Montreal Canadiens Practically Impossible to Sell

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The media has been going crazy over the potential sale of the Habs, as the owner, George Gillett, looks to raise cash.

When the Canadiens were sold to Gillett in 2001, there wasn't another buyer around and back then the team was a relative bargain. It's hard to see somebody buying the team today, at a 50-75% premium.
The team is firing on all financial cylinders, revenues are high, but the potential to up the earnings is rather limited and the buyer is acquiring a mature business with more downward risk, than upward potential.

That's why the owner had to hire a consulting group in order to help identify and pursue possible suitors.

All the potential buyers who's names are being bandied about by the newspapers, had the opportunity to buy the team back in 2001 and passed. Given the new set of circumstances today, it's even more unlikely that they will come back to the table and pay even more for the team, given the present economic era of uncertainty.

The Quebec finance minister has pooh-poohed the idea of the Caisse de Depot (the province's pension fund) providing financing, which makes the deal even more unlikely, given the frozen credit markets. This decision is hard to understand. The Caisse lent $140 million dollars to Gillett to buy the team in 2001 and the loan was completely repaid. With the credit markets the way they are now and without the Caisse's involvement, the buyer will have to commit over $400 million in cash to get the deal done.

Let's review some of the personalities mentioned as potential saviors.

GUY LALIBERTE
The owner of the Cirque de Soleil is certainly rich enough to do the deal, but is unlikely to do so, unless he can wring some big time concessions out of the owner, an unlikely event. Mr. Laliberte seems to be going in the opposite direction, cashing out some $600 million by selling part of the Cirque to Arab interests. Cirque President, Daniel Lamarre, scotched the idea of a permanent show in Montreal, based on economics when the Casino/Cirque deal in the Peel basin died. The Cirque, according to him, went on to bigger and better things. Today, expansion of the Cirque into Russia is a priority and a huge financial and creative undertaking, likely to exhaust the company's energy and focus.
Also, Mr. Laliberte's acrimonious divorce is hanging over him and a high profile purchase of the Canadiens, doesn't seem like a good idea.

CELINE DION/ RENE ANGELIL

The Quebec chanteuse is wealthy, but alas, not wealthy enough. She's definitely no Oprah. Rene Angelil has already stated that the project is of no interest to them.

STEPHEN BRONFMAN
The last remaining member of the Bronfman family in Montreal is a lightweight, without the power or the money to pull off a deal of this magnitude. Charles Bronfman, the ex-owner of the Expos, moved out of the city to New York years ago. He has stated in the past, that his purchase of the Expos in 1968 was based on his love of the city. Now that he's gone, there's no more motivation.
Aside from that, the once mighty fortune of the Bronfmans is not what it once was. It has been battered by a terrible merger with Vivendi SA and the misadventures of Edgar Jr. in the entertainment field.

PIERRE-KARL PELADEAU

Son of Quebec scion, Pierre Peladeau, Pierre-Karl is fighting his own battle to keep his print and media business profitable. PK has a small fortune, but unfortunately started out with a big fortune, it's hasn't been easy since his father's death. I don't know if those proposing his name read the same newspapers as I, but the financial situation at the company needs to rebound in light of the 'Quebcor World' subsidiary bankruptcy. The newspaper business, which the company is heavily involved in, doesn't look rosy and the company's stock price of $17 is way off the $48 high. PK certainly doesn't have the time or inclination to make a move on the Habs and it's unlikely that his shareholders or bankers would appreciate the adventure.


PAUL DEMARAIS
The owner of the powerfully diversified Power Corporation is perhaps the most unlikely buyer of the Habs. Mr. Demarais is no publicity hound, if anything quite the opposite. He is more attuned to living life in the rarefied atmosphere of the rich and famous (he is best friends with President President Nicholas Sarkozy and is said to have engineered his rise to power.) Ownership of the Habs would thrust Mr. Demarais into the limelight and make him responsible to the hoi-polloi for the goings on at the Canadiens. Mr. Demarais is a an unabashed and activist federalist, largely reviled by nationalists as someone who has sold out his people and made money on their backs by controlling Quebec's business world. He could never don the cloak of neutrality that would be required of the owner of the Montreal Canadiens.

JEAN COUTU
Forced out of retirement to help turn around his company's deteriorating fortune, triggered by a disastrous expansion into the USA, it's unlikely that he'd be interested in the team at this point. His company reported a whopping $397 million dollar loss in the last quarter.

