Bain, Game Plan try to entice owners with buyout plan
NEW YORK -- An outside bid to buy the National Hockey League would allow team owners the chance to maintain a stake in the league, according to people close to the deal.
The provision is added incentive for team owners mulling a bid by private equity firm Bain Capital and investment firm Game Plan International to buy the 30-team league for $4.3 billion.
A spokesman for the NHL declined to comment on the deal on Wednesday.
Bain and Game Plan's offer seemed far fetched at first, with details scant and many league followers doubting that all 30 owners would agree to sell.
But stalled player contract negotiations, which forced the league to cancel the 2004-2005 season, remain at a standstill, fuelling frustration levels between players and owners.
Add to that the ability to retain an equity stake in the league, and Bain and Game Plan's buyout offer may not appear so outlandish to owners reluctant to sell.
"Every day a deal is not reached, more and more frustration builds up. I suspect there will come a time when the owners will throw up their hands and say 'we've explored all the options and they're all bad,'" said Marc Ganis, president of Sportscorp Ltd., a Chicago-based sports advisory firm.
"Bain is offering a very interesting and, perhaps, very attractive offer."
The equity provision says team owners can apply a portion of their team's agreed upon value to a pro rata share of the equity of the new entity under Bain and Game Plan, according to people familiar with the deal.
That in turn would provide middle ground for owners unwilling to sell their team outright.
In short, an owner has the option to sell and take the cash, or take a portion of the cash and invest it into the new league.
Last year, Forbes magazine valued the league at $4.9 billion.
The Bain-Game Plan buyout separates the value of teams, located in both the United States and Canada, into three tiers. Ten teams are in the top tier, valued at $2.25 billion, nine teams in the middle at $1 billion and 11 teams at the bottom at $750 million.
Further details of the tiers are not yet available and teams have not agreed on their value.
"We continue to have interest in purchasing the league. We've significantly upped our offer and we're waiting to see what the next steps are from the NHL," said Game Plan President Randy Vataha.
A Bain spokesman declined to comment.
At the center of the NHL dispute is the owners desire to cap players' salaries. Both sides have failed to reach an agreement.
News spread in March that Bain's managing partner, Steven Pagliuca, who co-owns the National Basketball Association's Boston Celtics, pitched the NHL with the buyout offer along with Game Plan.
With all 30 owners needing to sign off on a deal, sports franchise experts are not confident a sale will go through.
"It's a real long shot. You have anti-trust considerations, cross-border issues, and valuation issues," said Salvatore Galatioto, a former Lehman Brothers sport finance banker, who recently started the Galatioto Sports Group. "You'll have owners who won't sell. Teams means more to them than dollars and cents."
Copyright 2005 by The Associated Press
MORE NHL HEADLINES
- Kunitz, Crosby lead Pens to 6th straight win
- Kings' Jones keeps win streak going vs. Sharks
- Miller lifts Sabres to rare 2-game win streak
- Flyers stun Jackets on Giroux's 2 late goals