Tuesday 16 December 2014

WHL Commissioner Talks About Hurricanes

I had a very good chat with WHL Commissioner Ron Robison this week, regarding his thoughts surrounding the current state and future of the Lethbridge Hurricanes.

There is no secret the club has been struggling on and off the ice the past number of seasons. Robison met last week with members of the Hurricanes Board of Directors to discuss a number of issues, one of those surrounding a motion put forward by a shareholder at the last Annual General Meeting to have shareholders hold a vote as to whether they would like to keep the team community-owned or sold to a private owner.

Robsion says in the WHL's view, having that vote at the next AGM this fall serves little purpose. He would like the shareholders meeting moved up to sometime early in the new year, so the ownership model for the franchise can be settled going forward.

Robison's entire interview with me is below.

Thanks,
Pat

25 comments:

  1. Is the league financially helping the Hurricanes in any way?

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  2. Considering the fact that NO commitments to Anholt (and vice versa) have been made by either party (past the end of the current season) and also the comments made by the commish, the facts regarding the $1.4M lost over the past number of seasons and the statement that the league want a shareholders meeting ASAP in the New Year, the examples of PG and Regina private ownership models? Seems pretty clear that the writing is on the wall and the sale of the franchise is imminent, Mr. Paisley is a successful business man and likely also realizes that this franchise is now broken (financially) beyond repair, he will do the right thing, the league will now make sure of that! Fresh air blowing into town!!!

    LBJ

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  3. What Robson wants and what is legally doable may be two different things. Under the articles and by laws of the Hurricanes, no motions by shareholders can be made other than at the AGM, which was done. The motions is then dealt with at the next AGM. If the motions was to be heard at this AGM then the proper procedure for ensuring it was on the agenda must be followed. Too late for this year so that is why it is being brought at the next AGM. If this motion is successful it does not mean the team will be sold. It will give the board authority (which it currently doesn't have) to receive offers for the club. Once the offers are in, the board could choose not present them at a special meeting (i.e the offer is crappy) or if they do then a special meeting to present the offers to the shareholders must be called. Once an offer is met with 75% approval the prospective sale can go ahead. That is unless we live in the world of we don't give a s--t what the rules and laws are lets just break em and move on. I guess the board could call a special meeting however they would be under the same obligation they are now. Get shareholder approval to explore selling the club and then go from there as above. This isn't just simple, like Paisley, sell the club. He can't and neither can the board.

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  4. Well said Anon 12:12, but there is a way around the process that you have laid out. If due to a very difficult financial situation (close to that now) the board, informs the shareholders that the club can no longer operate, then the board must decide (not at the AGM) how to proceed. Also if the WHL decides that this franchise can no longer operate under its current structure, they can force a sale.
    In reality, the WHL has the final say, vote or not.

    RJS

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  5. thanks: I would presume it would be of some sort of emergency order where failure is imminent. We are taking one gigantic assumption that the 1200 or so shareholders all want to sell it. The legal dept of the Canes says that a 75% vote is required of those present to authorize a sale. Lots of hurdles. The dub may indeed "seize" the franchise, but they cannot usurp the legal framework that is in place regarding community owned. I kind of chuckled when I listened to the commish regarding Regina and Prince George. They were private before they were sold to the new groups. I suspect Parker (Regina) and Brodsky (Prince George) got tired of loosing money. If the Giants (Toigo) has lost half a mill over the last couple of years, what would make this franchise that appealing having already lost 1.4 mil plus. Prince George were bought by Hamhuis Brewer and a third party. Hamhuis and Brewer have collectively made 60 mil from NHL contracts and they are not done yet. Suspect they needed a write off? Someone with awfully deeps pockets needs to step up and I don't think Versteegs are deep enough. You never know. This is one ugly situation the club is in, who knows who will own it, or if it will survive. Also the commish was espousing a business plan in place during his paddy cake with City Council. I would imagine that the plan is now burning in file 13.

