News Article: Bruce McNall, the man who 'made hockey cool'

[kovacro]

We all are aware of the stories regarding BM but this is a pretty good read if you have a few minutes...

Bruce McNall, the man who 'made hockey cool' in Hollywood

Click to read more...

 

[LAKings88]

I’m grateful to him because 88-89 brought me in as a 10 year old fan. I didn’t know anything about hockey. Gretzky was my starting point and obsession as young kid falling in love with hockey. I learned the history of the Oilers and NHL from there. Strange that was thirty years ago. Time flies.

 

[Bondoao1]

I’m grateful to him because 88-89 brought me in as a 10 year old fan. I didn’t know anything about hockey. Gretzky was my starting point and obsession as young kid falling in love with hockey. I learned the history of the Oilers and NHL from there. Strange that was thirty years ago. Time flies.

Wow same here, down to age and all...

 

[Rorschach]

89-90 for me, 14 at the time.

 

[The Tikkanen]

I was 15 in 1988, I knew who Gretzky was due to Sports Illustrated but knew nothing about hockey or the Kings. My parents also bought a house in Yorba Linda that was built right before putting in cable TV lines was standard. So we had the 7 standard TV channels (no Prime Ticket) up until that summer when they dug up the streets and installed cable . When the Kings traded for Gretzky and changed their team colors I went from not caring or knowing about hockey to making sure I watched every night. I understood Gretzky was the Jordan or Ruth of hockey so I needed to watch nightly. It also got me to start playing hockey when I was about 20 and 25 years later I still play 1-2 times a week. Without McNall none of this probably happens.

 

[Fishhead]

Bunch of old people around here. Anyone need some Salonpas? I have a case of it under the sink.

I got into the Kings just a couple years before McNall and when he showed up things completely changed, and for the better. Regardless of what unsavory things he was doing, he certainly elevated the teams popularity to a new level. It took a long time to get that first cup, but he certainly had a part in that even though he was out 20 years before it happened.

 

[GoldenBearHockey]

I don't remember my first Kings game, had to have been about 78-79, because I started playing the year after, McNall absolutely helped develop SoCal hockey, solely by bringing LA in, if that doesnt happen, you don't have half as many rinks as there are now just in that region, let along the southern US.

 

[Quattro]

It is quite remarkable how loyal his friends and former players are to him considering what a charlatan he is.

 

[Ziggy Stardust]

It is quite remarkable how loyal his friends and former players are to him considering what a charlatan he is.

Although he turned out to be a crook, he did treat his players well, and it shows how much his friendship meant to Wayne that he held off his jersey retirement at Staples Center until Bruce was out of prison.

The article posted above makes mention of the Kings almost being sold to SONY. I also dug up some articles back when those talks were happening, and the possibility of a new arena was being discussed to be built where the Hollywood Park stood. Now that site is being converted into a new football stadium that will house the Rams and Chargers.

The signs of Bruce's financial struggles started to creep up in late 1993.
Is Sale of Kings in Store? : Hockey: McNall says he would be willing to give up majority interest in the team to facilitate building of new arena.

King owner Bruce McNall said Thursday that he would be willing to give up majority ownership of his team to facilitate the construction of a new arena.

But McNall, who became sole owner of the team in March, 1988, added he would not be willing to relinquish managing control of the Kings.

Sony, specifically its movie unit, has been mentioned most often as a possible partner, but McNall would not confirm the speculation about Sony or any other other potential partner.

"To me, (equity control) really isn't as much the issue as a combination of things," he said at the NHL's Board of Governors' meeting in Laguna Niguel. "I have to look at what is in the pot. The more important thing in some ways is the building, from my standpoint."

The Kings play their home games at the Forum, which they share with the Lakers.

"I'd be happy to keep 100%, if it could be done that way, and I'd be happy to sell the greater majority," McNall said. "What I am not interested in is giving up control of the team. I like the idea of owning and running the team. If somebody said to me, 'You trade me a big chunk of the team for a big chunk of the building.' That would be intriguing.
"Equity control is different than operating control."

The negotiating process has been long and complex. There were reports last week that a deal was imminent, but one Sony source said they were premature.

