The Hab-nots

A U.S. businessman purchased a hunk of Canada's patrimony out of the bargain bin last week. George Gillett Jr. spent $184 million (all figures U.S.) to buy the 21,273-seat Molson Centre and 80.1% of its legendary tenant, the Canadiens. Considering that Molson Inc. spent $190 million to build the arena, which opened five years ago, Gillett walked away with a $6 million discount on the building and got the Canadiens, winners of a record 24 Stanley Cups, for free.

Understandably, there was some panic in Canada over the sale to an American, but after the paranoia subsided—thanks to guarantees written into the sale prohibiting Gillett from moving the Canadiens—the citizenry took the view that what matters isn't the country of a man's passport but the color of his money (which in Canada is red, blue, green, brown and sort of violet). If Canadian-born Peter Jennings can read Americans their evening news and Quebecoise chanteuse Celine Dion can give birth to little Ren�-Charles in Florida, there's no good reason that Gillett, 62, a ski-resort developer from Vail, Colo., who failed in a bid to buy the Avalanche and kicked the tires of the Panthers, shouldn't grab the Canadiens.

The real question is why no Canadian businessman or company was interested in hockey's best brand name. Molson searched for a Canadian buyer but failed, undoubtedly for the very reasons the brewery wanted to dump the Canadiens and their arena. Montreal, like the other five Canadian NHL teams, pays most of its expenses, including player payroll, in U.S. dollars and receives most of its revenue in Canadian currency, at the moment worth about 66 cents on the dollar. Because of that imbalance and the annual $7.5 million tax bill on the Molson Centre—knocked down to $4.6 million by the city, a key component of the sale—owning the team made little economic sense. For Gillett, on the other hand, the Habs represented a good value and a prime turnaround property. Still, when a storied franchise with the NHL's second-highest attendance, 135 leased luxury suites and decent TV contracts can be bought for a song, the tune sounds a lot like Woe, Canada.