Back in November, a few paragraphs of an Associated Press wire story out of Erie, Pa., made their way into Canadian newspapers and websites. The item noted that Sherry Bassin, owner and general manager of the major-junior Erie Otters of the Ontario Hockey League, lost a $4.6-million (U.S.) judgment to Daryl Katz, owner of the NHL’s Edmonton Oilers.
On the face of it, is seemed just another business-deal-gone-bad – the settlement amount was for a loan Katz advanced to Bassin, plus interest, nearly three years earlier. It was before the Otters had drafted the bankable teen phenom Connor McDavid, and Bassin needed the money to prop up the financially struggling franchise. Then, for reasons that weren’t made clear in the wire story, Katz called the loan. Bassin couldn’t pay, so off to court they went.
But a closer look at the dispute and what led to it reveals the indecorous underside of sports franchise ownership, not to mention the fickle relationships between teams and their communities, and the fragile “partnerships” between owners in various leagues. So much for the honour in pro sports.
The details will follow, but in short, Katz made the deal with Bassin not because he was interested in the welfare of fans in Erie. Instead, if he could quietly buy the Otters, he could move them to Hamilton and take control of his ultimate prize – the hockey lease at Copps Coliseum – even though a fellow NHL owner, Michael Andlauer, was the existing leaseholder at the Hamilton arena. Andlauer, who made his fortune in the transportation and logistics industries, has a minority stake in the Montreal Canadiens and also owns their American Hockey League farm team, the Hamilton Bulldogs.
Bassin agreed to be his front man in the Hamilton transaction because Katz insisted on a low profile. No one is saying it straight out, but the timing of Katz’s move on Copps in late 2012 suggests he may have been interested to use the Copps lease as leverage to get more public funding in Edmonton in a deal to build a new downtown arena for his Oilers.
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Bassin, now 75, had wanted to sell his hockey team to Katz to pay his debts and ensure his own financial well-being. But he became collateral damage. The Oilers called his loan in June, 2013, demanding he sell the team to pay them back. Even though the Otters have a rebuilt arena, and McDavid’s star power has boosted the team’s attendance to more than 4,700 fans per game (fifth-best in the 20-team league), Bassin didn’t earn enough from operations to pay back the Oilers.
In pushing for a quick sale, the Oilers were still intent on taking over the Otters. Documents show that Katz’s people interfered with Bassin’s attempts to get a new arena lease in Erie in 2013. Katz himself wrote a letter to OHL commissioner David Branch in October, 2014, threatening to make the legal dispute with Bassin public if he did not transfer ownership of the Otters from Bassin to him.