MALMÖ REDHAWKS CLOSE TO BANKRUPTCY
Yesterday, the managing board of Malmö Redhawks announced that the due to the club's serious liquidity problems, the salaries of the players have been frozen and the contracts become void with immediate effect. This also implied that the players are free to find another club before the transfer window closes tomorrow. Right now, the situation of Redhawks is approaching a meltdown. Five players have already found another club (incl. Jonas Höglund and Henrik Karlsson (Södertälje) and Marcus Paulsson (HV71), Robin Weihager (HV71) and another 10 players may leave according to reliable rumors.
That Malmö Redhawks are in financial troubles have been known for quite a long time. The team is running a huge player budget (SEK 30.3 mio.) comparable with the teams in
Elitserien. In
Allsvenskan, only Leksands IF has a comparable budget. But unlike Leksands which currently leads
Allsvenskan, the Redhawks' performance on ice has been utterly disappointing. The team is currently placed well outside top 6 which either qualifies directly or leaves an opportunity to qualify for Kvalspellet for
Elitserien.
The Redhawks' are still to win in their brand new arena, Malmö Arena (one of the biggest and most modern
hockey arenas in Sweden). On the ice, the situation has gotten ever more desperate in the past weeks. Two weeks ago the coaching staff was fired. Meanwhile, the club signed a bunch of new players to turn things around. Fraser Clair, a leading player of Nordsjælland Cobras (DEN) was signed as late as Tuesday, and he never got an opportunity to play.
Right now, the Swedish newspapers are looking to the Malmö Redhawks enormous salary budget and the team's poor performance on the ice as some of the explanations why the Redhawks are in financial troubles. According to Sydsvenska Dagbladet, the Redhawks are currently short of SEK 8 mio. to finish the season. If declared bankrupt, the Redhawks will be relegated to 3 division.
Having looked carefully at the newspaper reports and insider blogs from the past month, it seems, however, that the sources of the problems are to be found elsewhere.
In the past 20 years, Malmö Redhawks have been associated with one person: Percy Nilsson. Throughout the years, Percy Nilsson has pumped a staggering amount of money into the club--more than SEK 100 mio. Via the shareholder company, Parkfast AB, in which he holds a majority, Percy Nilsson has also invested more than SEK500 mio. in the construction of Malmö Arena.
Despite his staggering financial investments in the club, Percy Nilsson has had no firm control with Malmö Redhawks. The club has been managed as an ordinary sports club controlled by the ordinary members. In 1999, however, Percy Nilsson ensured an option to turn Malmö Redhawks into a shareholder company (in return for his financial investments).
In the past year, Percy Nilsson has been very active in the media arguing for a closed Swedish (or Nordic) professional league driven on commercial terms like the
NHL. Making use of his option to turn Malmö Redhawks into a shareholder company would be a stepping stone in this process. Apparently, Percy's idea has been to turn Malmö Redhawks into a daughter company of Parkfast AB.
In doing so, Percy Nilsson has encountered a major legal obstacle: according to the regulations of the Swedish Sport Federation, the private shareholders can max. own 49% of the voting rights in sports club. Percy Nilsson and others have worked to get that rule changed, and a session has been planned in the Swedish Sport Federation, 15-17 May this year to review and possibly revise the rule. If revised, Malmö Redhawks would be turned into a shareholder company shortly after that date.
As late as two weeks ago, after another board meeting, Percy Nilsson confirmed that this was the roadmap.
Only two weeks later, yesterday, Percy Nilsson announced, that he wll not come the Redhawks to the rescue as he has done many times in the past?
Nilsson's announcement may seem irrational since he will lose his huge investments for good if The Redhawks are declared bankrupt. Only a few days ago, Marcus Wennerblom, the leading
hockey journalist of Aftonbladet, argued that it was highly improbable that Percy Nilsson would pull the plug. Today, Skånskan, a local Swedish newspaper, reports that Parkfast AB will lose SEK50 mio. without Malmö Redhawks playing in Malmö Arena.
I cannot provide a firm answer, but having read the various fans blogs plus interviews with Percy Nilsson, it is however clear that his bid for turning Malmö Redhawks into a shareholder company while at the same time getting the 49% rule changed is meeting fierce resistance among the ordinary members of the club as well as certain quarters of the Swedish Sport Federation.
If Percy Nilsson is attempting to exert armtwisting on the fans and the federation, he is making a gamble since Malmö Redhawks may be declared bankrupt in matter of days.
But perhaps Percy Nilsson has already given up the Redhawks? In today's edition of Aftonbladet, Percy Nilsson confirms that he is in dialogue with the
KHL establishing the first Swedish team in the Kontinental League based in Malmö.
Such a move would not be unlogical. By establishing a Swedish
KHL team, Percy Nilsson would no longer be restricted by the 49% rule but be free to form a company with which he would have firm control. Following this line of thought, it would even be rational to kill the Malmö Redhawks as the new
KHL team would have no local rivals in the southern part of Skåne.
What Percy Nilsson is up to remains to be seen.