Brawndo Posted January 11, 2022 Report Share Posted January 11, 2022 From Friedman 32 Thoughts. He also discussed it on the After The Whistle Podcast Today 25. It didn’t get a lot of attention at the Board of Governors’ meeting, but the most influential move made there was the NHL agreeing to allow private equity funds to buy into NHL teams. Commissioner Gary Bettman was tight-lipped regarding details, as it's more about the realities of COVID’s effect on the business than something he had incredible enthusiasm for. Front Office Sports reported this week that teams can sell up to 30 per cent of their ownership to such firms; and these firms can own parts of up to five teams -- maximum 20 per cent in any team, with a minimum $20M (US) investment in each one. The first such investor, Arctos Sports Partners, bought into both Minnesota and Tampa Bay. This development is going to strengthen current ownership groups that wish to use them. Quote Link to comment Share on other sites More sharing options...
Sabres Fan in NS Posted January 11, 2022 Report Share Posted January 11, 2022 Billionairs getting millions from millionairs, eh!! Seems legit. What could go wrong. Quote Link to comment Share on other sites More sharing options...
Eleven Posted January 11, 2022 Report Share Posted January 11, 2022 1 hour ago, Brawndo said: these firms can own parts of up to five teams This is horrible, this idea. 4 2 Quote Link to comment Share on other sites More sharing options...
French Collection Posted January 11, 2022 Report Share Posted January 11, 2022 2 minutes ago, Eleven said: This is horrible, this idea. It could get complicated. Can a firm that owns parts of five teams have an ownership stake in a firm that owns parts of five other teams. Back to the original six days when the Norrises owned the Red Wings and the Blackhawks. 1 Quote Link to comment Share on other sites More sharing options...
PromoTheRobot Posted January 11, 2022 Report Share Posted January 11, 2022 (edited) 26 minutes ago, Eleven said: This is horrible, this idea. Nothing good comes from these groups buying things. <shudder> I just had a vision of Terry selling 20% of the Sabres to these vultures. Edited January 11, 2022 by PromoTheRobot 2 Quote Link to comment Share on other sites More sharing options...
Zamboni Posted January 11, 2022 Report Share Posted January 11, 2022 Does any other major pro sport allow this? And if so, how are those partnerships holding up? Quote Link to comment Share on other sites More sharing options...
Eleven Posted January 11, 2022 Report Share Posted January 11, 2022 15 minutes ago, Zamboni said: Does any other major pro sport allow this? And if so, how are those partnerships holding up? Major? Not really. IIRC, at the beginning of MLS, all teams were owned by the league--presenting a similar competitive conflict of interest--and that league has grown fine. But to do this retroactively seems like a recipe for disaster. 1 Quote Link to comment Share on other sites More sharing options...
Pimlach Posted January 11, 2022 Report Share Posted January 11, 2022 These guys are offering Terry a deal for 51 % ownership of the Sabres. What can go wrong? Quote Link to comment Share on other sites More sharing options...
Weave Posted January 11, 2022 Report Share Posted January 11, 2022 Ugh. Nothing good comes from Private Equity ownership. 50 minutes ago, PromoTheRobot said: Nothing good comes from these groups buying things. <shudder> I just had a vision of Terry selling 20% of the Sabres to these vultures. Bank on it. 1 Quote Link to comment Share on other sites More sharing options...
K-9 Posted January 11, 2022 Report Share Posted January 11, 2022 This is not a good development. Might take meddling to entirely new levels. 2 Quote Link to comment Share on other sites More sharing options...
tom webster Posted January 12, 2022 Report Share Posted January 12, 2022 I’m pretty sure I alluded to this in the thread about Pegulla’s selling. Quote Link to comment Share on other sites More sharing options...
Marvin Posted January 12, 2022 Report Share Posted January 12, 2022 This is just asking for trouble. I think the owners took a huge bath in red ink last season and this is part of the plan to stem the tide. I am thinking about these people leveraging interest in one team, probably a smaller market, to trade a $1 player to a big market team they have equity in for 2 quarters, 3 dimes, and whatever is behind door #2. Imagine this scenario: firm A has a stake in teams 1, 2, and 3 while firm B has the same stake in teams 1, 2, and 4. Team 1 is out of the playoff hunt, but has a highly coveted UFA2B. Team 2 could use him, but will not trade for him if the price is too high. Teams 3 and 4 are contenders and both want UFA2B from team 1. Can you imagine the potential behind-the-scenes shenanigans that could happen if a bidding war broke out? And to avoid adverse fallout, team 1 might need to turn down good offers from teams 3 and 4 to take a meh offer from team 2 just to keep these investors happy. 2 2 Quote Link to comment Share on other sites More sharing options...
