Tuesday, April 7, 2009

Everyone in the ownership pool

If I'm George Gillett and I know I have no intention of selling the Montreal Canadiens, then I'd speak up right about now.

With La Presse reporting today that a group of 20 Quebec businessmen led by Jean-Sébastien Besner are trying to arrange an agreement where 30 per cent of the team would be sold to the public, with shares going for $100 a pop, and that Hall of Fame defenceman and former Habs GM Serge Savard would be ready to buy the club at the drop of a hat, this lingering doubt over the future ownership of the club risks becoming larger than life.

I was surprised to hear about Savard's interest because, quite frankly, I didn't know he had that kind of dough. I know he's made some money in the hotel business, but if he were to buy all of Gillett's 80.1 per cent share of the Canadiens it would probably cost somewhere in the neighbourhood of US$270 million, based on Forbes magazine's estimate on the value of the team.

Savard says he can get the money, and that he'd be ready to buy whenever Gillett gives the green light. If that's actually the case, then I couldn't imagine a better owner for the club considering his history with the Canadiens. The question would be whether or not Savard would be able to take a hands-off ownership approach the way Gillett has, but then again Savard does know what he's talking about, so maybe his input wouldn't be such a bad thing.

I'm not sure I could say the same about Jim Balsillie.

The Besner idea is a little more out there, but still interesting. As Vincent Brosseau-Pouliot points out in his piece, the Green Bay Packers have functioned quite well as a publicly-owned team, and this proposal wouldn't even be going that far. Besner's plan would see Gillett remain the managing owner with a 50.1 per cent share of ownership. Molson-Coors would maintain its 19.9 per cent ownership, and the remaining 30 per cent would be up for grabs in the form of at least 1 million shares that cost $100 each.

Besner hopes to raise $100 million to $125 million through the sale of shares, which would provide Gillett with an influx of cash to help deal with his debt issues while still maintaining control of the club. And Gillett even spoke of the possibility of making a portion of the team available to the public back in December.

The idea appears noble, until Besner starts talking to La Presse columnist Jean-François Bégin about the influence the public could have in certain hockey-related decisions, such as making sure there are more Quebec-born players on the team. That's when things start to get tricky, to say the least. If the GM of the Habs has to answer not only to Gillett, but to a legion of Quebec shareholders with their own specific demands, the team risks becoming a joke.

Just imagine trade deadline day or the start of free agency. Would all the shareholders receive a menu of players to choose from and have to send in their requests?

No, of the two scenarios put forth here, I would go with Savard in a heartbeat, even though it would be pretty cool to be a part-owner of the most storied franchise in hockey for only $100. It's just that the idea of the Habs having over 1 million owners is a recipe for disaster.


Anonymous said...

You'd need to buy shares in lots, probably min 2-5 K, so you would not have a million small shareholders, at the most say 50,000...



Arpon Basu said...

Fair enough, but I was simply trying to make a point. Thanks for calling me on the exaggeration.

Anonymous said...

It works in Green Bay with the Packers. Ownership can be structured so there they have no rights over hockey decisions. If you buy shares in a company, do you have any say on day to day business decisions?