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  6. Nice interview. I think the Lethbridge community should just be thankful at this point that the WHL commissioner is giving Lethbridge a HUGE opportunity to have the hurricanes remain in Lethbridge. There is nothing to say that if we leave this into the shareholders hands and we go completely broke and the WHL takes over, that the WHL will uproot this franchise and we will be left with no WHL team. I would hope we are given all the information as shareholders when we go vote sooner than later so that we have a clear understanding as to what could happen if things remain status quo. The impression that I got is that the commissioner is allowing the shareholders a chance to vote to sell the team, and would allow us an opportunity to have some say as to who the future owner of the Hurricanes is.
    -Long Run

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  7. I apologize for my ignorance but with the team in this much financial trouble who is paying the bills? I know they got a line of credit last year but I have heard it is all gone so now what. Did the city put a guarantee on the line of credit?

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  8. LOL...well, the other option is for the city of Lethbridge or the share holders or both, to pony up the $1.4M, wipe the slate clean and let the new board have their kick at the cat? Don't kid yourselves, if and when this franchise goes up on the block, there will be a lineup, there are many if not all of the small market owners that would give their left **t to run their franchises in a market such as Lethbridge! The years being led around in the wilderness by non hockey people need to end now!

    JT

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    1. Well obviously it would have to be deep pockets. 9 mil for the franchise. 1.4 to pay off the debt. And another 2.5 mil a year to operate with 2 mil in revenue and a continued loss off 500k a year. The problem is and always will be since time immemorial in Lethbridge, win and we will support you. The City swears up and down that they have not subsidized this team and I have that in writing. Someone loaned the club 300k last year privately. It was done and whether it was legal could be a question. Prior they had a line of credit. This thing is a train wreck. The 9 mil fee is the standard (Sakatooon) sale. Dub would have to alter their own policy to sell it for less.

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  9. Versteeg, Setogucci, Sutters, other friends, local investors...? A cooperative group would not need to worry about pocket depth and would likely be - cooperative - about running the team. Moving forward under the assumption of recent revenues and loses is irrelevant. Fans and Corporate sponsors will want to support a newly owned team simply out of HOPE. Too many have stated 'boycott' to not realize the revenues would improve. Improve on ice performance and revenues would improve too. New ownership is not likely to face as dire of a financial reality they are currently facing.

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    1. Those are nice assumptions. First the above would have needed to have kept most of their contract money. Second they would want to part with a large chunk if they were interested. Versteeg has played the interest card a few times. Will believe the heart felt diatribes if it is decided to sell the outfit and the money is ponied up and is in the bank. Any suggestions as to what should be done with the funds should it be sold. PS. The Sutter boys are still working so they may not have the cash you think they do. I suppose they could get a loan.

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  10. First off someone is helping financially and it is not city hall or it would show up somewhere within the budget. No proof, but I think that Ron Sakamoto is assisting with some of the financials. It would make some sense as he may be aligning himself to purchase the team and the dollar amount given may be seen as a reduction in price based on pre payments. Not a long shot if you think about it, local guy, head of whatever fan group thing they created and has many more contacts in Lethbridge and North America with money in the bank, any doubts look at paradise canyon and the investors in that.

    Secondly, it has been well documented that 75% of current shareholders are needed to allow the board to sell the team. However if you have ever looked through the book of shareholders there is probably close to 25% of the book that are either dead, moved, or the hurricanes just plain don't know where they are. With that in mind we need 75% of the remaining shareholders to A. show up and B. vote to sell the team, and the likelihood of either of those happening are slim. I believe the shareholders are still split in their want to sell or not to sell, so with the 25% missing at best we would have 45% of current shareholders vote yes to sell the team. This is exactly why the ex president welcomed the vote to sell with open arms because he knew as some of us know it's a very long shot based not off of opinion but the basic numbers.

