- The Washington Times - Friday, June 24, 2005

Sixteen months ago, a league-commissioned financial analyst called the NHL “a dumb investment” and said it was on “a treadmill to obscurity.”

Since then, the NHL has seen its lockout become the longest work stoppage in North American pro sports history, ESPN part ways with the league, fans find other outlets for their sporting passion and, surprisingly, a growing group of investors who still want to join the exclusive fraternity of team owners.

Amid the darkest days in the NHL’s 88 years, the Mighty Ducks of Anaheim recently were sold to billionaire Henry Samueli, who amassed his fortune as co-founder and chairman of communications heavyweight Broadcom Co. A California investor, William “Boots” Del Biaggio, has a letter of intent to buy the Pittsburgh Penguins. The St. Louis Blues are officially for sale with at least several serious offers expected soon. And a pair of Boston investment houses have a standing proposal to buy the entire NHL and recently raised their offer to $4.3billion.

Civic leaders also are getting into the act. Kansas City today will break ground on Sprint Center, a state-of-the-art arena partially funded with public dollars and designed in large part to attract an NHL franchise back to the city. The midwestern hub had an ugly two-year run with the Kansas City Scouts in the mid-1970s.

Plenty of fans might consider the moves foolhardy at best and ludicrous at worst, particularly considering there still is no labor agreement after 282 days of off-and-on negotiating, two-thirds of NHL teams were losing money before the lockout according to league officials, and no clear sense exists of how many fans will again embrace the NHL whenever it returns. But those seeking to make the financial plunge into hockey believe a transformed, re-energized NHL will emerge from the ruins.

“The league is going through a bunch of changes, but they’re going to get through it,” said Howard Baldwin, a Hollywood producer and former owner of the Penguins and Hartford Whalers. Baldwin, after a financially disastrous run in Pittsburgh, is seeking an NHL franchise to play in the new Kansas City arena. He also unsuccessfully pursued the Mighty Ducks.

“This is still a great spectator sport. I’m a firm believer in its future,” he said.

Much of the optimism stems from a series of substantial changes set to usher in a new era for the league. Though no labor deal has been established, talk within the hockey community strongly points to owners soon succeeding in their fervent quest for a salary cap, likely to be set between $32million and $36million with a companion $22million floor. The cap likely will end the days in which high-revenue teams like Toronto spend more than four times as much on players as penny-pinching clubs in Nashville, Pittsburgh and Minnesota.

Developing on a parallel course to a new economic structure are a series of on-ice changes that could make Fox Sports’ ill-fated glowing blue puck look quaint by comparison. Under consideration are much larger goal dimensions, tighter restrictions on goalie equipment, allowance of two-line passes, and uniforms that are sleeker and more form-fitting. The clear aim of the changes is to open up a stagnant offensive game and make the sport more attractive for television viewers.

“We can’t be afraid of innovation,” said Brian Burke, who this week joined the Mighty Ducks in Anaheim with Samueli to become executive vice president and general manager. “I don’t necessarily need more goals, though I’m sure we’ll get them. What I need is more scoring chances and flow. We need that edge-of-the-seat moment as much as possible. We do that, and I think you can make a strong argument the NHL’s best days are still ahead.”

To be certain, no one is offering to pay premium prices for an NHL franchise these days. The sale of the Mighty Ducks to Samueli was for $75million, just $25million more than the Walt Disney Co. paid for the expansion franchise 13 years ago and less than the $108million valuation Forbes magazine gave it last year.

Disney also sought a buyer for the club for more than three years, steadily dropping its price along the way. The league buyout offer from Bain Capital and Game Plan LLC also is less than the $4.9billion collective value Forbes gave the NHL.

But buying an NHL team is gaining fans within the investment community as a major value for patient investors and one with significant upside.

“There is still plenty of interest in hockey out there. I can certainly say that for Kansas City,” said Paul McGannon, leader of NHL21, a civic group there that is seeking a relocated NHL club. “If anything, what’s happened has increased the opportunity for us and made people even more excited.”

Mark Cuban, owner of the NBA’s Dallas Mavericks, agreed in a recent interview with ESPN. Asked what other type of sports franchise he would hypothetically buy, he cited the NHL.

“I’m going long with the NHL. Buy low, sell high,” he said

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