Previously, McNall has said he hoped to have an announcement by Dec. 15.

"Hopefully, something will come up in the next month," he said Thursday.

Financial World assessed the worth of the Kings at $71 million, based on data from the 1991-92 season. Peter Guber, chairman of Sony Pictures, is a longtime friend of McNall's and an avid King fan.

Adding credence to the rumors, Guber showed up in Montreal at a Kings' game on Nov. 27 and spoke briefly to Coach Barry Melrose.

McNall passes puck past Sony

Although Los Angeles Kings chairman and chief executive Bruce McNall was close to a deal to sell a portion of the hockey team to Sony Pictures Entertainment last week, he has instead formed a partnership with IDB Communications.

At a Great Western Forum press conference Wednesday, McNall confirmed a partnership with IDB chairman and chief executive Jeffrey P. Sudikoff and director Joseph M. Cohen to build a $ 125 million-$ 150 million sports arena in the L.A. area.

But Sony may not be entirely out of the sports arena picture if interactive theater facilities are part of the project, as envisionedby McNall and Cohen.

McNall will swap an undisclosed equity stake in the Kings for an undisclosed stake in the new project, which is contemplated as a 20,000-seat arena skedded for the Kings’ first home game in fall 1995 or 1996. IDB is a diversified communications company primarily involved in long-distance telephone services.

The agreement comes on the heels of reports that Sony Pictures Entertainment was attempting to complete a reported $ 415 million deal for stakes in the Kings and Lakers — the latter team owned by Jerry Buss — as well as participation in the construction of a new arena; that project was to be built on vacant real estate at Hollywood Park, the Forum’s Inglewood neighbor.

Sources said SPE chairman Peter Guber and president and chief operating officer Alan Levine were actively pursuing the deal as late as last week.

And by March of '94, before Gretzky scored goal #802 (and received a Rolls Royce for that accomplishment), the jig was up.
Sports | Has Kings' Owner Reached Financial Limit? | Seattle Times Newspaper

The impending sale of part of the Kings has stirred interest in McNall's financial well-being.

McNall, said "there are no problems" with his finances and that he is eagerly looking forward to building an arena for the Kings, and possibly the Lakers. He said he is the victim of negative rumors orchestrated by unidentified parties who would like to see the Kings deal fall apart "for their own benefit and profit."

Separating the fact from rumor, it is easy to see that McNall has had a challenging year. For example:
-- He helped engineer a deal that brought a National Hockey League team to Orange County this season. He will receive $25 million over several years for giving up exclusivity in the Los Angeles area.
-- Creditors sued him after he allegedly defaulted on a bank loan and failed to pay a Hollywood studio that alleged he owed it money.
-- His rare-coin business, which does well in inflationary and boom times, has fallen prey to the soft national economy.

Add to all this the money-losing Canadian football team, a steep debt level and a Forum lease that limits McNall's ability to profit from the Kings' popularity and you have a situation worthy of examination.

McNall and his lawyers are working hard to close the $60 million agreement to sell a controlling interest in the Kings. The buyers are Jeffrey Sudikoff, Los Angeles telecommunications entrepreneur, and his associate, Joseph Cohen. McNall chose Sudikoff, chief executive of IDB Communications, over an affiliate of Sony Pictures Entertainment. Sony only wanted to buy a minority interest in the Kings, as well as a piece of the Lakers basketball team from owner Jerry Buss.

The tentative deal says a lot about the changing fortunes of someone who was lecturing audiences three years ago for $48 a head on "Turning Your Passions Into Profits." He will soon be left with a much smaller piece of his most passionate investment, the Kings. As recently as last season, McNall said he would not consider selling the team.

There are signs that McNall may be unable to continue calling all the shots for the Kings as he does now. McNall said he will retain operating control after the deal is completed. But prospective partner Sudikoff said in an interview that he will be an active partner. "I'm definitely an interested investor. I'm not just a financial investor. I'm not doing this because I think it's fun," he said.

McNall said the partial sale is necessary to help him achieve a longtime goal of building a $150 million state-of-the-art arena in the Los Angeles area that gives the Kings more revenue opportunities than they have at the 27-year-old Forum.