    Where does that leave the team then? I believe the league would have no choice but to force a sale. The league would make every effort to abide by bylaws and policies established when the team came back to Lethbridge, but at some point the league has to look not just at financials, but player development and the overall reputation of the WHL. The hurricanes on these fronts and more are pulling the WHL down and at some point the league, which might be allowed to by laws established at league level, force a sale based on the presumption that this franchise is damaging the league, it's reputation and it's overall value. Bad teams come and go in every league around the world, but few remain this bad in so many ways for so long with no light at the end of the tunnel. Even in the WHL Prince George has had there ups and downs, but there have been ups where as in our case in has been a downslide since this the bulk of the last board got elected 7-8 years ago and held on to absolutely destroy all the hard work of previous boards and efforts put forth by the community to get a team back to Lethbridge and make sure it stays.

    Finally, when you talk about the losses, remember the true loss in numbers is not 1.4 million. The hurricanes had 1 million sitting in the bank before they started this "rebuild" and blew through that quickly with a run for the memorial cup in Lethbridge, icing bad teams and lets not forget the season tickets being sent to the prince and princess of England (I know they weren't going to sell those tickets anyway but still!). So when you talk about losses the true number is 2.4 million dollars, 1 million that they had in the bank and 1.4 million they didn't have. What a shame, can someone "say sense of entitlement". All that had to be done was continue down the path that was laid, out in the first round of the playoffs and hope for next year, based off of the last few seasons that would be like winning the Stanley cup for Lethbridge.

    Steve S.
    Still a proud shareholder who believes in community owned teams, just not this one anymore.

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  11. I was just looking through some tweets tonight and noticed an account called "AngryCanesFan" who tweets things such as "The best part of the game today was not getting into a 10 car pile up on whoop-up". The description reads "I'm posting things about the Lethbridge Hurricanes that piss me off. This is not a PG account. Language will be used to its fullest extent. This is my therapy."…Now obviously people are free to make whatever accounts they want, but I am disgusted by the fact that this person followed many of the players using the account. It is one thing to use this account to voice your opinion, but to also follow a bunch of the players with the account?? We are not talking about NHL players here, just a bunch of kids. As if they don't already have enough negativity and struggles to face, they need (what I'm assuming is a grown man) to make an anonymous twitter account and then follow the very kids they are speaking of! Pathetic in my mind. So to whoever has chosen to misdirect their anger at a bunch of teenage boys and is so choked that he/she needs "therapy"- GET A LIFE.

    -HC
    (Great game tonight for the boys, I will take the small victories for now- keep battling!)

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    1. Great post. These twitter trolls that dont have the courage to use a real name, or try to make a positive difference are disturbed. I will extend that thought to the chosen media guys who continually try to root up any negative information they can find and spin doctor it to satiate their personal desires. The problems with this team are being worked on, changes are being made, yet these sorts of people think it is appropriate and warranted to effect teenage hockey players. Get a life you guys. What will you possibly talk about when this team is sold to a private owner and then moves it to another city. Just think of all the spare time you trolls will have. I know the media guys are a band of brothers and there is really no sense in trying to reason with them (not sure this post will even get Pat's approval), but hopefully they will recognize their words are causing harm to the hockey players.

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  12. Folks, a private owner is not as good as it sounds... as mentioned on the radio yesterday morning, the Edmonton Oilers are a privately owned hockey club achieving... well, very little...

    Setoguchi is most likely a few weeks/months away from his NHL career coming to an end... where will he find the $$ ? Sell all of his cars?

    As mentioned above, the Sutters still work "normal jobs" and I doubt the League will want the Club owned by borrowed funds... it will likely want someone with both cash in the bank AND cash coming in regularly.

    Would a cooperative really work? Ten guys will never agree on every hockey decision... we may see a similar mess down the road... don't forget what happened when the Chilliwack Bruins owners disagreed a few years ago...

    I doubt this Club would be valued at 9 million... Lethbridge has a smaller arena and market than Saskatoon, maybe 6-7 million (plus debt) would be my estimate.

    If there is a MAJORITY owner available who is also LOCAL, then I'm all for it... but I'm not for a group that includes a couple NHL "kids" who may have some extra cash... nor the local Sutters who (are great guys, but) can never hold down a hockey job or achieve any significant business success.

