There has been considerable spin by the Katz group and some of their friends (HERE, HERE and HERE) to convince Edmontonians that the real reason why they can't fund their own arena is that Canadian owners have tried that in the past and have all gone bankrupt because of the arena.

This simply isn't true.  Or at least the arena was not the only or even major factor in any of the cases.

In this three part series we will look at the true story behind the bankruptcies.

Part 3: The Montreal Canadiens and the Molson Centre (now Bell Centre) (Part 1 HERE, Part 2 HERE)

In Montreal, Molson Breweries purchased the Montreal Canadiens from Peter and Edward Bronfman in 1978 for $20 million ($65 million in 2011 dollars).  Eric Molson (father of the new owners) oversaw the building of the Molson Centre (now Bell Centre) in 1996 at a cost of $230 million ($312 million in 2011 dollars).

In 2001, Molson Breweries sold 80.1% of the Montreal Canadiens and 100% of the Bell Centre to George Gillett Jr. for a reported $275 million ($336 million in 2011 dollars).

For their $250 million investment in the team and the arena, Molson Breweries received $275 million from George Gillett Jr.  Further, they still retained ownership of 19.9% of the Montreal Canadiens.

For George Gillett Jr.’s $275 million investment, in 2009 he sold his 80.1% of the team, the Bell Centre and Gillett Entertainment back to the sons of Eric Molson (Geoff, Andrew and Justin Molson) for a reported $550 million ($578 million in 2011 dollars), although some sources suggest the price was even higher.

Of course, deals can be structured in many ways.  For example, Gillett could have paid $274,999,999 for the Montreal Canadiens and $1 for the Bell Centre in 2001, resulting in a $229,999,999 loss on the cost of building the arena.  Alternatively, Mr. Gillett might have paid $1 for the Montreal Canadiens and $274,999,999 for the Bell Centre, resulting in a $44,999,999 profit on the sale of a five year old arena. 

However, when packaged together and considering Molson Breweries still retained 19.9% ownership of the team, there was no loss experienced from the sale of the team or the arena in 2001.

By: Scott Hennig
Posted: October 24, 2011
Topic: Alberta

Join Us   |   Donate