BUSINESS

GOOD SPORT

CHRIS WOOD June 20 1994
BUSINESS

GOOD SPORT

CHRIS WOOD June 20 1994

GOOD SPORT

Arthur Griffiths expands his family’s sports holdings beyond hockey

They both play right wing and they’re both short. But where superstar forward Pavel Bure is muscular and morose, his boss,

Vancouver Canucks president Arthur Griffiths, is slightly built, amiable and articulate. The contrast should mislead no one though. With as much daring and energy as Bure demonstrates on the ice, Griffiths, the 37-year-old younger son of late broadcasting baron and Canucks founder Frank Griffiths, is about to score an entrepreneurial hat trick that should impress even his dour Russian protégé.

If his game plan holds to the month’s end, Griffiths hopes to emerge as: majority owner of the Canucks; managing partner of a new $165-million NBA expansion team; and sole owner (with his sister Emily) of a new $ 163-million arena, now under construction in downtown Vancouver, where both teams would play. Reviewing the action for Maclean’s last week, Griffiths concluded: “I’m not in the hockey business.

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I’m not in the basketball business. I’m probably not even in the arena business. I like to think that the business I’m in is entertainment.”

Griffiths seems to take whimsical pleasure in emphasizing that point sartorially. His crisply starched white shirt is emblazoned on the back with the full cast of the Bugs Bunny cartoon show.

“I’ve never been all that shy,” he says.

Even so, until recently few people considered Frank Griffiths Sr.’s younger son quite ready for the major leagues.

Like the team that Bure unexpectedly sparked to this year’s Stanley Cup final however, Griffiths now aims to surprise and disprove his doubters.

The senior Griffiths, a conservative accountant who shunned the limelight, nonetheless chose to build his fortune in the entrepreneurial radio and television industry. By the time of his death in April, at age 77, Griffiths Sr., his wife, Emily, and their four children controlled eight TV stations and 11 radio outlets in British Columbia, Alberta and Ontario, worth an estimated $700 million. With the senior Griffiths’ death, his eldest son, Frank Griffiths Jr., is in position to take over the family’s broadcasting interests, concentrated in WIC Western International Communications Ltd. of Vancouver, which last week won regulatory approval for its pay television station, Moviemax. While Frank Jr. finds himself facing a challenge from Edmonton’s Allarcom group for control of his share of

the family fortune, his younger brother is set to seize full control of an entertainment empire that will soon embrace not only the new arena and basketball franchise, but also profits from game broadcasts, souvenir merchandising, arena concessions and even parking.

The centrepiece of the younger Griffiths’ game plan is a proposal to radically restructure ownership of both the Canucks hockey team and the new arena. In an offer that must be formalized by the end of this month, Arthur and sister Emily Griffiths-Hamilton propose to increase their joint share in Northwest Sports Enterprises Ltd., which owns the Canucks hockey team, to as much as 64.5 per cent from just over 28 per cent, at a cost of up to $27 million, depending on their final stake. In exchange, the offer required Northwest’s minority shareholders to approve the transfer of the holding company’s 100-per-cent interest in the newly named General Motors Place arena to a numbered B.C. company controlled by Arthur and Emily. That approval was granted by most minority shareholders in May. Barely a month earlier, the NBA awarded the league’s expansion franchise in Vancouver to a Griffiths-led private partnership.

Griffiths owes his scoring opportunity, however, to hockey and inheritance. At the same time as his father was underwriting the establishment of the NHL expansion Canucks in Vancouver, Arthur was playing right wing on his high school hockey team. He developed a love for the game and for the larger-than-life aura of its characters. In 1980, he began I working for Northwest Sports, holding a & variety of what he calls “goferish” jobs. u Within five years, he became the family’s primary representative in the Canucks’ management.

Griffiths’ rookie years with the club were far from reassuring. By 1985, the Canucks’ on-ice performance was so bad that the team dwelled in last place in its division from October to March. Season ticket sales plummeted; the franchise bled red ink. And much of the blame fell on Griffiths. “There were some things I did that were downright stupid,” he acknowledges. “There was a perception that I was the voice of ownership, that I was also the general manager and the coach and sometimes I was a player.” Since hiring former player Pat Quinn as Canucks general manager in 1987, however, Griffiths has learned to leave the dressing room to him.

