Firms reportedly make pitch to buy NHL for $3.5 billion

TORONTO -- Two Boston companies have offered NHL owners a way out of their labor woes: Sell the entire league -- pucks, Penguins and penalty boxes -- for more than $3 billion.

Bain Capital Partners LLC and Game Plan LLC made the proposal Tuesday in New York, where NHL owners were meeting to discuss their next step in the lockout that canceled the entire 2004-05 season. The offer received an icy welcome.

"I don't think it's realistic, and I don't think there's much interest, and I know there's no interest on the part of the Bruins," said Jeremy Jacobs, whose Delaware North Cos. owns the Boston team, its building, part of its TV broadcaster and the concession contracts for several NHL clubs. "And I think it takes 30 (team owners) to do it."

The Toronto Star and Toronto Globe and Mail reported Thursday that NHL commissioner Gary Bettman invited the two Boston companies to present the offer. If accepted, the league would become a single entity, an ownership structure where most decisions are dictated by the central office and the teams have the autonomy of a fast food franchisee.

Sports leagues structured in that way -- Major League Soccer and the WNBA among them -- have been able to avoid some antitrust scrutiny in the courts, and that can translate into greater power in labor negotiations. But it's never been tried with a borderline major league with a strong union, and smaller single entities like the XFL and the WUSA have failed.

Steve Ross, a sports law professor at the University of Illinois Law School, said courts would want to examine whether the new arrangement stifled competition.

Chief legal officer Bill Daly says the NHL was compelled to hear the offer out. (AP)

"If some investment firm wanted to buy Ford and General Motors and Honda and Toyota, that would be illegal," he said. "I think that would be a huge problem for them."

Steve Pagliuca, Bain's managing director and a part-owner of the Boston Celtics, did not return e-mails seeking comment. Game Plan recently acted as an adviser on the sale of the Ottawa Senators.

Mired in a lockout since Sept. 16, the NHL last month became the first major North American pro sports league to cancel an entire season. The league has said its teams have lost a collective $500 million over the past two seasons.

Before the work stoppage, the total value of the 30 NHL franchises was estimated by Forbes magazine at $4.9 billion. The Detroit Red Wings topped the list at $266 million, with the Edmonton Oilers last at $86 million. The value of team-owned arenas was part of the assessment.

An offer of between $3 billion and $3.5 billion would translate to between $100 million to $117 million per team.

"What it does say is that there are people out there that see much more potential and value in hockey if the league is run properly," said Andrew Zimbalist, a Smith College professor who specializes in the business of sports. "They think the asset value of the franchises has been so depreciated by mismanagement and the lockout that there's an opportunity to get a bargain."

But the offer has several problems from the start.