’t. They’re not all stupid. The answer is not to lock them in a room and not let them out until this dispute is resolved. If it were that easy, trust me, the brightest minds in the game would have figured out a way to get it done.

Which brings to mind something that might work a lot better, something that was proposed during the last lockout by the company co-founded and operated by Obama’s rival, Mitt Romney. Remember back in 2005 when Bain Capital made an offer to purchase the entire NHL for $4 billion? The owners, of course, dismissed the notion in a hurry, but you have to wonder now, with a second lockout in full swing and the NHL cancelling games, whether about a dozen current owners wouldn’t have thought that would be a good idea.

It seemed crazy at the time, but a Bain-owned NHL couldn’t be any worse for fans or players or anyone else than what we have on our hands right now, could it? No, and in some ways it would probably be a lot better.

For starters, the money it would have taken to purchase the NHL would have been chump change for a private equity company as large as Bain. It would have been a small part of something much bigger, which would mean that the owner would not have lived and died with every struggling franchise. And as the owner of a single entity with 30 subsidiaries, the NHL would have been in the same situation as a lot of other large businesses. Any company with that many tentacles have branches that do spectacularly well, others that break even and some that lose money. But as long as the business as a complete entity is making money, and we know that it is because every year the league trumpets its record revenues, things would be a lot more stable than they are now.

And there’s almost no doubt a single entity-NHL would be able to keep costs down far better than they are now. The owners’ biggest problem right now is that no matter what kind of collective bargaining agreement they have and what kinds of controls they have in place, they are rarely dealing from a position of strength when it comes to negotiating individual contracts, particularly with star players. You either sign the player on his terms or risk losing him for nothing.

That wouldn’t be the case if the NHL owned all the teams and the league essentially negotiated all the contracts. Do you think for a second that the people who run the NHL would have allowed these salary cap-circumventing contracts to be approved if the teams were all in this together? There’s no way it would have permitted a team such as the Philadelphia Flyers to make its outrageous offer to Shea Weber that Nashville was essentially forced to match, because it’s not good for the league as a whole.

A private equity firm is in the business of maximizing its return. That would mean that, instead of fighting to keep a money-losing team in Phoenix, it would have moved that subsidiary by now to a place such as Quebec City, Toronto or Seattle where it would have immediately become a revenue generator instead of a drag on all its partners. And it would have done the same for the other teams that survive on revenue sharing. The net result would have been more hockey in places where people are willing to pay for it and a much healthier league overall.

And lastly, it probably would have resulted in a more workable CBA. Former NHL Players’ Association director Paul Kelly was right when he said the CBA read, “like the tax code.” The common lament is that the CBA was written by too many lawyers and not enough business people and that if those with business acumen were more involved, there’s no way they would have drawn up a CBA like this one to support their business model.

Like a lot of other things that would improve the NHL, this was a pipe dream. But it’s not one without merit – either when it was pitched or now, looking back seven years later.

Ken Campbell is the senior writer for The Hockey News and a regular contributor to with his column. To read more from Ken and THN's other stable of experts, subscribe to The Hockey News magazine.



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