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Sports

The Canucks Deal, Deciphered

The big loser (Burke), winner (McCaw), and why this all might be about a lucrative real estate project.

By Brian Schecter 18 Nov 2004 | TheTyee.ca
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[Editor's note: This story corrected November 20, 2004. We were incorrect in reporting that the Lee building is owned by the Aquilini family.]

With apologies to Peggy Lee, her hit song "Is that all there is" pretty much sums up the fallout from Seattle billionaire John McCaw's 50 percent sell-off of the Vancouver Canucks and GM Place arena to local developer Francesco Aquilini.

Although rumored to be in the works for some time, the new partnership caught many observers by surprise.  Aquilini had previously been part of another group of investors that included Sandman Hotels & Suites CEO Tom Gaglardi and Ryan Beedie, the president of the Beedie Group.

That consortium had come close to completing a $250 million deal with Orca Bay – McCaw's sports and entertainment holding company, only to see it come unglued, about as quickly as failed Canuck playoff run.

While many of the details of the estimated $125 million package are still being kept pretty much under wraps, leaving more questions than answers, the winners and losers in this game of hockey roulette are beginning to take shape.

Another McCammon win

Topping the list in the winners column is current owner John McCaw. The reclusive billionaire, whose family made its fortune in the cellular phone game, not only gets his long sought after local partner – giving the franchise the appearance of a community-based face and voice, he also retains short term control of the direction of the franchise through the deal's convoluted dispute resolution mechanism.

Which brings us to the other winner in this unfolding hockey soap opera – McCaw's public mouthpiece, Orca Bay CEO Stan McCammon. With Aquilini presently prepared to take a back seat to McCaw, McCammon has once again emerged victorious in this game of backroom corporate intrigue.

Publicly vilified last spring for his heavy-handed role in the firing of Brian Burke, the team's popular general manager and the man most responsible for the Canucks turnaround both on and off the ice, McCammon is still firmly in the Orca Bay driver's seat.
  
While Aquilini may have first options on purchasing future equity and majority control of the team down the road, for the moment he seems content to let McCammon continue to run the show, in turn putting an end to any thoughts that Burke could re-emerge as a corporate kingmaker in the Gaglardi-Beedie consortium.

Brian Burke iced  

Which brings us to the "losers" column.  Can you spell Brian Burke?  Like the ghost of Banquo in MacBeth, Burke's presence continues to hover over all things Canuck. There were rumors that Burke was in close contact with the failed Gaglardi-Beedie group and was poised to return to the helm of the operation once they assumed ownership control.  With Aquilini seemingly content to let McCammon run the show, any talk of Burke's return is a definite non-starter.

As for the "over-under" on Aquilini – the jury is still out.  Unwilling to divulge any hard details on the transaction (save for how eager he is to work with the existing management team, a chance to give back to the community, big hockey fan, childhood dream, yada, yada, yada), observers can only speculate on his long term motives.

While the price of entry into the local sports marketplace did not come cheap, Orca Bay has become a proven money-maker.  After years of underwriting losses to the tune of about $90 million, the hockey club and arena has been firing on all cylinders.  Over the past two years Orca Bay generated an estimated $50 million profit – clearly putting Vancouver in the "have" category among NHL teams.

With some form of luxury tax or salary cap and improved revenue sharing almost certain to arise from the player lockout, Vancouver's financial position will most likely be on even firmer footing.  Add in the club's existing strong revenue streams (86 straight sellouts, a season ticket waiting list of 1,500, local marketing juggernaut position, solid local media rights/Pay-Per View deals valued at around $15 million) and new deals with the BC Lotteries Corp. to share in the Sports Action betting games, and it becomes easy to see why Aquilini would be chomping at the bit to buy into the club.

Towering ambitions?

But the hockey side of the business is only part of the story.  From day one, GM Place Arena was conceived as part sports pleasure palace, part valuable downtown real estate. 

The original building footprint developed by the Griffiths Family, then the majority owners of Northwest Sports, called for a multi-story office tower on the site's northwest corner.

But as construction costs soared, that plan was eventually mothballed.  While the commercial real estate was never realized, the zoning for developing the "air rights" on the site remains in play.

Given the Aquilini Group's core business as a real estate developer and Orca Bay's ownership's lack of knowledge in that sector, it is not much of a stretch to see the potential synergies that could emanate out of the new partnership.

Whether all that ultimately translates into a "win" for Canuck fans is another question entirely!


[Sidebar] WHO ARE THESE GUYS?

While new to the sports and entertainment industry, the Aquilini family and their assorted corporate interests have been active in the Lower Mainland's real estate sector for over 30 years. 

Company holdings include Golden Eagles Golf Club in Pitt Meadows, as well as cranberry and blueberry farms in the Fraser Valley.  The Aquilini Group has developed over 3,000 residential apartment units in and around the Lower Mainland, plus various hotels projects in Vancouver, Calgary and Montreal. 

More recently, the company has partnered with Tom Gaglardi to develop nearly 3,000 hectares of Crown land on Mount Garibaldi near Squamish with hopes of building a four-season ski-resort. 

The Aquilini family have also been involved with a number of area charities.  Francesco chaired the $4 million redevelopment of part of Hastings park, contributing over 15 percent ($125K) of the money raised to build the Italian Garden on the site. The family also donated $700K to the Codd Wetland Aquilini Conservation Preserve in Pitt Meadows.

Brian Schecter is a writer, producer, and consultant with a focus on media and marketing, and an occasional contributor to The Tyee. He lives in Vancouver.  [Tyee]

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