Friday, 18 July 2008

Musings About the Mess in Nashville

by Jes

Over at FanHouse, Kevin Schultz pointed out the fact that the NHL's screen process for potential new owners leaves a lot to be desired. Instead of a slum-dunk owner like Jim Balsillie (a guy who actually knows hockey), we get corporate crooks like Henry Samueli, the train wreck that is the new ownership of the Tampa Bay Lightning, and now this whole "Boots" Del Biaggio fiasco.

As an accountant, I know that any multi-million dollar purchase requires a whole lot of due diligence. If you are handing over the keys to the castle, you have to make sure the buyer actually has the money, and won't burn the place down after a couple of weeks.

Reasons for due diligence:
1. To ensure the dude has enough $ to pay for the purchase of the team.
2. To ensure the dude has enough $ to sustain the team and keep it going.
3. To ensure the dude won't ruin the team and/or bring harm to the team(run it into the ground, give it a bad name, etc)
4. To ensure dude's reputation/criminal record/dealings won't hurt your own name/brand/business.

As we well know, the NHL did not do its due diligence on "Boots" Del Biaggio, and the guy didn't have all of the money he claimed to have.

To rub salt in the wounds? Doug Bergeron, one of the potential investors for the Preds, recalls "Boots" bragging about how easy the NHL was on doing their homework. (Assist to Mirtle)

"Boots bragged to me that he was able to convince Bettman's office to overlook the need for his audited financial statements because it was too much work."

So, why isn't Bettman feeling more heat for this?

In almost any other industry, failing to do your research on such a buyer would land you on the firing line. Instead of looking like a professional business, the NHL appears to be an old boys country club where friendships matter more than actual business acumen.

Honestly, I haven't been following this story all too closely. If you want to know more, head on over to "On The Forecheck" blog where our favourite Preds blogger has the full analysis of this sick situation.



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