tom webster Posted January 12, 2022 Report Share Posted January 12, 2022 I’m sorry, and I don’t want to offend anyone but a lot of you are putting too much stock in the notion that on ice performance plays a large role in the value of a franchise. Private equity guys aren’t going to give a rats ass about a franchises place in the standings. 1 Quote Link to comment Share on other sites More sharing options...
IKnowPhysics Posted January 12, 2022 Report Share Posted January 12, 2022 US sports leagues, including the NHL, that allow private equity minority owners have rules that require the minority stake be passively owned. No day-to-day control of the team, and certainly no influence on personnel movement. https://www.ft.com/content/252d8eb0-9478-41c3-a521-8c4c9b34c179 Quote US pro sports league rules generally require that institutional stakes in clubs be passively owned, with caps on both individual fund and overall fund holdings for each club. So, none of this: 3 hours ago, K-9 said: This is not a good development. Might take meddling to entirely new levels. 31 minutes ago, Marvin, Sabres Fan said: This is just asking for trouble. I think the owners took a huge bath in red ink last season and this is part of the plan to stem the tide. I am thinking about these people leveraging interest in one team, probably a smaller market, to trade a $1 player to a big market team they have equity in for 2 quarters, 3 dimes, and whatever is behind door #2. Imagine this scenario:... === 4 hours ago, Zamboni said: Does any other major pro sport allow this? And if so, how are those partnerships holding up? Yes. 3 hours ago, Eleven said: Major? Not really. No. Quote The National Football League is now the only major male US professional sports competition without provisions for institutional ownership. Major League Baseball, the National Basketball Association and Major League Soccer all have amended their ownership rules since the spring of 2019. Quote Link to comment Share on other sites More sharing options...
Taro T Posted January 12, 2022 Report Share Posted January 12, 2022 3 minutes ago, tom webster said: I’m sorry, and I don’t want to offend anyone but a lot of you are putting too much stock in the notion that on ice performance plays a large role in the value of a franchise. Private equity guys aren’t going to give a rats ass about a franchises place in the standings. Place in the standings, no. But looking to maximize the value and cash coming back from their investment, absolutely. And if a group that owns a share of 2 or 5 teams can get a better return if the stud player on one of their rosters were on a different one, they'll be pushing for that. Hopefully the majority owner won't go along w/ it, but especially if the majority owner has immediate issues, that owner might be willing to sign off on the move that helps in the ST but kills in the LT. Don't have a good example, and maybe it's simply worry/distrust of the new for no particularly valid reason, but just keep seeing "Coyotes hosed again" as a nearly inevitable outcome of this. Who else? And, really don't see how further imbalancing the competitive landscape being a good thing. 1 Quote Link to comment Share on other sites More sharing options...
Eleven Posted January 12, 2022 Report Share Posted January 12, 2022 23 minutes ago, IKnowPhysics said: US sports leagues, including the NHL, that allow private equity minority owners have rules that require the minority stake be passively owned. No day-to-day control of the team, and certainly no influence on personnel movement. https://www.ft.com/content/252d8eb0-9478-41c3-a521-8c4c9b34c179 So, none of this: === Yes. No. I can't access the FT article, but private equity groups aren't the same as traditional minority owners. And I don't know of another major league that allows any minority ownership of two teams in the same league--I could be wrong. Quote Link to comment Share on other sites More sharing options...
tom webster Posted January 12, 2022 Report Share Posted January 12, 2022 15 minutes ago, Taro T said: Place in the standings, no. But looking to maximize the value and cash coming back from their investment, absolutely. And if a group that owns a share of 2 or 5 teams can get a better return if the stud player on one of their rosters were on a different one, they'll be pushing for that. Hopefully the majority owner won't go along w/ it, but especially if the majority owner has immediate issues, that owner might be willing to sign off on the move that helps in the ST but kills in the LT. Don't have a good example, and maybe it's simply worry/distrust of the new for no particularly valid reason, but just keep seeing "Coyotes hosed again" as a nearly inevitable outcome of this. Who else? And, really don't see how further imbalancing the competitive landscape being a good thing. I understand what you are saying but with even franchises like Buffalo expected to approach $1B, there just isn’t enough incentive to quibble over whether team A or B has Connor McDavid. You’d be talking about increasing value by less then 1 percent. 2 minutes ago, Eleven said: I can't access the FT article, but private equity groups aren't the same as traditional minority owners. And I don't know of another major league that allows any minority ownership of two teams in the same league--I could be wrong. One could argue that billion dollar corporations that sponsor multiple franchises could have as much influence as any private equity investment. Quote Link to comment Share on other sites More sharing options...
