[This article originally appeared as a two-part series in St. Louis Game Time during the 2007-08 season, which was the 25th anniversary of the Blues nearly moving to Saskatoon. Consider this to be a follow-on to our series on the Rise and Fall of the Salomons, the Blues' first owners. It is presented here in its entirety. You might want to print this one out.]
By Jeff Fahrenkrog
The St. Louis Blues' 2007-08 season marked the 25th anniversary of the most bizarre, tumultuous year in team history. In 1983, Ralston Purina Company (Ralston) sold the Blues to a group out of Saskatoon, Saskatchewan, which is a tiny prairie town approximately 250 miles north of the Montana (and U.S.) border with a population at the time of 160,000 people.
What followed was the NHL's rejection of the Saskatoon bid, lawsuits and countersuits, no party representing the Blues at the 1983 Entry Draft, ownership of the team reverting to the NHL, and an eleventh-hour resuscitation of the team by a California businessman when the Blues seemed destined for contraction.
This is the tale of Saskatoon Blues.
Emile "the Cat" Francis was hired by the Blues original owners Sidney Salomon II and his son Sidney Salomon III as the executive vice president, general manager and coach in the spring of 1976. As the Salomons' health and financial stability faded, Francis somehow convinced Ralston chairman R. Hal Dean to buy the Blues, the Arena and the $8.8 million in debt on both entities as a "civic responsibility" on July 27, 1977.
Hockey legend Emile Francis, a native of Saskatchewan, while trying to keep the Blues in St. Louis unwittingly put a chain of events in motion that nearly sent them to his birth province.
Dean always insisted that Ralston Purina wouldn't have entered the hockey business if the Blues had an alternative to leaving St. Louis, and that Ralston expected to be a temporary owner until a suitable buyer in St. Louis could be found.
At the end of 1981 however, Dean retired. Ralston's new chairman, William Stiritz, wanted to refocus the company on its core pet food business. Although the company had sales of $4.8 billion in 1982, Stiritz only saw the Blues and the Checkerdome as a division that had lost $10.2 million in the six years of Ralston's ownership. Now in charge, Stiritz decided to put the Blues up for sale.
On January 12, 1983, Ralston told a stunned St. Louis community that it had received a purchase offer to buy the Blues from a Saskatoon based company known as Batoni-Hunter Enterprises, Ltd. Batoni's president, Bill Hunter, was one of the founders of the World Hockey Association in 1972, and an owner of the WHA's Edmonton Oilers before they joined the NHL in 1979. Hunter claimed that after all the necessary approvals had been granted, his group was ready to break ground on a $43 million 18,000-seat arena that could be completed in time for the 1983-84 season.
Although fans in St. Louis were shocked by the January announcement, the Blues players first became aware of a possible move on December 7, 1982, on a road trip in Edmonton. There, representatives from the Saskatchewan Board of Trade were circulating detailed pamphlets entitled "Saskatchewan in the NHL."
Not surprisingly, the unsettling announcement had a major effect on team performance. The Blues finished the 1982-83 season with a 25-40-15 record for 65 points, the fifth fewest points in team history.
Saskatchewan native Bernie Federko and teammates like Brian Sutter, Rob Ramage and Mike Liut couldn't overcome the impending bad news, putting together one of the worst records in Blues' history.
Closing delays led to a relatively quiet period until April 19. On that day, Ralston authorized the sale of the Blues to Coliseum Holdings, Ltd (formerly Batoni-Hunter Enterprises) for about $12 million.
On May 2, Francis sought formal release from his contract as the president and general manager of the Blues and left to accept the same posts for the Hartford Whalers. Shortly thereafter, 60% of the remaining Blues employees were fired. Remaining staffers included the accounting department, scouting staff and coach Barclay Plager.
The only remaining obstacle preventing the Blues move to Saskatoon was the authorization by 75% of the NHL Board of Governors for the sale and transfer of the club.
On May 18, by a 15-3 vote, the Board rejected Ralston's sale to Hunter's group. Among other things, the NHL felt such a small Canadian outpost had no chance of being self-sustaining or financially viable. This decision effectively ended Coliseum Holding's bid for the Blues and the club's transfer to Saskatoon. It also insured three months of chaos.
