SUN Hockey Pool

NHL isn't a clunker

AL STRACHAN -- Toronto Sun

, Last Updated: 12:48 PM ET

National Hockey League commissioner Gary Bettman has been known to make the analogy between his league and a wrecked car. Fine. So if you had a wrecked car and someone wanted to give you the value you yourself placed on it when it was operating, wouldn't you take it?

Why then wouldn't the owners jump at the opportunity to sell the entire league for $3.5 billion US?

Could it be that the league's financial picture isn't as bleak as the NHL paints it?

Even though Bettman held a press briefing after Tuesday's board of governors meeting in New York, he didn't bother to announce the fact that those in attendance had listened to a proposal from GamePlan LLC and Bain Capital LLC to buy the NHL. After all, why would the public want to know that?

Better just to tell the media there were no significant expressions of unhappiness, even though, as Steve Simmons reported in yesterday's Sun, Maple Leafs governor Larry Tanenbaum delivered a blistering address and left the meeting early in "an emotional state."

If Bettman had mentioned the purchase offer, he would have been asked about his claims regarding the league's finances. These days, that's a subject he tried to avoid.

Remember all the fuss about the "super audit," the impeccable Levitt Report? We haven't heard much about it lately.

That's because Russ Conway of the Lawrence Eagle-Tribune took the Levitt Report to a couple of accounting experts and found out that the "super audit" was no such thing. It wasn't even an audit.

Conway spoke to Richard Delgaudio, a professor of accounting and auditing at Merrimack College near Boston. "An audit implies that you look at documentation and source documentation," he said. "A review is when you just kind of look things over to see if it seems right."

The Levitt Report was the latter. It used figures supplied by the league teams, with no subsequent verification of their accuracy or degree to which they were complete.

Another accountant to whom Conway spoke said, "This is absolutely, unconditionally not an audit. To pass it off as one is nonsense."

According to Bettman's -- and Levitt's -- numbers, the league lost $223 million last year. So why would anyone want to pay $3.5 billion for the right to lose $223 million?

And why, if the league is in such bad shape, are people buying hockey teams? At its Tuesday meeting, the board approved the sale of the Vancouver Canucks. In a meeting in the near future, assuming the due diligence is satisfactory, it will approve the sale of the Anaheim Mighty Ducks.

During Bettman's 12-year tenure, 80% of the NHL teams have changed hands. Are all these new buyers people who want to throw away hundreds of millions of dollars?

CAN MAKE MONEY

The reason that GamePlan and Bain offered such a whopping amount to buy the NHL is that they know they can make a nifty return on their investment.

Certainly they would make some changes. Because one group would own all 30 teams, the internecine rivalries among owners that now tear the league apart would no longer come into play.

The bidding group also knows that a lot of revenues are hidden from fans and "super-auditing" accountants. In areas like concessions, luxury boxes, television rights and team-related gear, the owners have made sweetheart deals with "outside companies." But those companies are only far enough outside to escape being classed as hockey revenue. They're still owned by the same guy who owns the team -- or one of his companies.

GamePlan and Bain went to the governors and made a firm offer for the entire league, using the values cited in the Levitt Report as the criteria for the size of their offer.

No wonder the governors laughed at them.


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