Wednesday's sale of the legendary Montreal Canadiens to U.S. businessman George Gillett merely serves to highlight the financial difficulties of owning a professional sports team in Canada.
After all, there were no Canadian offers for the famed Habs.
"I contacted many Canadian individuals personally but there was no interest," Molson president Daniel O'Neill said. "George contacted me two hours after the announcement in June and came to see us the very next day."
In Wednesday's deal, the Montreal-based beer company sold 80 per cent of the team and the arena for $275 million.
A critical element in the Canadiens sale was a commitment by Gillett to keep the money-losing team in Montreal, where it has been a storied franchise for much of the last century, but has recently fallen on hard times -- both competitively and financially.
In the 1990s, Canada lost two NHL clubs, the Quebec Nordiques and Winnipeg Jets after the franchises were sold and moved to the United States.
Other NHL teams, including the Ottawa Senators, Edmonton Oilers and Calgary Flames, have faced financial troubles in recent years.
Compared with the United States, it's tougher to own a Canadian-based NHL team in a league whose currency is the American greenback.
Costs are higher in Canada because of a weaker currency, higher local taxes and less government help.
Since Canadian hockey fans buy their tickets with loonies and the players are paid in U.S. bucks, the difference to the average team on that score alone is $16 million Cdn a year, says Julie Stevens, a lecturer in sports management at Brock University in St. Catharines, Ont.
Add to that the higher income taxes Canadian-based players pay on their fat salaries, it's harder to attract NHL stars here.
Even Gillett seemed stumped by the dollar issue, when asked Wednesday why anyone would want a business that has revenues in Canadian dollars and most expenses in American dollars.
"A good question," Gillett said, with a chuckle. "Perhaps you can help me with the answer."
The City of Montreal provided its own helping hand Wednesday, cutting local taxes by some $4.3 million a year.
"It's still one of, if not the highest tax bill in the country," O'Neill said, before adding "it's a big improvement."
Gillett called the tax break "an extraordinarily important part of the total (sale) package."
Molson, which built the Molson Centre in Montreal for $265 million in 1996, has been paying about $11 million a year in local taxes, more than all the U.S.-based hockey teams combined pay to their local governments.
In the last 10 years, all six NHL teams in Canada have built their own arenas, on which they have to pay high municipal taxes, noted Stevens, who has done research in the economics of hockey.
Compare this to the City of Nashville which paid for the city's arena, paid a portion of the NHL expansion fee to attract the Predators franchise, offered a low rent and waived all property, business and school taxes, Stevens said.
A year ago the federal government offered to match any financial assistance that cities and provinces were ready to cough up, but then changed its mind under a hail of protests with the same general bent: How could government justify public help for sports stars earning more than $1 million a year?
In any case, Stevens said any government assistance for sport will likely go for amateur sport, following Canada's mediocre performance at last summer's Olympic Games.
"My impression is the initiative should be coming from the NHL," said Stevens.
"If there isn't a will within that organization to try to keep franchises in Canada, then no matter what the government tries to do it won't happen."
The NHL provides some compensation for the currency difference, but she described this as peanuts.
"The NHL has shown no will to assist these Canadian franchises."
Gary Bettman, the NHL's commissioner, said the league doesn't want to see any more Canadian-based teams move to the United States.
"I don't want to have to move any more clubs, particularly out of Canada and we have no intention of doing so," Bettman told the Fan 590, a Toronto all-sports station, on Wednesday.
"We're going to do everything in our power to ensure that all of our teams are competitive and viable where they're located. If that means down the road in collective bargaining we have to make some fundamental changes to do that, that's something we're going to be committed to."
In Montreal's case, both of the city's other professional teams belong to Americans: The Expos of baseball's National League is controlled by New York City art dealer Jeffrey Loria, and the Canadian Football League's Alouettes, which made a successful comeback since 1997, to financier Robert Wetenhall.
Among Canadian NHL teams, only the Toronto Maple Leafs are flourishing.
The Ottawa Senators seem to have finally found a buyer they sought for a long time, New York billionaire Nelson Peltz.
The Calgary Flames, locally owned, are losing money and looking for investors.
The Vancouver Canucks have been losing millions, although GM Brian Burke has helped stem the red ink.
In the United States, the Florida Panthers and Carolina Hurricanes have been looking for buyers.
With the current players' contract expiring in 2004, the industry is already bracing itself for a possible strike or lockout that could wipe out the entire 2004-05 season.
Once a collective agreement is signed, however, the teams' value is expected to grow.
Molson insists that a stipulation will be written into any sale agreement that the team will never leave Montreal.
The brewer that has owned the team for most of the past 43 years agreed to remain the Habs' major corporate sponsor for the next 20 years, and to invest $150 million into it during that period.
By Allan Swift