Monday 1 June 2015

Shareholders Vote For Community Ownership

It appears the whole issue as to whether the Lethbridge Hurricanes should be sold to private owners is dead in the water, at least for a few years.

The Board of Directors held a special shareholders meeting Monday night to vote on whether to approve holding a later vote to sell the community-owned club to private owners. After a poll vote was called, (meaning all the shares represented in attendance) shareholders voted 68% in favour of sending the issue to a sale vote. However, as much as that sounds like a majority, the Hurricanes team bylaws state otherwise. When an extraordinary meeting of shareholders is called, an issue such as this needs the support of 75% or more of shareholders in order to pass. Even though 68% vote yes, the issue is effectively dead.

Here is Hurricanes President Doug Paisley who spoke about the outcome following the meeting Tuesday:




Shareholders were given plenty of information prior to the vote. The Board was very open and transparent about the team's current financial state. Here's a breakdown of what took place during the info session before the vote:

* The were 681 share represented at the meeting
* Unaudited financials given to shareholders indicates a significant loss this past season
* GM Peter Anholt announces top 2014 draft prospect Jordy Bellerive has signed with the team
* Anholt says Bellerive & other signed prospects will attend press conference on Thursday
* Team likely to announce its new Head Coach Thursday afternoon
* 1300 season tickets sold this past season. Already up to 1650 for this coming season
* Hurricanes goal is to sell 2500 season tickets
* Canes are running roughly 1000 ticket per game behind the average in similar markets
* Team has roughly 2500 shares issued. Only 1100 are considered active shareholders
* Only 20% of Hurricanes shareholders are actually season ticket holders
* Final Result: 68% "yes" and 32% "no" to hold sale vote later on
* Vote needed 75% support in order to pass as per Hurricanes team bylaws
* Hurricanes will remain community-owned

Thanks,
Pat

12 comments:

  1. Speculation suggests there were 4 shareholders that collectively held close to 200 of the 641 voting shares at the meeting last night. They voted in favor of selling. Remove those 200 for a moment and the actual vote was a landslide in favor of community ownership. I guess we will now see if people will show up and watch games. This notion of 4000 fans at a game seems crazy to me, on 2 fronts. It is crazy that so many other communities support their teams to that nature but this city wont, and it also seems crazy that this is the expectation going forward when clearly the city hasnt supported it to that level in the past. Is that the challenge being put down by this board? Here's to hoping. Can't wait for the season to start!

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  2. On the other side of the shareholder pictures, there was one with 120+ shares that likely voted "no", take him out of the picture and it is a slam dunk for "yes".
    I agree with your comment about the request for the 4000 fans per game. It is a pie-in-the-sky target. Yes it looks like Anholt is the right man for the job and his announcement of signings of high draft picks certainly is a bright light. But as he said last night, he can't comment on a .500 season or playoffs being in the picture for 2015-16.

    RJS

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  3. Season ticket numbers are misleading as the BOD put the gun to renewing season ticket holders heads by moving the early bird date to mid April so they could make payroll. I do not expect a huge bump since the ceiling has already been reached. The early early bird date is a huge red flag when it comes to the liquidity of the organization. When 2/3 shareholders (roughly using simple math) leave the meeting disappointed I do not expect numbers to improve in the near future. I would set the over/under for season tickets at 2000. Give them a couple years. This is a statement that we have heard with every new regime since the Stasiuk/Dyck days. On a side note, very classy move by the president swearing in front of shareholders. This is not being honest and forthright. It's simply unprofessional. Would you see Glen Wright or Herb Beswick doing this ever? Not a chance. I swear lots in casual conversation, but when I am in a professional business setting I have the common sense to clean it up. Stay classy Brad. Also thanks for being such a great guy and not dragging this out for 2 years. Very noble of you. You do not get credit for doing the right thing. I have a feeling the league had more to do with expediting the vote and state of the franchise rather than a BOD decision. The BOD were the ones who delayed the vote (or ignored WHL recommendation) until the season was over. The whole presentation looked like a punishment handed down by the league saying get your act together. All the buzzwords and powerpoint graphs did take me back to management school days.

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  4. I think you would be surprised that the vote was a lot closer than we think. Personally I know there were approximately 200 shares held by four persons or organizations. Those for sure voted for the sale. The 100.00 club save the community team. This is probably temporary in that I see this vote as a reprieve for this organization at least through to the end of the next season. There is no one stopping the same resolution to come forward again at the next AGM and doing the same process again next year. The Board has done an admirable job reigning things in. Two more were let go from the Hurricane office, one the next day after this extraordinary meeting. It is being reeled in big time, but will only survive if they meet there targeted revenue. Still paying out contracts to Robson and Berehowsky, so this doesn't help.