The Hard Fall of a Super Salesman

Mr. McNall's theory of marketing seemed to be this: pay a shocking price, create excitement, then ride the expansion.

In 1974, he paid $420,000 -- four times the previous record -- for the rarest of coins, an Athena decadrachm from the fifth century B.C. In hockey, after he bought the Kings for $15 million, he agreed to pay that much over 10 years to pry Wayne Gretzky from the Edmonton Oilers. In similar fashion, Mr. McNall and Mr. Gretzky, along with the comic actor John Candy, bought the Argonauts of the Canadian Football League in 1991 for $5 million, then signed Raghib (Rocket) Ismail of Notre Dame to a four-year $14 million contract.

After Mr. McNall's purchase, the Kings played to sellouts, film stars paraded at the games and sales of Kings' merchandise soared. Mr. McNall then persuaded Michael D. Eisner, Disney's chairman, to start an expansion team in nearby Anaheim in 1993. Mr. McNall got $25 million from Disney for accepting a team in his home territory.

But people familiar with Mr. McNall's finances said the Kings never made money during his ownership, largely because the team had to make high payments to play its home games in the Great Western Forum, which is owned by the owner of the Los Angeles Lakers basketball team, Jerry Buss.

In May, the Argonauts were sold to a unit of the Canadian brewer, John Labatt Ltd., for undisclosed terms. Since 1993 Mr. Ismail has played for the Los Angeles Raiders of the National Football League.
In the coin world, some people said Mr. McNall created artificially high values for ancient coins by introducing investors like Mr. Hunt to a market dominated by collectors. When the market fell in the late 1980's, Mr. McNall turned to Merrill Lynch.

Three limited partnerships raised $7.2 million, $25.1 million and $16.1 million, in 1986, 1989 and 1990, respectively. But conditions made it difficult to achieve the profits that Mr. McNall had forecast, forcing the first two funds to liquidate before schedule, a former executive in Numismatic Fine Arts International, Mr. McNall's coin company, said.

Though the funds lost money, Mr. McNall made some. For instance, one fund lost $9.5 million in 1993 but paid Mr. McNall's companies nearly $130,000 to manage and sell coins.

Still, by mid-1993, employees say, the coin company had problems. In December, the Bank of America told Mr. McNall that he had defaulted on a $90 million loan, collateralized by the Kings, and threatened to force the team into bankruptcy if he failed to sell it by the end of the month, bankruptcy records show.

Another Bank of America client, the Sony Corporation, offered to buy the Kings, but Mr. McNall held out for better terms and found them from Jeffrey Sudikoff and Joseph Cohen, executives at the IDB Communications Group Inc., a telecommunications company sold last month to LDDS Communications.

The deal did not close until the first week of May, when the Bank of America agreed to finance $50 million of the $60 million purchase price for a 72 percent stake.

It is unclear why the bank did not force Mr. McNall to sell his entire stake and step down as team president. Court documents show that the bank took the $60 million in proceeds and a separate $12.5 million note from Disney, half its payment for expanding into Anaheim with the Mighty Ducks. The bank also insisted on a 10 percent stake in the new company formed to build an arena.

The bank agreed to release Mr. McNall from its remaining $30 million claim, so the collateral -- Mr. McNall's 28 percent interest in the Kings and a smattering of his other companies that are insolvent -- could pay other creditors.

Mr. McNall's empire was fast coming unglued. The Federal grand jury had subpoenaed his business records and those of his associates. His movie company, Gladden Entertainment, creator of "Mr. Mom" and "The Fabulous Baker Boys," was forced into bankruptcy in April by debt. About two weeks after the Kings were sold, three of Mr. McNall's banks, Credit Lyonnais, IBJ Schroder and European American Bank, filed a petition for involuntary bankruptcy, a case that has since been converted into a Chapter 11 reorganization.

Of course, McNall would sell the team to investors who, like him, did not have the monetary means to purchase the team, and so the team went into bankruptcy. And that is how Philip Anschutz and Edward Roski swooped in and saved the Kings.
McNall's 28% May Hold Up Sale of Kings : Hockey: Group led by billionaire Anschutz signs letter of intent, but bankruptcy could be a problem.

