Gillett juggles options
STEPHEN BRUNT
From Thursday's Globe and Mail
April 8, 2009 at 9:28 PM EDT
It should come as no surprise George Gillett would want to pour cold water on the fevered discussion about when and to whom the Montreal Canadiens might be sold.
No one so shrewd would ever want to be portrayed as an anxious, desperate vendor.
Reached in Liverpool, England, yesterday — in advance of a European Champions League match between the soccer club he co-owns and Chelsea — Gillett offered only a single, familiar, on-the-record response to the story that potential buyers were lining up to make an offer on the Habs in advance of a deadline set for today.
"This is a matter of estate planning," Gillett said. "We're assessing a number of options. We have made no decisions in any direction on any asset. It's much too early to suggest that we have made any decisions, and it would be incorrect."
By estate planning, Gillett means that after turning 70 last fall, he is taking steps to increase his personal liquidity, while at the same time presumably decreasing his debt, in order to protect his family.
That's a whole lot more boring than the fire sale of one of the most storied franchises in all of professional sports in the midst of a global economic crisis. But even if that is the full and complete explanation of what is taking place right now, it doesn't mean the Canadiens will not be sold.
What's unquestionably true is Gillett has engaged bankers to evaluate the Canadiens (of which he owns 80 per cent) and the Bell Centre (which he owns in its entirety), as part of a larger review of all of his assets.
(Investment bankers specializing in the food and automobile businesses have been doing the same thing with the other major arms of his family holdings.)
In the case of the NHL club and the arena, a list of potential buyers was compiled and expressions of interest were invited. Those who stepped up and signed a non-disclosure agreement were provided with details of the business's finances.
The deadline for that process was at one point today, but has been moved back to next week, or the week following.
What happens after Gillett views the list of potential buyers and discussions move on to what the team and the building are actually worth is, to a large degree, contingent on whatever other balls he may have in the air.
He might choose to sell one, or several, of his other assets and retain the hockey team and its home. For instance, with the world credit markets starting to loosen up just a little bit, it's possible some of the global heavy hitters who were interested in buying Gillett's 50-per-cent stake in Liverpool FC, but who backed off when money became tight, are now back in the picture.
There is also still the possibility — which is believed to be Gillett's preferred option — that he could carve off a "strip" of all three of his sports properties (the third is a NASCAR team co-owned with Richard Petty) and sell it to investors, leaving Gillett retaining majority control of his stake.
But there are also some rather compelling reasons why the Habs might be the most attractive property Gillett has in his portfolio right now. He bought the NHL team and the arena, both profitable in their own right, for a relative song in 2001, and would receive a significant return on his initial investment.
And though you wouldn't want to bet your life on the overall financial health of the NHL at the moment, owning a heritage franchise, one of the best brands in all of sport (and perhaps being hailed as a hero for bringing ownership back into local hands) would be an enticing proposition for potential buyers, depending of course on the price.
In the meantime, Gillett doesn't seem to be acting like someone in a desperate hurry to get out of the sports business. He was in Montreal for the game against the Ottawa Senators on Monday. He was in Liverpool yesterday. Today, he was back in the air at dawn, en route to Boston for the Canadiens' crucial game against the Bruins.
No doubt there is also a business rationale for the trip, and no doubt the behind-the-scenes action is fast and furious. But whatever the machinations, Gillett is also going to enjoy playing the fan for as long as he possibly can.
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