Lots of interest in WHL franchises

From The Daily News of Tuesday, Aug. 21, 2007 . . .

Somewhere in the WHL office in Calgary rests a file that includes more than 60 entries.
“These are from potential investors interested in purchasing franchises,” WHL commissioner Ron Robison said Monday from Calgary. “These offers aren’t specific to markets . . . although, clearly, depending on the circumstances, they have their preferences.”
And what would happen should the Kamloops Blazers be put up for sale?
“I would think there would be a significant amount of interest should that open up,” Robison said.
The Kamloops Blazers Sports Society has scheduled an extraordinary general meeting of members for Thursday, 7 p.m., at the Sports Action Lounge in the Interior Savings Centre. At that meeting, the members are expected to deal with a requisition by River City Hockey Inc. and its supporters that asks for an immediate vote on a $6.1-million offer to purchase made July 18.
Should the society’s 256 members vote to accept that offer, they will have done so without examining a second offer, this one from Mike Priestner of the Edmonton-based Mike Priestner Automotive Group that places a $7.1-million value on the franchise.
As well, the Jim Pattison Group has expressed an interest in the franchise, but only if it is put up for sale and a procedure to accept offers is put in place.
Robison, who said he is following the Kamloops situation “as closely as I can,” said he has been in contact with the society’s board of directors.
“I indicated to the board that there certainly has been a high level of interest expressed from a variety of potential investors in franchises generally,” Robison said, adding that because “there’s been no official word from the club that the club is for sale” there haven’t been any specific inquiries.
Should members choose not to accept the RCH offer but to put the franchise up for sale, Robison said, “I would suspect once it’s public that the members have approved the fact the club is for sale there would be several more interested parties coming forward.”
The OHL’s Mississauga IceDogs are reported to have sold for $9.2 million last summer, with Eugene Melnyk, the owner of the NHL’s Ottawa Senators and the OHL’s Toronto-St. Michael’s Majors, buying the team and then selling it to the league. It has since been resold and relocated to St. Catharines as the Niagara IceDogs.
That price, however, would seem to be the exception.
In the OHL, the Oshawa Generals changed hands for $3.8 million in 2004 and the Belleville Bulls went for $3.5 million in 2004. In 2002, the North Bay Centennials were sold for $3 million and relocated to Saginaw, Mich.
In 2006, the Windsor Spitfires were purchased by a group including former NHLers Bob Boughner and Warren Rychel for between $5 million and $6 million.
“The range,”Robison said, “is $6 million to $9 million.
In the WHL, where an expansion franchise cost the owners of the NHL’s Edmonton Oilers $4 million, “there have been expressions of interest and offers made that were significantly higher than ($4 million) for existing franchises,” Robison said. “The minimum value we would place on any existing franchise would be $4 million.”
Robison cautioned that should RCH’s offer be accepted Thursday, the group still will be a ways from owning the franchise.
“We would look for the directors to forward to us the sale agreement that had been entered into,” Robison replied when asked the procedure should the offer be accepted. “From there, we would commence with our due diligence process which would be a series of steps to submit to the governors an application to approve the transfer of ownership of that franchise.
“That would at minimum be a 60- to 90-day process, depending on how quickly we can move through those steps and how quickly we could schedule (a board of governors’) meeting to discuss it.”
Also, he said, it isn’t necessarily a matter of whomever has the most money wins.
“The one thing we really focus on in our process is that the calibre of investors isn’t as big a concern to the league as the operating philosophy,” he explained. “The franchise has to be adequately funded on a long-term basis to meet all of its obligations.
“But it’s really the operating philosophy that is in sync with what we want the Western Hockey League to look like. That’s really where we’re going to be coming from.”
Robison also pointed out that “who is operating the club will be a very significant piece of the approval process.”
“I would like to think,” he added, “that any ownership group coming in would have an open mind. Some very good progress has been made in the last year or so and we’re excited by what has occurred there. They have to take all that into account for sure.”
At the same time, Robison said his preference would be to see the franchise, if it is to be sold, put up for sale, but . . .
“Any time there is a franchise available for sale, you would like to see how the marketplace plays out,” Robison said. “Having said that, there is a group that has been expressing interest for some time and they want to put their offer forward.
“You have to respect that.”