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  5. You are correct Anon 18:43. Vote was much closer than the haters wish to portray. 80 votes by one guy to sell. Like the board said they didnt do any campaigning or buying shares. This thing could have easily been swayed the other way if someone wanted to. A correction for you, Berehowsky is no longer being paid as of May 31 (the board stated that at the last meeting in March I believe) so that helps with the budget. Not sure about Robson but when they mentioned that they feel they can turn 2.6 into 2.5 million next year you would think maybe that is his salary. $400K cut from the budget in a year, I say give these guys a chance to show what they can do. If they truly can fix the business side of things then I think they deserve a lot of credit.

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  6. Should Steven Harper receive 68% of the votes in the next election, it would be considered a landslide victory and the opposition would be reeling for years to come. Joe Clark years ago received 60% of the vote to stay on as leader at a convention and he said it wasn't enough and then stepped aside. The Hurricane shareholders vote a huge 68% to sell the team and it isn't enough. A 32% vote count and the board considers this a victory and will carry on as normal. I thought I heard Doug say that if the shareholders vote to sell, then I have no trouble handing over the keys. Well we did vote with a huge majority and while we may have the keys, they changed the locks.

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    1. Yep and 60 % didn't vote for the NDP. Politics is the wrong comparison. The Companies Act is a different kettle. Under Extraordinary Meeting a 75% threshold is there for a reason. I personally counted 150 shares between three people and know full well they voted to sell. Give or take 50 people, over 200 single or under five shareholders voted to keep it as is. This threshold performed exactly as it should have in that the majority of breathing bodies with shares ruled the day. In the corporate world this applies to avoid what they call a "hostile takeover" or in looser terms a "palace coup". So you are correct in the 68% as a raw percentage, but in the corporate world you must dig deeper. I would say that 85-90 % of the bodies in the room voted to keep it community based. Now that is the true majority. The team and management has been given a reprieve to turn it around. I am sure the the motion will arise again. I don't think at this coming AGM as the team doesn't need another one of these motions hanging over their heads for another year. May come up at the AGM in 2016. Hey, I sat between two who have four votes between them, I have 5. I voted to keep it, they voted to sell it. They are not moaning and whining that my vote cancelled theirs out or they were in the majority percentage. They understand the corporate system and a poll vote.

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  7. anon 09:33 should Steven Harper receive 68% of the votes in the next election I doubt that there would be a handful of voters with blocks of shares to skew the vote. The system is broken in my opinion. I realize that the vote was 68 - 32 but that is not the true story and there is no way to confirm which way these block vote holders voted. That being said, I have to assume much of it was directed at the yes vote. Not defending the result, nor am I saying it should or should not be sold. But considering the lump proxy votes it has been rumored that were in the room, it doesn't seem that cut and dry to me.

    I will say to RJS however, that the gentleman you refer to that had the 120+ votes, who is to my knowledge the ONLY person with that many votes, was not at the meeting on Monday, and unless he has had a significant change of heart, he did not assign his proxies to anyone.

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  8. JHJ.....Thanks for clarifying the question of the shares.

    RJS

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  9. Without reading through all the emails, to my knowledge, it doesn't matter how many shares you own, you only get one vote. My Dad owns 4 shares, but only has one vote. If someone else can verify or dispute this please let me know. That is what my Dad told me.

    My Dad and I were both disappointed with the outcome of the vote (knowing that 75% was needed to get another vote of sale). The thing we discussed after the meeting was that if the Hurricanes can't make payroll and become solvent, there will be NO vote and the league will simply find a buyer and that will be all. The outcome of the vote (as the league commissioner has indicated) is not in the best interest of the franchise. Yes, he will support the team even though it is still community owned, but I'm pretty confident the league will only be more than happy to take control when the team can't pay it's bills (bills = all the loans they have on the books and payroll). I believe this scenario to be in the best interest of the franchise. However, until this happens, it seems the team has itself some semblance of a coaching staff, scouting department and GM. That won't help this coming year as the team will be VERY young and will likely miss the playoffs by a wide margin again.

    LaRon

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    1. LaRon. Your Dad is correct in that he would have only one vote where a show of hands is requested. That of course being either for or against. This applies to every motion brought before the shareholders. The exception is when a "poll" vote is called. It can be called on any motion provided the caller requesting the vote has another four persons back his/her request. In the case of this past special meeting, your father should have declared he had 4 shares at the sign in table at which point they would have given him two sheets, one for each motion, indicating he had 4 votes. His 4 votes would have been counted as 4 on the first motion, to entertain the sale, as a poll vote was called for. On the second motion, the 2000 share one, it was a show of hands, for or against, so one vote. Hope that helps.

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    2. Awesome. Thanks for the info! I'll pass that on to my Dad. That makes sense. Thanks again!

      LaRon

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