Tuesday, June 16, 2009

On David Braley, the Argonauts, the CFL and the NHL

[Photo: B.C. Lions owner David Braley (left) with the Grey Cup, B.C. Premier Gordon Campbell, former CFL commissioner Tom Wright and 2005 Grey Cup Committee Chair Dennis Skulsky in 2004. From gov.bc.ca].

Quite the story in this morning's Globe and Mail from David Naylor and Matthew Sekeres. According to the Globe, B.C. Lions owner David Braley "secretly put up half of the $2-million franchise fee when David Cynamon and Howard Sokolowski purchased the Toronto Argonauts out of bankruptcy in the fall of 2003, and continued to lend money to the CFL club". The story says the deal was made without informing then-CFL commissioner Tom Wright (who I spoke with not that long ago about the Coyotes-to-Hamilton situation) and has continued to the present day without the knowledge of current CFL commissioner Mark Cohon.

No sources are named and all sides appear to be denying the story, but in very carefully worded terms. For example, consider these comments from Sokolowski:

"When asked yesterday if Braley had an ownership interest in the Argos, Sokolowski vehemently denied it.

'Absolutely not, David Cynamon and myself are the owners,' he said. 'There are no formal financial records whatsoever in terms of him being an owner.'

When asked whether there were any financial arrangements between the Argos and Braley, Sokolowski replied: '[Braley] is not an owner. He has never been an owner. It’s a private company. That’s it.'

That's quite the non-denial denial; Braley doesn't have an "ownership interest", but there's
no denial of financial arrangements between the parties. Later in the story, Braley says he's loaned money to various CFL owners from time to time, including the Sherwood Schwarz group that sold the Argos to Cynamon and Sokolowski in 2003. That would support claims of his involvement in the franchise transfer. Like the one offered by Sokolowski, Braley's denial of ownership interests is also very limited:

'I don’t have any ownership interest at all with the Toronto Argonauts and I never have. … There is no paperwork and there’s nothing to be able to prove that.'

Those comments certainly doesn't prove the Globe story, but there is enough there to give it some credence. The full truth of the matter certainly is still up in the air for the time being, though. The bigger question is what it means if these allegations are true, and that's one Globe columnist Stephen Brunt tries to address with this piece. Brunt makes some good points about how Braley may have become involved and how his involvement may have preserved the Argonauts (and by extension, the league; without a Toronto franchise, say goodbye to national sponsorship and television deals). I'm not sure if I agree with the last part of his piece, though:

"In stepped Braley with a solution – one that he could certainly afford, but one that would be controversial in most leagues. He offered Cynamon and Sokolowski some financial assistance – and no one would have to know. ...

Almost all good – except that, on an absolutely fundamental level, you can’t do that in professional sports. Not even if it’s just a “loan” between businessmen. Not even if you’ve done it before for other owners in the past. Not even if there’s no paper trail, no formal partnership agreement."

It isn't entirely true that "you can't do that in professional sports". Almost exactly the same thing happened in Nashville when Craig Leipold sold the Predators to a "local" ownership group featuring noted huckster Boots Del Biaggio. As the Nashville Tennessean's Brad Schrade reported last year after Del Biaggio went bankrupt, Leipold loaned money to both the local group and Del Biaggio. The $10 million he loaned to the local group (in short-term financing) was disclosed to the league; the extra $10 million he gave Del Biaggio apparently was not. Moreover, if Del Biaggio's group hadn't become involved, Leipold would apparently have had to loan the local group $40 million.

Just over a month after completing the Predators' sale, Leipold bought the Minnesota Wild. The league obviously knew of the $10 million loan he still had out to the Predators, as it was listed in those sale documents. They didn't know about the extra $10 million he gave Del Biaggio, but NHL commissioner Gary Bettman told the Tennessean that it might not have made a difference.

"It isn't clear how having a continued stake in the Predators would have affected Leipold's ability to purchase the Wild or another NHL team. The league, like most major pro sports leagues, frowns upon owners having significant stakes in multiple teams.

Asked whether this would have affected Leipold's ability to buy another NHL team, Bettman said: 'Not necessarily. It's something that would have had to be evaluated at the time.'"