Less than a week later, on May 24, Ralston filed a $60 million anti-trust lawsuit in US District Court against the NHL, the 18 owners who had abstained or voted against the franchise sale and transfer, and NHL President John Ziegler. The suit alleged that the defendants "violated federal anti-trust laws and breached the duty of good faith and fair dealing by voting to reject the sale and transfer of the Blues" to Coliseum Holdings, Ltd. The suit asked the court to issue injunctions "to prevent the NHL from attempting to require Ralston to operate the team and to prevent the defendants from interfering with the sale and transfer of the club."
Ralston inflamed the situation even further on June 3, with its announcement that "it had no intention of remaining in the hockey business and no intention of operating the team next year." Accordingly, they were "tendering" the Blues to the NHL "to operate, sell or otherwise dispose of in whatever manner the league desires." Once the league decided what to do, Ralston stated that it expected the NHL "to remit any proceeds from a dissolution or sale to the company. If the league decided to operate the team, Ralston expected to receive fair value for the franchise."
Ralston's stunning declaration left what was remaining of the Blues organization in limbo for the 1983 Entry Draft, which was to be held only five days later in Montreal. For months Dennis Ball, the Blues highest ranking official still employed, and his scouts had been preparing for the ‘83 Draft. Ignored by Ralston for weeks as to what they should do, four staff members traveled at their own expense up to Montreal, hoping that the authorization to participate would come, thinking that Ralston couldn't have been so blinded by its anger over the situation that they would forfeit their picks at the draft.
Shockingly, that call never came. Ralston stated that they "were not required to participate, and therefore would send no representative" to the draft. And so they didn't.
It was the first and only time in NHL history that a franchise did not participate in an entry draft.
Despite Ralston's short-sighted and asinine decision, the Blues were somewhat spared from total disaster. Back in 1982, Francis had traded the Blues first (for Rob Ramage) and second (for Guy Lapointe) round picks, leaving St. Louis' first selection to the third round, No. 48 overall. At that point, players like Steve Yzerman, Pat Lafontaine, Claude Lemieux, Cam Neely and Tom Barrasso had all been taken. The best players the Blues had the opportunity to take with their other 10 forfeited draft choices included Esa Tikkanen, Kevin Stevens, Rick Tocchet and Dominik Hasek.
Rob Ramage was acquired for one of the Blues' to-be forfeited picks, helping to avert total draft disaster in 1983.
Less than 24 hours after the Blues were forced to forfeit their draft picks, on June 9, the NHL filed a $78 million countersuit in US District Court against Ralston. This action accused the company of "damaging the league by willfully, wantonly and maliciously collapsing its St. Louis Blues hockey operation."
Moreover, Ralston was violating the league's constitution that required "an owner to give two years notice before suspending the operations of a hockey franchise."
The league sought "$3 million in actual damages, plus punitive damages of $75 million or an amount equal to five percent of Ralston's assets ($105 million)." Two weeks later, on June 24, the 18 NHL owners who had abstained or voted against the sale and transfer of the Blues filed a lawsuit against Ralston that was nearly identical to the NHL's suit.
The tit-for-tat offensives between the two parties took on an increasingly nasty and vengeful tone as well. Ralston said that, "the NHL has concocted an absurd series of charges and damage claims. Their lawsuit is utterly ridiculous."
Ralston also mentioned that if the NHL did not accept the company's offer of the Blues by June 14, the company would "dissolve the team and start selling off the players and other assets of the St. Louis Blues."
In addition, they put the Checkerdome up for sale. To compound matters even further, the NHL Players Association said it would take legal action against the league if any player positions were eliminated through a contraction or dispersal draft of the Blues players.
Faced with the ultimatum that one of its franchises would be liquidated, and that it probably faced yet another lawsuit from the players union, the NHL Board of Governors took action on June 13. The NHL rejected Ralston's tender offer and "terminated" the St. Louis Blues franchise, stripping the entity from Ralston for violating provisions of the NHL's constitution. It took control of the Blues assets, including its player contracts, and began the process of trying to find a new owner for the club. NHL President John Ziegler said that, "the NHL would do everything it could to keep the Blues in St. Louis under a new Blues franchise," but the statement was far from a guarantee.
NHL President John Zeigler battled the Ralston Purina ownership group bitterly in an attempt to keep the hockey club in St. Louis.