LINO SAPUTO
The Saputos are deeply involved with their first love, soccer and are also unlikely buyers. Their dream of owning a franchise in the North American premier soccer league, the MLS went unrealized when they balked at paying the $40 million expansion fee.
$400 million for the Canadiens, I don't think so!


JIM BASILLE
So that leaves the front runner, Jim Basillie, who's dream of owning a NHL franchise in southern Ontario has been dashed on too many occasions by Mr Bettman and friends. Maybe he's ready to 'settle' for the Canadiens, but Mr. Gillett knows his phone number and has probably already called. The fact that there are no rumours of an impending deal, speaks ominously to his interest.
I hope I'm wrong, he'd be a fabulous owner/operator.

The very last idea being floated is that of a group of investors who can be cobbled together, a la Expos. Without a lender and in the present tight credit market, $400 million is an impossible number and given that Gillett is selling the team to raise cash, a balance of sale is out of the question.

Montreal Parking Meter Wars

Restaurateurs are begging the city to give their customers a break on Saturday afternoon until Sunday night. Business is tough enough and they they say that the meters are a factor in keeping customers away from the downtown core.

In a 'Let them eat cake quarters' comment, Montreal city councilor Marvin Rotrand intimated that parking meter fees could be higher and cited Vancouver and Calgary as examples.

How much does the city depend on the parking meter revenues?......Not much, if you look at the figures.

According to the private company (Stationnement Montreal) that is responsible for Montreal's parking revenues, the city has over 16,000 parking meters which took in about $50 million last year.

The City's annual budget is $4 billion and so parking meters represent just 1.2% of city revenues.
If the city was to give in the the demands of the restaurateurs it would lower city revenues by a less than ¼ of one percent.

By the way, once I calculated this all out, I was left with other interesting facts about parking meters, which you may find interesting;

Average daily revenue of each parking meter is $8.42 and if we assume an average hourly rate of a $1.75 (a guess), it means that the meters are each being used for an average of a little more than 4.2 hours per day.

I would have guessed more...a lot more.

Those downtown meters charge $3 an hour, and are busy all day, aside from the double-charging factor (where customers don't use up all their allotted time.) They gotta be taking in $40 a day, easily. That mean that the other meters in the city are taking in only a buck or two per day....hmmm, I'm not so sure.

Speaking of parking meters, I parked at this Westmount meter and checked the sign to see if I had to pay, since it was Sunday.

I studied the sign for a lot longer than I should of had to, trying to figure out what the heck this sign means;

'LUNDI - DIMANCHE 7h-22h

TOUT AUTRE TEMPS 4H MAX'

Could somebody explain to me what it means?
Does it mean Monday and Sunday only or does it mean all week long?
Usually a dash indicates from/to, as in Mon-Fri, which I could readily understand, but if that's the case, LUNDI-DIMANCHE is a confusing way to say 'every day'.

If it's just Monday and Sunday, shouldn't Sunday be first and then Monday, as in the days of the week and shouldn't the dash be replaced by a comma.

Another Ugly Telemarketing Scam From Montreal

It's a sad fact that Montreal remains North America's illegal telemarketing capital and that the crimes are perpetrated largely by anglos and ethnic Montrealers in the west end of the city. The scam artists try to keep away from the long arm of the US justice system by setting up operations here and targeting victims across the border in America. The problem has so gotten so bad that the RCMP has set up a special squad called the Phonebusters to deal with it.

The latest scam to surface is not telephone fraud, but rather a neat scam that uses the mail to bilk people out of their money.



The advance-fee fraud fraud consists of a letter asking the victim to become a mystery shopper, in order to evaluate the performance of various companies (Wal-Mart, Sears, etc.) including a wire transfer company. Enclosed in the letter is a cheque for $4,200, which is supposed to cover the salary and expenses of the mark, as well the funds required to 'test' a moneygram company (like Western Union.)
Those who bite, deposit the cheque in their own bank account and wire most of the money back to the scammers as instructed, by a moneygram, making it impossible to trace the transaction or recover the money.

Weeks later they discover that the cheque was phony and that they have to re-imburse the bank for the funds that they sent to the scammers.
Pretty nasty.

You can read the original by clicking letter in the right.

It's very slick.



The New York city company, 'EXPERIAN', that supposedly sent the letter is as phony as a three dollar bill.











The address on the letter leads to a parking garage in lower Manhattan. The letter was actually mailed from Canada and very likely Montreal.


The fraudsters use a postal meter for authenticity (note the ironic cancellation stamp over the postage- 'Fraud- prevent it'.

