Once a year, I experience this shock, this anger, this disappointment. When the assessment of the financial value of the National Hockey League franchises is published, I balk at this historic error that was the sale of the Nordiques.
I am always amazed to see the extent to which our collective judgment on this episode has been lost in a mixture of resignation and incomprehension. We deny the blunder. The decision was swallowed up over time as an inevitability.
Over the years, we grew to hate Gary Bettman. As if our bad fate hurts us less by having a culprit to point the finger at. However, the reality is that we had a team in Quebec and we let it go.
The numbers that kill
Yes, we let the club go for $75 million. Have you seen the values this week? The Canadian is worth $4 billion, that’s 4000 million! Well, OK, CH is the second most valuable team in the league, I will not take this figure of four billion for my exercise.
Let’s go to the other extreme. Let’s imagine the arch-pessimistic scenario where, 29 years later, the Nordiques would be among the smallest values in the league, like the Jets and the Senators.
These teams are worth a billion and a half. I believe that with the history and economic growth of Quebec, the Nordiques would be worth more, but I will remain conservative. So let’s take a billion and a half as a value.
So we sold for $75 million something that is now worth $1.5 billion, so twenty times more. I did the math: over 29 years, that represents an average annual return of almost 11%. It’s huge! The Caisse de dépôt prides itself on making an average annual return of 7%.
We can debate for life as to who should or could have invested. The Depository? Other arms of government? Private investors? Shareholders from the general public like the Green Bay Packers in football? Either way, this investment would have been one of the best imaginable.
Circumstantial causes
In 1995, we argued that there was a bad alignment of the planets to sell. No salary cap, no amphitheater to match, coming out of an economic crisis. This is the ultimate blunder: losing sight of long-term value while being blinded by economic considerations.
And of course there were those who said: “Let us not put a penny of public money into hockey millionaires!” To these, I am forced to correct your failed reasoning.
The players are the only ones who have lost nothing in the adventure. They received all their millions, paying less taxes in the United States. It is Quebec that has lost enormously, in terms of jobs and benefits.
