Stronger economy expected to spur Blues sale

Apr 20 2011 - 4:32pm

ST. LOUIS -- The firm orchestrating the sale of the St. Louis Blues believes that an improving economy and the continued increase in NHL revenue could lead to the franchise changing hands by the start of the 2011-12 season.

Game Plan LLC founder Robert Caporale said that his company is "just in the beginning stages of the process," and added that "at this point in time, I personally think we will be able to accomplish that."

It's been only a month since Dave Checketts publicly put the Blues on the market, and if the club could be sold before the start of the next season, it would be a relatively quick transaction by many standards.

While there are examples of NHL franchises, such as the Buffalo Sabres and the Minnesota Wild, selling in just a few months, sales of others, including the Nashville Predators and current ones in Phoenix and Dallas, have dragged on for more than a calendar year.

The Blues were on the market for a year themselves the last time they were sold, in 2006. Game Plan was the firm that guided that sale -- from Bill and Nancy Laurie to Checketts -- and five years later, Caporale says the sale process should be speedier because of a changing climate.

"The most important thing is that there has been improvement in the economy," he said. "Over the last couple of years, there seems to have been fewer people who were willing to make the capital commitment that's required to purchase a major-league franchise. Not necessarily because they didn't have the capital, but because of the economic conditions, they were not willing to invest the capital, or part with it, during difficult economic times."

For the sixth consecutive season since the lockout in 2004-05, the NHL is expected to see an increase in revenue, estimated at a record $2.9 billion this season. That's approximately a 38 percent increase from $2.1 billion in revenue in 2005-06.

"I think it just proved that the economic system that's now embodied in the (collective bargaining agreement) is working and is the right system," Caporale said. "That doesn't mean the next time around they may not tweak it. But it means there is a basis of a solid economic system. You don't have the level of disagreement of ownership and players that we see in some of the other leagues right now."

The NFL is involved in a lockout, and the NBA could be on the verge of one itself. The NHL has 1 1/2 years remaining on its current CBA before it expires in September 2012, but Caporale doesn't see that as a hindrance in the sale process.

"It's not an issue yet in the NHL, and frankly I don't expect it to become an issue," he said. "It's far enough away that, right now, it's not an issue."

But if the NHL's revenue has continued to increase each year, and the CBA seems stable, why have 11 teams in the league changed ownership since 2005? That's in comparison to eight in MLB, eight in the NBA and five in the NFL (including two that were passed on to heirs) in the same stretch.

"I think it's all individually market driven and has to do with particular factors that deal with current ownership," Caporale said. "I also think the downturn of the economy played a significant role in causing some owners to sell their team because of other economic conditions in their other businesses."

The exponential rise in the NHL's salary cap, however, has been another legitimate difference in owners being able to maintain control of their franchise.

The salary cap was instituted after the lockout in 2005, and at the time, the ceiling was $39 million and the floor was $21.5 million. This year, the ceiling was $59.4 million with a floor of $43.4 million.

In the 2005-06 season, 10 of the 15 teams with the top payrolls in the league advanced to the playoffs. In the last two years, that number has risen to 12.

Among the clubs at the bottom in payroll the past two years are the Florida Panthers and the Blues, who have been sold since the lockout. Two others, Dallas and Atlanta, are currently having ownership issues.

"The so-called haves and have-nots, I would describe it as the issue of the big-market teams and the small-market teams," Caporale said. "That issue is, in my opinion, the single issue in the professional sports industry that has not been completely addressed in each of the leagues.

"The NHL has attempted to address that with the introduction of revenue sharing. Whether there's a better way of doing it, I don't know. (But) it is an issue, and it will continue to be an issue."

Recently in the NHL, clubs have been bought by owners who had a passion for owning a team in the league, regardless of financial losses. That factor also sped up the sale process.

In Buffalo, the Sabres were sold earlier this year to Terry Pegula, 59, who was a longtime season-ticket holder of the team. In 1983, he was quoted as telling a business partner, "If I ever have more than two nickels to my name, I'm going to buy the Buffalo Sabres one day."

Pegula recently sold his company, a Marcellus Shale gas-drilling company, for $4.7 billion.

In Minnesota, the Wild spent to the cap this season behind third-year owner Craig Leipold, but did not make the playoffs.

"Listen, there's no question we're losing money," Leipold told the Minneapolis Star-Tribune last week. "But this is not about if you're making money or losing money. If I wanted to make money, I'd go out and buy another business."

Caporale contends that the NHL has more prospective buyers than just ones who are simply in it because of their love for the sport.

"There are people who are interested in the sport, but also interested in the business, who see value of an NHL team," he said.

Game Plan believes it can locate one for the Blues, who have seen their attendance climb from an average of 14,213 in 2005-06 to 19,150 this season.

"They are doing substantially better, financially, economically, than they were before the new CBA," Caporale said. "From our experience, because this is all we do, we have a fairly good list of people that we know that have come to us in the past and said, 'Let us know when there's a team available.' There seem to be more of those people today than there were two years ago. The market is and will be robust ... and I suspect there will be a very good interest in that team in that sports market."

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