The hockey billionaires Forbes: The world's richest people
Andrew Farrell, Forbes Published: Monday, February 25, 2008
Daryl Katz is spending about US$200-million to buy the Edmonton Oilers, but he's not stopping there. He's promised he'll open the checkbook to sign and keep top talent."To be clear, I am committed to building a winning team here in Edmonton, and I would play to the salary cap every year to help make sure that happens," said Katz in July. At the time, he was trying to woo an ownership group that was reluctant to sell and Edmonton fans that worried about the effect of a new owner on their team.
Katz's bank account suggests it wasn't just an idle promise. We estimated the Canadian owner of Rexall pharmacies was worth $1.9 billion when we ranked the world's billionaires last March. That's good news for Oilers' fans. An analysis of payroll data shows that pro hockey teams with billionaire owners spend more on their players than teams without billionaire owners--and their teams rack up more points.
Eleven billionaires currently own all of or a stake in 10 of the NHL's franchises. (Not included in this group is the Minnesota Wild. Craig Leipold bought a stake in the club this January but technically his wife, Helen Johnson-Leipold, is the billionaire in the family.)
According to payroll data from Nhlscap.com, the teams with billionaire owners are on track to spend an average of US$47.8-million on player salaries during the current season. The 20 teams without billionaire owners are on track to spend an average of US$45.1-million this season.
That US$2.7-million difference between the two groups is a notable amount in the NHL. It's enough to pay this year's salary for an All-Star like Henrik Zetterberg. The Red Wings winger is tied for third in the NHL in total points this year.
There's a correlation between the extra spending and winning. As of Friday, billionaire-owned teams were averaging 62.3 points for the season. Teams not owned by billionaires were averaging 59.8 points. (Teams receive two points for each win and one point for each overtime loss.)
At the same time, a huge bank account is no guarantee of goodwill from fans. The wealth of billionaire owners makes them an obvious target for criticism if the team appears tightfisted.
This year's Buffalo Sabres provide ample evidence. They are owned by Thomas Golisano. He built a US$2-billion fortune with the payroll company Paychex, but fans complain that he has done a poor job of managing the Sabres' payroll.
The team lost a string of talented core players through free agency, and its record clearly shows the effects. Last year, the Sabres won 53 games, more than any other team in the league. This year, the Sabres are fourth out of the five teams in their division.
Even though Golisano has taken a low profile with the hockey team, Sabres faithful are pointing the finger at him. One fan lamented in a letter to the Buffalo News that Golisano and management have made the club "the farm team for the rest of the NHL teams who have competent management."
It's a lesson Katz should take to heart. Assuming he gets the approval to buy the Oilders from the National Hockey League, he should know that his billions won't mean much to fans if he doesn't spend them on the team.