While Quinn rebuilt the team on the ice, Griffiths sought to improve its bottom line, beginning with freeing it from what the family had long considered a disadvantageous tenancy at the Pacific Coliseum. The arena 20 km east of downtown Vancouver holds just 16,000 people and has room for fewer than 14 lucrative corporate boxes. Moreover, the landlord, the Pacific National Exhibition, refused to share any of its concession or parking revenue with the team. In Arthur’s view, the solution was a franchise-owned arena, closer to downtown, with a cut of all the associated concessions flowing to the owners. Northwest acquired a building site near Vancouver’s existing B.C. Place stadium in August, 1992. By September, 1995, it will house a new 20,000-seat arena with 88 private boxes costing an average of $90,000 per year, named after its prime sponsor, General Motors of Canada Ltd.

But when Arthur proposed acquiring a basketball team as well, the better to fill seats in the new arena, the rest of the family drew the line. ‘We were not, the family was not, going to make an investment in basketball,” brother Frank Jr. says emphatically. “That was absolutely clear from Day 0.” The reason: the NBA’s $165-million entry fee.

Like any good forward confronted by a traffic jam at mid-ice however, Arthur simply shifted gears and made for the wing instead. Going outside his own family and the other major shareholders of Northwest Sports in his pursuit of an NBA franchise, the younger Griffiths found partners—and capital—in Bruce and John McCaw, two members of a Seattle business clan that owns one of the continent’s largest cellular phone companies, McCaw Cellular Communications Inc.

At the same time, Griffiths has moved to head off a looming risk to his core asset: the hockey club, which by early 1994 had issued $112 million in guarantees of construction loans for General Motors Place. Griffiths’ worry, he says, was that “if the arena doesn’t succeed, you lose the arena and you also lose the hockey team. I think my father, a conservative accountant, recognized that all along.” The younger Griffiths’ response, which was already under way when Frank Sr. died, was to reorganize Northwest Sports to put distance between its various assets. In addition to separating legal ownership of the hockey club and the arena, under the control of Griffiths and his sister Emily, their proposal requires them to relieve the hockey club of any future obligation for the new arena’s debt.

That move, however, has not satisfied some of Northwest’s minority shareholders who say that Griffiths is not paying enough for control of the company and its interest in the new arena. Even though, after sweetening his offer twice, he now proposes to pay cash or debentures worth $75 for each Northwest share taken up, twice their highest market price in 1993, the investor with the largest minority stake still insists the figure is too low. “We regard that as a long way below the real value of Northwest Sport shares,” argues Arthur Rennison, president of Vancouver-based Primex Investments Inc. “Basically, he’s saying Northwest Arena Corporation is worth nothing, which we don’t agree with. We think it’s worth tens of millions of dollars.” And even though other minority shareholders have approved the move, Rennison says that his company will sue to amend or block the offer if it proceeds.

I Rennison’s legal forechecking is not Griffiths’ I only immediate challenge. He must also soon u sign a general manager for the as-yet unnamed NBA team, who will then begin assembling an

athletic staff and player roster for the team’s first

season in 1995. Griffiths proposes to resolve the team name, with the advice of the league, by midsummer. Less public but no less important is the task of securing the new financing that Griffiths has promised for construction of General Motors Place. He will need to find yet more money in order to secure new agreements with several key Canuck players whose contracts expire in coming months; already, Bure, for one, is reported to have extracted a commitment for as much as $5 million a year over a five-year contract. “One of the concerns I have in all this,” Griffiths acknowledges, “is that I may let a ball drop.”

CHRIS WOOD in Vancouver

Recalling his earliest encounters with hockey players, Griffiths’ eyes light up as he reaches for words to describe their personalities: “Mavericks, egomaniacs, risk takers,” he suggests. Later, in wry acknowledgment of the obligations he has taken on, the small man in the cartoon shirt notes: “I’m not allowed to gamble in basketball or hockey, so I’d better call it another word. Maybe,” he pauses, “maybe risk taker.” Like Bure.