Kevin O'Leary Talks Hockey

Well, I want to get your thoughts on this breaking news: Brian Burke is no longer the president and general manager of the Toronto Maple Leafs. For full disclosure, I know the man; I respect him a lot. I like his discipline, his focus, and that's probably what got him in trouble. He should be an owner himself; that's what I look at it. But he certainly acted that way, and that's good in some ways in running a team.

But here's the issue I would have if I owned equity in the Leafs. Here's a team that represents about 75% of the EBITDA, the free cash flow, of the entire league of the NHL, and they don't even have to win a game. So, here's your quandary: if you're forgetting about the sports and the pride of winning, why pay for expensive players at all? You could put on the worst performance; they make the most cash flow, and they are the worst performers. That's the way you look at it.

That's a real interesting quandary because in some ways, you could just put baby seals out there on the ice with hockey sticks and make a fortune. You don't have to pay baby seals anything! So I think there's going to be a new way to run a team like this because you're missing the cash flow you're missing. Believe me, in life, it all boils down to cash, and by the way, that strike was all about cash. So don't let anybody tell you this isn't about money—because that's what it is.

Here's what the Leafs are missing: they never make it to the playoffs. There are all those tickets they never sell in the playoff series. These guys are losers. So maybe the management and the ownership should be looking at extending; in other words, maybe win a couple of games along the way. Maybe win some in the later part of the season when you can. They'd make even more money because the fans are willing to come and sell it out every game.

That probably has a little bit to do with what happened here: a disagreement on what the direction is to win a couple of games. They know how to lose—they're really good at that. Now they have to learn how to win. But they don't even have to win; they're already making as much money. You'd think they'd make more money if they did win. You can sell it every game; they always get kicked out early.

This year, of course, they're doing great; they're starting right at the top in the middle of the season, so we're practically right into the playoffs. The Leafs have to figure out a way—if you're the owners—how do we stay in the game longer so we can make more money? I love when people say, "No, it's the pride of winning!" No, it's the love of the game; that's all crap. This is about cash flow, and they've got to figure out a way to stay in it longer to make more money. It's that simple.

It's also a bit about loyalty: Leafs fans stay loyal to their team even though they're not winning. I mean, they may actually love the pain of watching them lose. What's your experience? You're a Habs fan? No? You know I'm just telling you the way it is because I go to Leafs games. How are they gonna lose this time is the question; that's what I'm asking myself as I'm getting my next hot dog.

You're a Burke's hot dog? Yeah, well basically. But look, believe me, at the end of the day, in all seriousness, it's always about money all the time. If they can figure out a way to win and even stay in another twenty percent longer, it's a ton more money for the owners who've just paid up for this little beast. This is an expensive team, but it makes seven—there's no other scenario anywhere else in professional sports where you find a situation where 75% of cash flows on one team.

Well, the picture that you paint, though, makes it unfortunate for anyone to take that position as president and GM. A team that doesn't want to try to win—in defense of this position—it's always gonna be the most volatile in professional sports. When you're a GM of a team, you're gonna get whacked every 36 months. Don't worry; he's gonna land somewhere just fine; he's a very good GM. Maybe as an owner, as you're suggesting.

Maybe if you were to write another version of "Cold Hard Truth"—I know this is your second one, right? If you were to write a third one for the NHL: hockey teams, owners, players, millionaires, billionaires—what advice would you give 'em?

I'd give them advice to focus on the bottom line. They've really done a great job in trying to fix the model. The players are making way too much money, and now, because they're a commodity—you know that the truth is people don’t talk about it—but here's a fact about hockey: the average journeyman only lasts about 98 games across 36 months, and then there's a whole new crop of young guys coming up. Why pay them so much? Why? Well, I don't understand where it is written that they should make half the profits.

I would treat them like they are commodities. Nice guys; I'm not trying to say anything about these players; they're wonderful people and all that. But they're commodities. The owners have something unique and proprietary—they own the team. That's an oligopoly. You pay less for a commodity; it's that simple.