The Canadian postal code -H3N 2L3 is around the Jean Talon/ Beaumont Street area (but it could also be phony) and is the clue that it came from Montreal. The return address is completely phony. Post Office boxes numbers need the station to be identified, as in this example;

POB 2637, Staton 'A'
Montreal, Quebec, H3N 2L3

The return addressee is a company, RSM Ritcher, a highly reputable accounting firm, who's office is really in downtown Montreal and I'd imagine, none to pleased about having their name linked to a fraud.

Every few months, the police break local telemarketing gangs, the latest being last December, but it doesn't seem to put a dent in their illicit activities.


>>>>BREAKING NEWS!!!! 12:04PM

RCMP have just announced that they are presently undertaking an operation against telemarketers and will conduct a news conference at 1:30 to reveal the particulars.

>>>>>>>>>>>UPDATE!!!! 1:58PM

The RCMP just announced that they are carrying out raids against telemarketers who are running a con called 'Grandson' whereby they intimate to victims that their grandson is in dire straits in a foreign country and needs them to wire him money. Pretty lame, huh. The police spokesman said that the fraudsters got away with $3.5 million.

It's interesting to see if this investigation is related to the con that I have described above. It sounds pretty close, using moneygrams and all.

Premier Charest's Brilliant Chess Game

To read Gazette columnist, Josee Legault and Don MacPherson or Toronto Star columnist Chantal Hebert, you'd think Quebec Premier Charest is a bumbling idiot, bouncing from one disaster to another.

Yet the Premier's seemingly erratic behavior can be explained easily enough, if one considers that he is just following the political rule, that says;

It's preferable to be in power with a unpopular majority, than to be popular, but sitting in opposition.

Support for the Charest government may have plummeted to 38% from a high of 67% last October, yet the Liberals remain securely in power with a majority government and a mandate to rule for many years to come. F0r Mr. Charest and his party, it's represents the very best option, considering the alternatives.

The Premier may seem to be careening badly, but is actually managing his current political situation, quite brilliantly.

If the Liberals are unpopular, it is because they should be. Given the incredible disaster at the Caisse de Depot et placement (CDPQ) and the current economic outlook, no government should have expected to be returned to power, yet Mr. Charest and his government did survive, by holding an election before the true depth of the crisis became known.
It was a cynical and an unethical, but honesty has never been a political requirement or a formula for success.

The Premier had a simple choice. Hide the truth and roll the dice with an election or lose power when news of the debacle at the CDPQ surfaced. He did what he had to do.

Everything that's happening now, was clearly predictable to Mr. Charest back in October. He knew that he and his party would face a bleak and unpopular period when the truth came out, but if and when they were re-elected, he would just have to manage the situation.

Mr. Charest has been ahead of everyone. He has played out his crappy hand of cards masterfully, bluffing out the press, the electors and the opposition.

Now, with the benefit of hindsight, we can understand Mr. Charest's plan to survive and can only marvel at his political acumen.

When Charest decide to go ahead with the election and brazen it out, he concocted a grand strategy of misdirection, smoke and mirrors.
He used a minor Parliamentary procedural row with the opposition, as the 'official' excuse for the election, knowing full well that the press wouldn't buy it. So he cleverly intimated that he had called the election simply because he was ahead in the polls and was making a opportunistic grab for a majority government. It was a cynical enough motive that the press fell for- hook, line and sinker. While the press may have believed that they were two steps ahead of the Premier in deconstructing his motives, it's now patently evident that the Premier was three steps ahead of them.

Everyone, but everyone, fell for the double and triple misdirection and missed the CDPQ story completely.

Even when Mario Dumont warned of the impending disaster during the election campaign, Charest deflected the accusation so deftly, that the press never really picked up on it.

Think back, to how calmly the Premier stonewalled the press with his deadpan and dismissive demeanour;

"Let's wait and see... Blah...blah...blah.
The Caisse will report in the Spring....Blah...blah...blah....
No use in speculating.... Blah...blah"

As calm as can be, Mr. Charest never lied, but never admitted to the truth. I don't think I'd like to play poker with him.

Amazingly, the secret held. Nobody who knew the truth broke ranks, not even at the CDPQ. Could the pressure to keep quiet be a contributing factor in the burnout and departure of the then president of the CDPQ, Richard Guay?

When the CDPQ finally admitted to the losses, in it's annual report, Mr. Charest skillfully tap danced around responsibility. He has steered the ruckus over the disaster at the CDPQ, away from any meaningful conclusion that would likely cause him grievous political harm.
First he refused to hold hearings into the matter, stalling for several weeks. Then he appeared to relent and change his mind. He agreed to hold hearings, but refused to appear before them.