Rumours of a similar seller-financed deal in Tampa Bay when Oren Koules and Len Barrie took over the team have also arisen, and the league has loaned massive amounts of money to the Phoenix Coyotes to keep them running. Thus, it might not be all that uncommon to see this in the NHL. Moreover, ownership interests in multiple teams isn't exactly verboten everywhere; consider MLS, where Clark Hunt owns both the Columbus Crew and FC Dallas (and used to own the Kansas City Wizards) and the Anschutz Entertainment Group owns both the LA Galaxy and Houston Dynamo, as well as arenas and sports teams all over the place. Loaning money to another owner is considerably below owning franchises in two separate cities, and it sounds like the Braley deal may be more of a loan than anything else.

Furthermore, consider the people involved. David Braley is not Jerry Jones or Al Davis, looking to make himself the team's de facto general manager. The portrait of him that emerges in Bob Ackles' excellent book The Waterboy is a limited one of a reclusive owner who hires good people on the business and football side and lets them run the show. That certainly happened in B.C. under Braley's tenure with Ackles and coach/general manager Wally Buono. If the story of massive loans to the Argonauts' owners is true, it isn't difficult to imagine Braley being even less assertive on the football side when he's only partly involved (and well-known as the owner of another team). It would be very hard to see him as some sort of tyrant that marched down and started telling the football guys how to run things.

Therefore, I don't think there's any substance to the competitive concerns. The deal's image is still problematic and it's certainly not a good idea in general to have an owner involved in multiple franchises if it can be avoided, but this is perhaps the exception that proves the rule. For one thing, the CFL absolutely needs a strong, successful Toronto franchise. With the Argonauts doing well, it's a national league; without them, it's much more of a regional one. There's zero question of relocating the franchise, but it was certainly difficult to find a buyer for it in 2003 thanks to the disastrous Schwarz era. Thus, something had to be done to sweeten the deal. Moreover, if you have to have an owner involved in multiple franchises, a guy like Braley who's largely hands-off on the football side would be the perfect candidate.

What's concerning is the secrecy surrounding the deal and the (apparent) lack of information on it received by two separate commissioners. Presume for a moment that the allegations reported in the Globe are completely accurate as to Braley's involvement. If that information was known by everyone in the league and released at the time of the sale, would it really be a big problem? Imagine a press conference where Wright explains the situation and says that Braley has generously offered to step forward with the necessary cash as a loan to allow Cynamon and Sokolowski to purchase the team and keep it local. The CFL could say that it's not ideal, but given the importance of the Argonauts and Braley's reputation, it makes sense. Tweak the deal slightly so Braley's only putting up 49.998 per cent of the money (and thus Cynamon and Sokolowski have a majority interest), make it clear that he can't make any decisions for the franchise without their approval, and you don't have much of a problem. Sure, it reduces Cynamon and Sokolowski's status in the Toronto pecking order somewhat (which may have been why this was kept so secret), but you don't have competitive concerns, you have the league and the fans aware of exactly what's going on and you have a strong Argonauts franchise. That seems like a good solution from this corner.

Keeping the league and the fans in the dark is a substantial problem. There has been far too much infighting and jockeying for position in the CFL over the years, with individual owners often doing what's best for themselves and ignoring what's best for the league. Often, the commissioner and the league office have been undermined, an all-too-frequent situation that former league president Jeff Giles described very well in his book Bigger Balls: The CFL And Overcoming the Canadian Inferiority Complex. (By the way, Giles is now the athletic director at McMaster University, where Braley is one of the most influential alumni and has an athletic centre named after him). The owners need to step back and do more to support commissioner Mark Cohon, and that means keeping him in the loop on these sort of deals. The CFL needs a strong, united front more than ever at the moment, given the rising threat from the NFL and the Buffalo Bills' potential relocation. Secret deals between owners that undermine the commissioner's role do not help with that.

As a final note, it's interesting to consider this in light of Cynamon and Sokolowski's supposed bid for the Phoenix Coyotes (who are still in limbo after Judge Redfield T. Baum's most recent decision). Any interpretation of this story suggests that that bid was a sham, certainly in the way Bettman presented it. If this was a straight loan, there's no way in hell Cynamon and Sokolowski have the cash to afford an NHL franchise; if they can't raise $2 million to buy a CFL franchise on their own, how would they get into the NHL? If it was an ownership interest to minimize their potential exposure and losses from owning a CFL team in Toronto, it's highly unlikely they'd want an NHL team in Phoenix, as that's a much worse situation. Of course, the thoughts from this corner were always that their bid was either a stalking horse to help inflate the franchise value or a plan to buy the team, run it for a season or two and then either move it to Toronto or sell it to be moved somewhere else, picking up an expansion franchise in Toronto for their service. This certainly doesn't help anyone take Bettman's claims about their interest in operating a team in Phoenix seriously, though.


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