Eleven Posted January 12, 2022 Report Share Posted January 12, 2022 1 minute ago, tom webster said: I understand what you are saying but with even franchises like Buffalo expected to approach $1B, there just isn’t enough incentive to quibble over whether team A or B has Connor McDavid. You’d be talking about increasing value by less then 1 percent. One could argue that billion dollar corporations that sponsor multiple franchises could have as much influence as any private equity investment. Absolutely. I think that's one good reason why M&T can't sponsor the Bills' stadium; it already has the Ravens' stadium. It is tied to both through sponsorships (albeit it seems much more tied to the Ravens). Quote Link to comment Share on other sites More sharing options...
IKnowPhysics Posted January 12, 2022 Report Share Posted January 12, 2022 5 minutes ago, Eleven said: I can't access the FT article, but private equity groups aren't the same as traditional minority owners. And I don't know of another major league that allows any minority ownership of two teams in the same league--I could be wrong. Fair enough. https://sports.yahoo.com/mls-private-equity-rules-500m-050137968.html Quote Some of the MLS rules are similar to ones the NBA put in place last year. Like in MLS, a fund can buy up to 20% of an NBA team, and teams can sell up to 30% total. Funds can own up to five NBA teams, unlike four in MLS. https://www.foxbusiness.com/sports/mlb-ownership-rule-change-private-equity Quote In a bid to gain access to new sources of equity investment, MLB changed its bylaws earlier this year to allow investment funds to acquire minority stakes in multiple teams. Quote Link to comment Share on other sites More sharing options...
Dreams Burn Down Posted January 12, 2022 Report Share Posted January 12, 2022 59 minutes ago, tom webster said: I’m sorry, and I don’t want to offend anyone but a lot of you are putting too much stock in the notion that on ice performance plays a large role in the value of a franchise. Private equity guys aren’t going to give a rats ass about a franchises place in the standings. My biggest concern when I read about this was not player related shenanigans. Could private equity groups influence whether a team stays or leaves a particular city? Or is it strictly dollars and cents to them? 1 2 Quote Link to comment Share on other sites More sharing options...
Weave Posted January 12, 2022 Report Share Posted January 12, 2022 12 minutes ago, Dreams Burn Down said: My biggest concern when I read about this was not player related shenanigans. Could private equity groups influence whether a team stays or leaves a particular city? Or is it strictly dollars and cents to them? It’s dollars and cents to them. You’ll get fantastic operational efficiencies like video scouting. 1 1 Quote Link to comment Share on other sites More sharing options...
tom webster Posted January 12, 2022 Report Share Posted January 12, 2022 1 hour ago, Eleven said: Absolutely. I think that's one good reason why M&T can't sponsor the Bills' stadium; it already has the Ravens' stadium. It is tied to both through sponsorships (albeit it seems much more tied to the Ravens). Mercedes sponsored both New Orleans and Atlanta until New Orleans changed this year or last. Quote Link to comment Share on other sites More sharing options...
Eleven Posted January 12, 2022 Report Share Posted January 12, 2022 11 hours ago, tom webster said: Mercedes sponsored both New Orleans and Atlanta until New Orleans changed this year or last. Wow. I can't believe the NFL allowed two teams in the same division to do that! Quote Link to comment Share on other sites More sharing options...
Cascade Youth Posted January 12, 2022 Report Share Posted January 12, 2022 Lol if you thought the “maintain our lifestyle” slide was scary, wait until you see the PE PowerPoints… Quote Link to comment Share on other sites More sharing options...
Weave Posted January 12, 2022 Report Share Posted January 12, 2022 1 hour ago, Cascade Youth said: Lol if you thought the “maintain our lifestyle” slide was scary, wait until you see the PE PowerPoints… Lots more people with lifestyles to maintain. 1 Quote Link to comment Share on other sites More sharing options...
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