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Bain, Game Plan try to entice owners with buyout plan

6/8/2005

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."