January 2008 will end up being a very beneficial month for the British Columbia hockey club, with two developments in the ownership structure that will give the team only one majority owner, Francesco Aquilini, a Managing Director of Vancouver-based Aquilini Investment Group. The Business Administration graduate also owns GM Place, the arena that hosts the Vancouver Canucks' home games.

First, Justice Catherine Wedge delivered a judgement the morning of January 10th, 2008, resolving a three-year-old matter between Aquilini and his former partners, Tom Gaglardi and Ryan Beedie, over the ownership of the 50% stakes remaining in the NHL franchise. Ed Willes of The Province explained the matter that was before the court:

"In November of 2003, the height of the Brian Burke era if you can remember that far back, Aquilini is alleged to have entered into a partnership with Beedie and Gaglardi to buy the Canucks from then owner John McCaw. Former Orca Bay chief executive officer Stan McCammon negotiated the deal on behalf of McCaw. Aquilini then left Gaglardi and Beedie in March of 2004 and the latter two continued to negotiate with McCammon through the next eight months.

In late-October/early-November of that year, they believed they were in the process of closing the deal when McCaw/McCammon suddenly ended negotiations. A few days later they sold half of Orca Bay - i.e. the Canucks and GM Place - to Aquilini which prompted the lawsuit from Gaglardi and Beedie and over three years later, here we are."

According to dated laws of partnership, it defines such an arrangement as "the relation which subsists between persons carrying on business in common with a view for a profit." The courts in Britain and North America since then have interpreted this broad, amorphous "relationship" to imply some level of mutual rights and obligations. It is more than a simple contract, and there doesn't have to be a formal partnership agreement -- the court will infer a partnership from the conduct of the parties.

In this great piece from The Vancouver Sun on the matter, it states:

"The law says that a former fiduciary or partner is "uniquely disabled" from competing against his ex-partners unless they release him from that duty.

Gaglardi and Beedie insist Aquilini could not compete against them unless they gave him permission and they relied on a 20-year-old Supreme Court of Canada decision that said: "A fiduciary relationship can arise and fiduciary duties can exist between parties who have not reached, and who may never reach, agreement upon the consensual terms which are to govern the arrangement between them. In particular, a fiduciary relationship with attendant fiduciary obligations may, and ordinarily will, exist between prospective partners who have embarked upon the conduct of the partnership business or venture before the precise terms of any partnership agreement have been settled."

Judge Wedge sided with the current owner when all was said and done:

"The B.C. Supreme Court has ruled Francesco Aquilini still owns the Vancouver Canucks National Hockey League franchise outright.

Justice Catherine Wedge has ruled there was no partnership or joint venture between Aquilini, Tom Gaglardi and Ryan Beedie.

Wedge wrote in her ruling released today that even if there was a partnership, it ended in March 2004.

Wedge ruled Aquilini owed no ethical duty to Gaglardi and Beedie to refrain from competing with them for the opportunity to buy the hockey team."

For the second development, in an article published in Wednesday's edition of the Globe and Mail, we learned the team's holding company will now be known as Canucks Sports and Entertainment, instead of Orca Bay Sports and Entertainment, .

"The NHL team announced yesterday that its holding company will now be known as Canucks Sports and Entertainment rather than Orca Bay Sports and Entertainment. The Orca Bay name, in place since August of 1995, is still being used by former team owner John McCaw, who owns Seattle's Orca Bay Capital Corp.

Canucks president Chris Zimmerman said the team has long intended to change the name and planned on doing so as soon as a legal proceeding against team owner Aquilini Investment Group Inc. ran its course.

Zimmerman said the team wanted to keep "Canucks" in the name for the holding company, and didn't research whether fans felt positively or negatively toward Orca Bay. He said the new name will have some branding benefits because "Canucks" will now appear on all company items and because that brand should be identified with first-rate hockey throughout British Columbia."

To show you that these issues needed to be resolved once and for all, I leave you with these comments from a Vancouver blogger that likely summed up the collective mood in the Western region:

"It's been a long ride, 15 months to be exact, and Francesco Aquilini can now say unequivocally that he is the owner of the Vancouver Canucks, which is alright by me.

Aquilini seems to be a good owner.

He's visible, unlike former owner John McCaw and like the Griffiths Family before that; he seems to take a hands off approach.

But I'm happy with the ruling for another reason.

I'm sure Beedie and Gaglardi would be good owners, but the Aquilini victory in court ensures one thing that will benefit the Canucks.

Continuity.

There seems to be a good framework in place from management all the way down to the players and there is no longer any risk of anything being uprooted or changed.

There is a chance that if they had won, Beedie and Gaglardi might've wanted to their own people running the show.

But like they say if it ain't broke, why fix it?"

With a personal net worth estimated above $2 billion, Katz Group chairman and CEO Daryl Katz could soon add the title of Edmonton Oilers owner to his resume if his $200 million bid ($22,000 per share) is accepted by the current shareholders of the NHL hockey club, as reported in The Edmonton Journal this morning.

"It looks like it's a done deal. The shareholders I've had communication with have said they've got to go ahead and sell," said a source familiar with the negotiations. "Nobody wants to be a minority investor. They're all going to take their money and run."

A fax circulating among EIG shareholders made it clear that Plan B, the in-house attempt by some EIG members to buy the shares of all those who have wanted to sell since last fall, is off the table. In addition, the deadline for closing the sale has been pushed back from Thursday to Feb. 5, leaving more time for investors who have not yet done so to transfer their shares to Katz.

