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Wisdom of Caisse purchase of Mtl Canadiens would depend on deal

The Canadian Press
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The Hockey News
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Wisdom of Caisse purchase of Mtl Canadiens would depend on deal

The Canadian Press
By:

MONTREAL - The Montreal Canadiens aren't even officially for sale yet but speculation is already swirling over who would buy one of the economic crown jewels of the National Hockey League.

Could it be Rene Angelil, the mastermind behind pop megastar Celine Dion? What about the Cirque du soleil? Or even the Quebec's pension-fund manager, the Caisse de depot et placement?

The debate has spilled onto the floor of Quebec's legislature, where Premier Jean Charest stickhandled around Parti Quebecois shots that the government would be better off investing in a Montreal hockey team than money-losing British airports.

The giant pension-fund manager can certainly sympathize with the Habs - the Caisse has also been roundly lambasted for its uninspired performance of late.

Caisse chairman Robert Tessier allows it's "a very good question" when he's buttonholed about any interest by the Caisse in the team.

The board would be duty-bound to look at any proposals but the decision would fall to the pension fund managers and president Michael Sabia, he said.

And, he added, a return on the investment would be "essential."

The Caisse buying the Habs is not a far-fetched idea. The powerful Ontario Teachers' Pension Plan has a stake in the Toronto Maple Leafs and members sit on the board.

Karl Moore, a business professor at McGill University, says that while the Canadiens have valuable assets and it would be great to have a local owner, it all comes down to price and whether or not the franchise is a good investment.

The Caisse would also have to take into account that buying what to many Quebecers is a piece of their heart is a lot different than scooping up some real estate. It could even be a distracting investment, Moore said.

"It's an emotionally engaging investment for anyone in Quebec," he said. "It would be something where it would be almost inevitable that you would be drawn to spending time there when you really should be focused on your job of managing the investments which are now in Quebec but also worldwide."

He would advise the Caisse, which lost close to $40 billion in 2008, to take a cue from current majority shareholder George Gillett and be a hands-off owner if it did get involved.

"Running the team is something that many general managers struggle with and they are men with enormous experience in the field," he said. "To think that some financial analyst or some manager at the Caisse can tell the team how to do a better job is suspect in my mind."

Moore said he doesn't believe there's any danger of the Canadiens leaving Montreal and he expects to see a good investor appear.

Even though they are struggling to make the playoffs, the Canadiens have worth. Last October, Forbes magazine valued the franchise at $334 million, putting it third in the NHL, behind the New York Rangers and the Maple Leafs.

In 2001, the Caisse and two banks provided loans worth $140 million to help Gillett buy the franchise and the Molson Centre, which has since been renamed the Bell Centre.

Gillett, an American, has retained financial firms in Canada and other parts of the world to "optimize the value" of his holdings in sports, entertainment and other businesses.

Besides his 80.1 per cent share in the Canadiens, Gillett owns 50 per cent of British soccer giant Liverpool and has interests in the Richard Petty Motorsports NASCAR team, event promoter Gillett Entertainment Group, ski resorts, car dealerships and agricultural companies.

While the Montreal Expos never became as entrenched as the Canadiens are, their move to Washington for the 2005 season makes Quebecers fret a little when questions are raised about the future of their sports teams.

Andre Pratte, an editorial writer with Montreal La Presse, did have a few questions about how a Caisse-run Canadiens would operate.

He wondered in an editorial if the Caisse would get involved in contesting the Bell Centre's municipal tax evaluation or the high salaries to players. Would it take a stand on the quality of the team captain's French?

In the legislature, PQ Leader Pauline Marois, who has made the Caisse's recent dismal financial performance a mantra, recently suggested to Charest that investing in a Quebec institution such as the Habs might be a good idea.

"Do the finance minister and the premier prefer to invest in airports in London that go bankrupt rather than invest in the Montreal Canadiens?" she asked.

Charest refused to be drawn in, replying there was no evidence the Canadiens would be leaving Montreal.

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Wisdom of Caisse purchase of Mtl Canadiens would depend on deal