Although many groups had expressed an interest in the Blues and submitted various plans and proposals since Ralston's announcement back in January, all of these offers were insufficient as the negotiation process evolved, usually due to a lack of cash and assets by the inquiring groups.
One individual in one of these groups was a California-based businessman who had first made a fortune in the vending machine business and later on in real estate. He had grown up in Edmonton, been a minor league hockey referee in the 1940's, and had invested in several minor-league sports clubs and parks as his fortune grew. In 1983, what he really longed for was fulfilling his life-long dream of owning a major-league sports franchise. His name was Harry Ornest.
Ornest first expressed an interest in the Blues as a member of a potential St. Louis-based ownership group back in late-March of 1983. In the subsequent months, Ornest gradually ramped up his efforts, emerging in late June as the main investor in a consortium of local companies and individuals looking to buy the Blues.
In order to win the bid and complete the deal, Ornest's group would have to purchase the franchise and player contracts from the NHL, negotiate an appropriate lease for the Checkerdome with Ralston, and come up with enough money to operate the franchise.
In July, the NHL set a month-end deadline for potential owners of the St. Louis Blues to submit their bids to the league. Chillingly, Ziegler said that if the NHL was unable to find an acceptable buyer for the Blues, the league, "would probably then consider dissolving the team in a special player draft."
Ziegler also said, "it was unlikely that the NHL would operate the Blues franchise itself and practically speaking, I don't think there is sufficient support for it."
Ten days before the NHL's deadline, Ornest's bid was conditionally approved. Six days later, after extended negotiations with Ralston, Ornest reached an agreement to purchase the Checkerdome. The NHL granted Ornest "a new St. Louis Blues franchise, free of any legal incumbrances," on July 27, 1983.
Harry Ornest.
Ornest wound up purchasing the franchise and its player contracts from the NHL for $3 million in cash and $9 million in two notes. He purchased the Checkerdome from Ralston Purina for $5 million. Finally, Ornest raised $3 million in operating expenses for the club by selling debt securities to local companies (Anheuser-Busch, Emerson Electric, Martiz, Inc., Mercantile Bank and Stifel, Nicolas & Co) and individuals.
As it turned out, Ornest's bid was the only formal one that was submitted, so it was probable that the St. Louis Blues would have disappeared after 16 seasons had he not been able to close the deal.
Although the worst was over, and the Blues were assured of staying in St. Louis, Ornest inherited a franchise that needed to be reorganized and reassembled. Wasting little time, Ornest hired Jack Quinn on August 6 as Executive Vice-President and Director of Business Operations. A week after that, he hired Ron Caron as General Manager. Three days later, Jacques Demers was hired away from the Quebec Nordiques organization and named Head Coach of the Blues, with Barclay Plager sliding over to Assistant Coach. Finally, the Blues found a minor league affiliate (the Montana Magic) to share with the Edmonton Oilers.
Miraculously, things were in place when the puck dropped on the Blues 1983-84 season.
By the time the NHL and Ralston's lawsuits made it to US District Court in June 1985, Ralston's $60 million lawsuit had been reduced to $12 million plus punitive damages. The NHL's had shrunk from $78 million to $6 million plus punitive damages. After nine days, the two parties settled out of court. Of course, the attorneys refused to discuss the settlement, saying the terms were confidential.
The agreement did however result in the transfer of the $12 million in funds to Ralston Purina that the NHL had held in an escrow account since Ornest purchased the Blues in July of 1983. Together with the $5 million sale of the Arena, Ralston had recovered $17 million of the $19 million it said it had lost between 1977 and 1983.
One party in this story made out a lot better than Ralston did; Harry Ornest. In October 1986, Ornest sold the Blues to a local group headed by Michael F. Shanahan of Engineered Support Systems, Inc. for $19 million, which included $10 million in cash and the assumption of the $9 million in notes Ornest used to buy the Blues three years earlier.
He sold the Arena to the city of St. Louis' Land Clearance Redevelopment Authority for $15 million. The LCRA gave the Ornest's $5.5 million in cash, a $2.7 million note due in 1993 that paid 9% in yearly interest, and assumed the $6.8 million mortgage on the Arena.
After three years, Ornest left St. Louis to return to California with a $3.4 million profit on the Blues, an $8.2 million profit on the Arena and a total pre-tax profit on both of $11.6 million.
He also left with the unofficial title of the man who saved the St. Louis Blues.