    PS: nice win in MJ, the guys blocked shots and played with energy... the playoffs are still in reach.

    as for "AngryCanesFan", if he/she is that angry at something way out of his/her control... we (and the players) can only assume how much he/she must hate his/her own life... it's both sad and hilarious, karma will take care of it... my guess is it's either a 14 yr old living his mother's basement, or a 40 yr old living in his mother's basement.

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  13. Okay...so what's the share OR shareholder value?
    Suppose $9-million is the number. SOLD!
    Pay off the debt...$1.4-million (for now). That leaves a difference of $7.6-million.
    Not sure how many "shares" exist, but let's use "1,200 shareholders" for the sake of easy math. Value per shareholder would seem to be $6,333 each.
    I don't know what the "buy in" was, but how many shareholders would take a cheque for $6K and change to get out of this mess?
    I imagine it's not this simple...

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    1. Well for starters the shares under the charity act have no value. So your out of luck for the 6333 apiece. The 100.00 buy in for a share is classified legally as a donation with no intrinsic value then or in the future. The 100.00 is gone. Still leaves a problem of what to do with the balance.

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    2. This is a really important point that has to be understood...the shares have no value, other than the right to attend the shareholder's meetings. Regardless of who buys this team (make no mistake, someone WILL buy this team!) the shareholders will receive nothing.

      The other thing that we all seem to forget is that we, as shareholders, only get to decide whether we will pursue a sale for the team. That is the end of the sharholder's, the BOD's and anyone else associated with this team's responsibility. Ultimately, the only entity that can, and will decide who can buy this team, is the WHL. We can all talk about all of the local "boys" that we would like to be owners, but in the end, all they can do is put in an offer like everyone else. Saskatoon is a good example. Local interests were expected to be the new owners, the WHL instead chose a car dealer from Red Deer (?) Edmonton (?) as the new owner. Let's just hope that the new owners are good hockey people, and can get this club back on the path to credibility.

      Chuck

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    3. Thanks Chuck...
      As I sit and observe from afar, hoping this situation quickly improves dramatically, I cannot help but smirk to myself over this $100 buy-in. I'd be willing to bet $100 of my own dough that there are probably a whack of these $100 buy-in shareholders that walk around the city of Lethbridge promoting themselves as "owners". Sounds like a golf course with a board of directors, not a hockey team! It's like some retired goof on Board imposing his will on management because he's paid annual dues. LOL! (The 'Canes might really have the right guy as a GM now!) So ultimately, someone who coughed up $100 a few years ago maintains the right to vote on how this organization moves forward? I just think this is spectacular...the kind of system that, albeit it legal and tender, will always lead to some measure of dysfunction. I think a $100 donation in return for this kind of power is just a joke...

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  14. Let me clarify a couple of things....ANON 19:30 Ron Sakamoto made it perfectly clear to the public and media when he was introduced as part of the "Advisory Group" that he was not the least bit interested in buying the Hurricanes. ANON 9:32 I am one of the shareholders and have been since day one. Each share was purchased at a cost of $100. If the team was sold and if the shareholders were paid back the value of their share would still be $100. There is no increase of the share which was for the most part a donation. The net balance of the purchase price would then go into a "community sports fund" of some kind, much like what happened with the money from the purchase of the Kamloops Blazers.

    RJS

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  15. That is mostly correct except the repayment of 100.00 per share. There is no value so there is no compensation to shareholders if club is sold. I have also confirmed at this point (today) that Sak has no interest. However, things do change but I would not hold my breath.

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  16. Maybe I was miss informed, but... Are Red Deer's Coach, GM, and Owner all the same person? Seems like a good model?

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  17. I think so. Brent Sutter

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    1. Brent Sutter in fact is the coach, gm , and owner of the Rebels , as is Kelly McCrimmon of the Brandon Wheat Kings .

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  18. Good interview and clarification in the Herald today by Dale Woodward. The Pres. backs community owned.

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