An investment group led by Colorado billionaire Philip F. Anschutz and Southern California developer Edward P. Roski Jr. has signed a letter of intent to buy the Kings, but it is far from a done deal.

A major stumbling block remains the 28% controlled by Bruce McNall's bankruptcy trustee, R. Todd Neilson.

King chairman Joseph Cohen, in a statement on Friday, acknowledged the offer to purchase 100% of the team. Sources close to the negotiations said the complex deal is worth $75 million, but it isn't a straight cash deal because there are other considerations, namely the 28% and other liens. The 28% is critical and essential because it includes an option to repurchase up to 80% of the team, according to McNall's bankruptcy lawyer, Richard L. Wynne.

Because of that wrinkle, several sources questioned the likelihood of an eventual transaction. "It's a deal shopping for a team," one source said. "It's going to have to satisfy a lot of people, that's why I think it's a possibility, not a probability."

A written offer was submitted to majority owners Jeffrey P. Sudikoff and Cohen--who purchased 72% of the team for $60 million from McNall about a year ago--as well as to Neilson. The offer is subject to several other conditions as well as NHL approval.

Anschutz has been part of a group trying to bring an NHL team to Denver, but he has no plan to move the Kings. Sources say he wants to build a new arena for hockey and basketball in downtown Los Angeles near Dodger Stadium, on land near Chinatown owned by his company, Southern Pacific Railroad Corp.

Former Sony Pictures Entertainment Chairman Peter Guber and Los Angeles investment banker Gary Winnick also have been heavily involved in discussions and may eventually be investors, although an industry source said their role is unclear. Guber, in late 1993, was heavily involved in negotiations when Sony almost purchased both the Kings and the Lakers before McNall turned to telecommunications executives Sudikoff and Cohen.

Laker and Forum owner Jerry Buss, through his spokesman Bob Steiner, said he would have no comment on what is "the Kings' business."

Buss, as owner of the Forum, will also have a role to play in the negotiations, because the cash-starved Kings are under a long-term lease there, and he has been assisting Sudikoff and Cohen this past season. Sudikoff and Cohen have been hit by a series of problems since their purchase of the team--the 103-day NHL lockout this season and the failure of the team to reach the playoffs for the second consecutive season.

McNall's problems, too, have cast a large shadow over the organization. The former majority owner pleaded guilty in December to two counts of bank fraud, one count of conspiracy and one count of wire fraud as he defrauded six banks of more than $236 million over a 10-year period. His sentencing, set for July 6, apparently has been delayed until January.

If successful, the Anschutz group would become the fifth owners of the Kings and the third since 1988. Anschutz, 55, is a reclusive Denver billionaire who made a fortune in oil as a young man when vast quantities of it were discovered on ranchland he owned in Utah and Wyoming. He then parlayed that fortune into shrewd investments in railroads, real estate and stocks.

 

[Axl Rhoadz]

It also got me to start playing hockey when I was about 20 and 25 years later I still play 1-2 times a week.

Are you still horrible? ;-)

 

[The Tikkanen]

Are you still horrible? ;-)

My trophy case is full.

 

[fivehole32]

I didn't start really paying attention to hockey until after the Kings acquired Gretzky. I am in the same boat as everyone else, I started playing street hockey not too long after and now I still play ice a couple times a week. McNalls book is pretty amazing to read. He pulls no punches and admits to all of his wrong doing. Had one of his multiple ventures hit, Bum Equipment, movie production house, Kings, etc he would have been able to get out of his tremendous debt that he was shuffling between all of his companies. I think the most amazing thing was his production company. He names all the movies he passed up and the terrible movies they produced instead. (I cant remember them off the top of my head.) His only hit was the Fabulous Bake Boys if I remember right.

 

[Axl Rhoadz]

My trophy case is full.

Participation trophies

 

[kingsholygrail]

My trophy case is full.

Are they Messier leadership awards?

 

[Maynard]

My trophy case is full.

As I recall, you are still owed at least one more trophy.