An NHL team in Hamilton would be worth at least $300-million (all currency U.S.), according to several NHL owners and governors, as well as those in the investment banking field with experience in setting franchise values.
But only Marc Ganis, a consultant to professional sports teams and leagues, was willing to say so publicly. Ganis, the president of SportsCorp Ltd. of Chicago, said he "would not argue" with a value of $300-million. But Ganis did not want to say it was a firm estimate because of several variables, including who will foot the bill for the renovations to Copps Coliseum and how much the local television rights would be worth since the team would share the market with the Toronto Maple Leafs and the Buffalo Sabres.
One Eastern Conference owner said if the Phoenix Coyotes are sold at auction and the winning bidder moved them to Hamilton, he should pay as much as $512.5-million. That takes into account the only offer for the team so far, the $212.5-million bid from Research In Motion co-chief executive officer Jim Balsillie, which kicked off the court fight between Coyotes owner Jerry Moyes and the NHL.
The owner said the $212.5-million offered by Balsillie would go to the team's creditors. Then he should pay $250-million to $300-million on top of that as a relocation fee and to reflect the value of a franchise in Hamilton.
Lest anyone think that is too much, the owner said in an e-mail message yesterday, he would pull his own chequebook out in a heartbeat if the same opportunity came to him.
Balsillie would quickly recoup his investment, the owner said, even if he kept his ticket prices lower than those of the Toronto Maple Leafs, who have the highest prices in the NHL. The average price for a Leafs ticket last season was $76.15.
"I would pay that," the owner said in the e-mail message. "It would be repaid [in profits]in five years, at most."
The owner said a Hamilton franchise "would sell out every game and sell tickets at a 25-per-cent discount to Leaf Land. I KNOW the math."
Balsillie and the NHL are waiting for a decision from U.S. Bankruptcy Court Judge Redfield T. Baum on whether they should mediate a relocation fee for the sale of the Coyotes. Balsillie issued a statement yesterday indicating he is willing to pay a fee, but did not say how much. Ganis told The Globe and Mail last November that the value of a second team in Toronto would be between $400-million and $600-million. Ganis said Toronto and the surrounding area is the best hockey market in the world.
This is backed up by a court filing in the Coyotes bankruptcy court case. Andrew Zimbalist, an economics professor at Smith College in Massachusetts and a leading sports economist, said in a declaration the NHL itself estimated there are between 2.5 million and 3 million NHL fans in the Toronto-Hamilton area compared to 1.9 million in the New York-New Jersey area, which has three NHL teams.
The reason a team in Hamilton would be worth less than a second one in Toronto, Ganis said yesterday, is that "a fair amount of the value is being within the city of Toronto itself. Generally the teams that play in the heart of an urban market are valued at a greater number than those in the suburbs or even further out."
Hamilton can argue it is an urban market but, Ganis added, "It's not Toronto - which is one of the great urban centres of the world."
Still, the Steel City is not being sold cheaply by investment bankers and by those in the NHL. An estimate of $300-million means Balsillie, if he manages to buy and move the Coyotes, would sit fifth on the most recent valuation of NHL teams compiled by Forbes magazine. The list, published last October, places the Leafs first with an estimated value of $448-million, while the Montreal Canadiens, who will announce a winning bidder for the team in a couple of weeks according to sources, are third at $334-million. The New York Rangers are second at $411-million, while the Detroit Red Wings are fourth at $303-million.
Others were a little more reticent than Ganis, although they did not disagree. One investment banker said he could not make a public estimate because it would require a great deal of study.
"I'd really need to see a model [of how the franchise would operate]" he said. "Making an estimate now is like seeing a picture of a car and saying what it's worth. You haven't looked under the hood.
"You have to look at all the revenue streams. How much do they get for local media [broadcast]rights, ticket sales, all sorts of things."
Still, the banker was willing to say that a team in Hamilton would be worth about $300-million "without looking under the hood."