hockey

Murray Edwards: The NHL's deal maker

The Globe and Mail

NHL commissioner Gary Bettman (L) and Murray Edwards, co-owner of the Calgary Flames photographed while walking on Bay in the middle of the negotiations with the NHL aimed to end the lockout, Toronto October 18 2012. (Fernando Morales/The Globe and Mail)

In the late 1990s, when Murray Edwards was a new owner in the NHL and not yet a billionaire, he would meet every Wednesday morning at 7:30 in the office of Calgary Flames president Ron Bremner.

Those were dark years. While Edwards’s main business was flourishing – the oil and natural gas company Canadian Natural Resources Ltd. – the Flames suffered on and off the ice. The team missed the playoffs year after year, attendance plunged, and the absurdly low Canadian dollar compounded the situation – all-in threatening the franchise’s viability in Calgary.

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This is where Murray Edwards learned the business of hockey, when Canada’s national game seemed like no certain thing in Canada as a professional enterprise.

Edwards is well-known for his whipsmart mind – “He’s got the mental engine that makes a Ferrari look like a Go-Kart,” says former Flame Jim Peplinski – and this is what Bremner remembers from those early Wednesday morning sessions with Edwards, one of nine Flames co-owners, working through problems.

“I tell people to this day it was like getting an executive MBA on the side,” Bremner says.

Edwards, 52, is one of the richest men in Canada, having led the ascent of Canadian Natural from penny stock to the biggest oil and gas producer in the country, worth some $33-billion. And he has big stakes in a sprawl of other companies: oil drilling, mining, aerospace, ski resorts, the Flames, and is a force politically behind the scenes, in Ottawa, and in Washington D.C.

He is a consummate deal maker, always bargaining, always with his eyes fixed on the long term.

In the hockey arena, since buying a stake in the Flames in 1994, Edwards has risen to the top echelon of NHL owners. While other names get much more press – Jeremy Jacobs, the league chairman and Boston Bruins owner, and Ed Snider of the Philadelphia Flyers, never mind commissioner Gary Bettman – the Calgary billionaire deal maker is a central player in the current lockout.

In one instance two months ago, as the Sept. 15 lockout deadline set by the owners approached, Edwards joined a select group, Jacobs and Bettman, and the three men hammered out a failed offer.

“He’s become pretty influential,” said one owner. “He’s a pretty tough guy. He’s got a reputation for being a hard-driving deal maker. But he’s balanced. Murray cares deeply. He really favours a fair deal.”

As the lockout continues through November, and a number of owners are locked on a 50-50 deal with the players, the role of Edwards has been little noticed. It is possible he could emerge as a key broker, much like his forebear with the Flames, Harley Hotchkiss.

Hotchkiss, who died last year, was league chairman for a dozen years, 1995 to 2007. Hotchkiss helped end the last lockout, after he forged a bond with Trevor Linden, president of the NHL Players’ Association, which was part of what finally led to a deal.

Edwards came from ordinary beginnings. Born in December, 1959, he was raised in a middle-class home in Regina, three children, his father was an accountant and his mother was a teacher.

In politics, Edwards has long been affiliated with the federal Liberal party. In business, his focus is long-term and on variables one can control, such as costs. Keep them low – important in the volatile oil and gas business. His companies are known for being demanding places to work. And he is not necessarily a friend of workers.

In 2004, when Canadian Natural was undertaking the biggest move of its history, to build the Horizon oil sands mine north of Fort McMurray, the company secured a special status from the province called Division 8 under Alberta’s labour laws. With an eye to keep costs low, Canadian Natural then struck a special blanket deal for all site workers with the Christian Labour Association of Canada, a union that is seen by some other unions as business-friendly. The deal angered the traditional Alberta Building Trades, who tried to fight it in court.

The Division 8 status, interestingly, also assured there would be no work stoppages: no strikes, and no lockouts.

Canadian Natural made use of some foreign workers, also to save money.

There was controversy in April, 2007, when two Chinese workers were killed at the Horizon construction site, and two others seriously hurt. The safety was shoddy. In 2009, the province laid 53 charges – 29 against Canadian Natural, and 24 against Sinopec entities. Fifty charges were later withdrawn or stayed. But on the case’s three primary charges, against Sinopec’s SSEC Canada Ltd., the employer of the workers, the company pleaded guilty in September for failing to ensure the health and safety of workers. SSEC Canada faces fines of up to $1.5-million, which the Alberta crown wants fully levied, and the sentencing hearing is set for Jan. 24.

Still, considering Edwards has made his money in energy, and the controversial oil sands, the media-shy billionaire hasn’t roused much negative attention, or attention at all.

After growing up in Regina, Edwards went to business school at the University of Saskatchewan in Saskatoon, and then law school at the University of Toronto. He became a lawyer in Calgary and quickly turned to deal making. Canadian Natural was started in 1989, when he was 29. He invested $100,000 alongside two partners. He is chairman and his stake – he remains the sixth-largest shareholder in the company – is worth nearly $700-million, which underpins his fortune estimated by Forbes to be $1.6-billion, No. 17 in Canada and No. 804 globally.

“He’s clearly a force,” says Red Wilson, CEO and chairman of Bell Canada in the 1990s. “He’s a force of nature.”

Wilson chuckles. He first met Edwards – a big man, standing 6 feet 2 inches – several years ago when Edwards was on a panel that Wilson chaired, one set up by Prime Minister Stephen Harper to investigate Canadian business competitiveness. The final report, entitled Compete to Win, includes a hockey metaphor Edwards has always liked: “We must skate harder, shoot harder and keep our elbows up in the corners.”

Wilson described Edwards, most of all, as a shareholder. A man with skin in the game. Not just an executive, a big salary, stock options, piling up a plush pension.

Where Edwards operates, his money is on the line.

Edwards is deeply involved in all that he does, as he has become with hockey. He takes big stakes in ventures. Magellan Aerospace is one example, where Edwards now owns three-quarters of the stock. Most of his investments have been winners but Magellan has long struggled. “I’ve been called Mr. Patient Money because I have the patience to work through challenging circumstances,” Edwards told The Globe and Mail four years ago as Magellan fought through fiscal turbulence.

Edwards’s style is to analyze deeply, and then try to move quickly. The best-known deal on this front in Calgary happened in 1999, when Canadian Natural and Penn West, another Edwards company, bought $1.6-billion of assets from BP, a deal launched during Stampede. The assets included the raw land north of Fort McMurray that became the $11-billion Horizon mine.

What is interesting is an Edwards comment about bargaining with BP, one of the biggest oil companies on the planet. He proposed the initial deal on the first day of Stampede, when most of corporate Calgary was drinking. Over a month or so, the sides worked toward a deal they both liked. “It’s more important,” said Edwards at the time, “to fly midpoint in deals and work together, than to try to haggle for the last dollar.”

Hal Kvisle – today CEO of Talisman Energy – remembers the first time he worked with Edwards. It was 1993, and Kvisle at the time also ran a small oil company. Both he and Edwards were sniffing around a deal, and they then worked together on it, and split the proceeds.

The basic framework was agreed over a handshake.

Edwards’s stock, in business and hockey, has climbed in step with the rise of Canadian Natural and Edwards as a political player. He is fixed in the inner circle of NHL power players in this lockout and among Canadian owners, his stature today is unrivalled. He is the longest-standing owner, and most are fresh to the club, like Daryl Katz in Edmonton in 2008, and the new corporate owners of the Toronto Maple Leafs, Bell and Rogers.

“In any tent,” Kvisle said. “Murray very quickly emerges as the leader.”

 

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