"I think they're moving forward (with the sale)," said an EIG director, who confirmed Plan B is dead.

The most fervent of the so-called Plan B proponents within the EIG, Gary Gregg, Brian Nilsson, Bill Butler, Jakob Ambrosius and Art Mihalcheon, have suspended their efforts. All but Mihalcheon are on the six-member EIG board of directors and they have agreed to concentrate solely on negotiating the sale of the company's 7,492.5 shares to Katz at $22,000 per unit. A $1-million investment made in the Oilers in 1998, when the EIG purchased them out of receivership and staved off a bid by American Les Alexander, would generate a cheque for $2.8 million from Katz and a net return of $2.3 million.

The NHL Commissioner Gary Bettman, supporter of the deal, had reservations when he first heard the announcement:

"In a previous conversation between Bettman and Butler, the substance of which was revealed to EIG investors during a Jan. 21 meeting, Bettman questioned the wisdom of selling the Oilers, not to Katz, but in general. A source who attended the meeting paraphrased Butler's account of Bettman's comments.

"Why now after you have had all the bad times and are entering good times? Why so cheap? And why, when you've got the potential to have a fantastic asset in the downtown arena that would reset the valuation of the franchise?"

The 45-year-old former lawyer's company already owns the naming rights to the Oilers arena, Rexall Place, a medicine company that is a subsidiary of Katz Group Canada.

With the franchise valued at $157 million in the latest Forbes evaluation, the article had this to say about the $150 M Katz bid announced last summer:

"This summer Edmonton billionaire Daryl Katz made an informal offer to the Oilers Investment Group to buy the Oilers for $150 million, or two times the team's revenue. The fact that a possible buyer would think the team is worth that much given its small market and revenue-poor building shows that the league's salary cap has given a boost to team values."

The storied franchise, established in 1972 and winner of five Stanley Cups, has been home to many hockey greats, with Wayne Gretzky being the most famous of them all.

Read about their rich history here.

Since the new Collective Bargaining Agreement (CBA) (read the latest NHL CBA here on The Biz of Hockey) was adopted in July of 2005, the way NHL executives administer their franchises has changed dramatically, especially with the salary cap that was agreed upon during the long and difficult negotiations that canceled the 2004-2005 season.

With a salary cap of $39 million in 2005-2006, $44 million in 2006-2007 and a reported $50.3 million this season, it is easy for a General Manager to hit-and-miss when awarding a pricey contract, reducing his room to manoeuver to fill the remaining roster spots to build a contender. Here is a breakdown of how the cap is set every year:

• The salary cap is set at $39 million per team in 2005-06. There is also a floor, with each team required to spend at least $21.5 million on player salaries in 2005-06. The cap figure covers salaries and bonuses.
• The salary cap is defined as the amount of real money a team pays out in a single season.
• Clubs are not permitted to exceed the mamximum or drop below the minimum. But a team can exceed the cap to replace a player with a long-term injury (a minimum of 24 days and 10 games). When the injured player is reactivated, the team must get back under the cap.
• The 2005-06 cap is based on projected NHL revenues of just under $1.8 billion for the season. In future years, the players are guaranteed 54 percent of "hockey-related" revenues, with the salary cap adjusted each year to meet that figure. The players' share increases if revenues rise. They get 55 percent when NHL revenues hit $2.2 billion, 56 percent at $2.4 billion, and 57 percent at $2.7 billion.
• To ensure the correct revenue split, a percentage of player salaries could be placed in escrow. When total league revenues are determined at the end of the season, the escrow account will be divided among players and owners to ensure that the target has been met. Payrolls will be evaluated at several points during the season to determine whether the escrow account is needed

While making some research for a future article that will appear on The Biz of Hockey, I found a few links where you can examine player contracts for 2008 and beyond.

- NHLSCAP.com offers an impressive spreadsheet detailing all player salaries and cap numbers until 2014-2015.

- The USA Today has also a good database for hockey player salaries.

- Wikipedia presents salaries from the 1989-1990.

When looking at the $10 million contract for periods upwards of ten years, the fact that the average salary in the NHL in 1994-1995 was $572,00 seems like such a distant memory.

Look at this: in 1996, Pittsburgh Penguing captain Mario Lemieux earned $11,35 M. This season, the highest paid players are offered $10 M (Daniel Briere, Scott Gomez and Thomas Vanek).

Anybody still think the salaries back then made any sense?

After opening the season in London, the NHL will return to Europe next season playing doubleheaders in Stockholm, Sweden and Prague in the Czech Republic.

The New York Rangers will play the Tampa Bay Lightning at Sazka Arena in Prague, while the Ottawa Senators will play the Pittsburgh Penguins at Globe Arena in Stockholm.

The games will be played on Oct. 4 and 5.

As reported by The Associated Press:

"We'll start next season with doubleheaders in two international venues," commissioner Gary Bettman said on the eve of the league's All-Star game in Atlanta. "We're all pretty excited about that."

The league clearly wants to showcase some of its top players, such as Pittsburgh's Sidney Crosby, Ottawa's Daniel Alfredsson and Tampa Bay's Vincent Lecavalier. Of course, the top draw in Prague would be New York's Jaromir Jagr -- if he's still with the Rangers.

The Czech standout could become a free agent after this season.

To add to these games, the Rangers will play European club champion Metallurg Magnitogorsk of Russia on Oct. 1 for the inaugural Victoria Cup in Bern, Switzerland.