There is a popular term for his actions, it's called 'Rope-a-dope', the classic boxing tactic of letting your opponent tire themselves out with useless body blows.

After the finance minister made a less than stellar appearance at those hearings, he nipped further debate off by presenting a newer controversy, the hiring of Michael Sabia, as the head of the CDPQ, that very same afternoon. The press and the opposition went scurrying off after the story, like a dog chasing a stick, thrown by his master.

Mr. Charest's actions weren't clumsy or amateurish. Everything was orchestrated to mitigate the inevitable harm that was to befall his government in the light of the revelations at the CDPQ. His goal, from the very beginning, was to steer the unavoidable runaway train of trouble, off the track.

Mr. Charest and his government are not in great shape, but they endure. They have the chance to redeem themselves over the next three and a half years. Unlikely as it is, in politics, stranger things have happened.
There is only so long the scandal can last, given the amateur opposition offered by the PQ and a less than ferocious press.
For Charest, it's a case of keeping his head down for another couple of weeks or months. If he sticks to his plan he'll likely succeed.

It was and continues to be, a text book case of political crisis management at it's best. It's likely that one day, political scientists will teach the 'Charest Gambit' in class, as an example of politics at it's best, or maybe, politics at it's very worst.

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Francophone Buyer For Montreal Canadiens Highly Unlikely

This morning's La Presse reports that Canadiens owner George Gillett has finally put the team up for sale, after months of rumours that he vehemently denied. The reason for the sale remains unclear, but is likely related to the financial woes that the owner is suffering, in large part, due to his highly leveraged purchase of the Liverpool Football Club in England. The soap-opera like battle with his co-owner Tom Hicks and the difficulty in re-financing the 750 million dollar debt, has left Gillett reeling, as fans of the storied franchise are mounting a spirited opposition against his ownership of the team.

Gillett has a pile of other financial problems that have forced him to take out a US$75 million dollar personal loan. It isn't a rosy picture. Read about it here.

Gillett, still may come smelling of roses, Liverpool FC is the ultimate status symbol and there are still many mega-billionaires around who are interested. Unfortunately, that doesn't seem to hold true in the case of the Habs.

As for the Canadiens, it may be a case of selling at the top. The team and the arena is estimated by Forbes magazine, to be worth close to C$450 million and since that he paid only C$270 million, it's a tidy profit, considering that the Caisse de Depot and the seller, Molson's Brewery, financed most of the deal.

Who will buy the Canadiens? It's an interesting question.

When Gillett bought the team, there wasn't another serious buyer in sight. Sports teams are usually of interest to bored billionaires, while the corporate world looks upon the investment as somewhat risky. Canada and Quebec are woefully short of billionaires, especially in the current economic situation.

If Quebeckers are waiting for a francophone white knight to rescue the team, they probably shouldn't hold their breath. Quebec boasts just three or four francophones with the wherewithal to pay for the team and to date none have shown interest.

Both the Gazette and LaPresse have speculated on Guy Laliberte (owner of the Cirque de Soleil) and Paul Demarais (Power Corporation,) but both passed on the last go around, when the deal was infinitely better.

The list gets sillier with the names of Celine Dion and Stephen Bronfman being put forward. The Diva is rich, but not she's no Oprah. Stephen, has been polished up by the family as the last remaining Bronfman representative in Montreal, but he's no financial titan and at any rate, the Bronfman family fortune has been decimated by poor investments and the disastrous merger with Vivendi SA and other ill-conceived ventures in the entertainment business.

When Charles Bronfman bought the Expos at the behest Jerry Snyder and the then Montreal mayor Jean Drapeau in 1968, he did so as a favour to the city and as a last resort, nobody else was ready to pony up the 10 million franchise fee. Charles has lived in New York for years and it's foolish to believe he has any interest in the Canadiens.
When he unloaded the Expos in 1991 , there wasn't a buyer to be found, who would respect Bronfman's caveat that the team remain in Montreal.
The team's management cobbled together an ownership group of fourteen individuals and bought the team at a bargain a basement price, with Bronfman suffering a financial haircut due to his insistence that the team stay in the city.

It seems that things haven't changed much.

If the Canadiens were a difficult sale in 2001, who's going to buy it now at fair market value today?

It really leaves only one viable name- Blackberry billionaire, Jim Basillie.

His dream of bringing an NHL team to southwestern Ontario, was scotched by the NHL on several occasions and the Canadiens probably represent the next best thing.

His unquestioned love of the game and his deep pockets make him the only likely candidate.

The Canadiens could do worse.