User:Alaney2k/From Oakland to San Jose: The Gunds and the NHL

Gordon and George Gund were originally part-owners of the Oakland Seals, and eventually became the owners of the San Jose Sharks. But the trail between Oakland and San Jose went through Cleveland, Ohio, where the Seals became the Cleveland Barons, and Minneapolis-St. Paul, Minnesota, where the Barons took over the existing Minnesota North Stars, before the Minnesota North Stars franchise was split and the new San Jose Sharks formed, from half of the North Stars roster, and a special draft. George Gund owned the San Jose Sharks for ten years before selling the team in 2002, retaining a 5% ownership.

The Gunds
The Gund family has roots in the United States dating back to 1848 when the family emigrated from Germany. Johan Gund founded several brewing companies in different locations in the western United States, eventually managing those with his son, George Gund I. The family then set down roots in Cleveland, Ohio where it took over a local brewing company and made a fortune investing in banking, mining, and real estate. George Gund II was born in 1888, and took over his father's businesses after his father died in 1916. While Prohibition forced the brewing business to close, the Gund empire continued to grow with the Sanka decaffeinated coffee brand, real estate and other ventures. The company bought up numerous stocks during the Depression at low prices. Gund II eventually became president of Cleveland Trust and director of over 30 other firms. He started a philanthropic foundation, the George Gund Foundation in 1952, that continues to this day. Gund II had two sons who would become prominent in business, including sports franchises: George III and Gordon. The two would be involved in two professional sports, basketball and ice hockey.

Oakland Seals
George was the first to invest in ice hockey, purchasing a minority interest in the California Golden Seals.

Seals move to Cleveland
After plans for a proposed new arena in San Francisco were cancelled in 1976, the Gunds convinced majority owner Mel Swig to relocate the franchise from Oakland to the Gunds' hometown in June of that year. Renamed the Barons after the popular former American Hockey League team, they played at The Coliseum in Richfield, which had been vacated by the Cleveland Crusaders of the World Hockey Association when they moved to Saint Paul, Minnesota to become the second incarnation of the Minnesota Fighting Saints.

The Barons only drew 10,000 or more fans in seven out of their 40 home games. They were also troubled by an unfavorable lease with the Coliseum. In January 1977, Swig hinted the team might not finish the season because of payroll difficulties. The Barons actually missed payroll twice in a row in February, and only a $1.3 million loan allowed the Barons to finish the season. They finished last in the Adams Division, and Swig sold his interest in the team to the Gunds.

The Gunds poured money into the team, and it seemed to make a difference at first. The Barons stunned the defending Stanley Cup champion Montreal Canadiens on November 23 before a boisterous crowd of 12,859. After a brief slump, general manager Harry Howell pulled off several trades in an attempt to make the team tougher. It initially paid off, and the Barons knocked off three of the NHL's top teams, the Toronto Maple Leafs, New York Islanders and Buffalo Sabres in consecutive games in January 1978. A few weeks later, a record crowd of 13,110 saw the Barons tie the Philadelphia Flyers 2–2. The bottom fell out in February, however, as a 15-game losing skid knocked the Barons out of playoff contention.

Minnesota North Stars takeover
The NHL sought to solve two problem franchises, the Cleveland Barons and the Minnesota North Stars. The solution was for the Barons' organization and players to merge with the North Stars. The Montreal Canadiens' Sam Pollock described the maneuver: "If you put one pile of garbage together with another pile of garbage, all you have is a larger pile of garbage."

Minnesota dispersal and San Jose formation
The Gunds operated the North Stars for over ten years. In the late 1980s, crowds were dwindling at the Met Center Arena and the North Stars lost money. From 1986 until 1990, the North Stars lost a total of $16 million.

The Gunds made it publicly known that they would move the North Stars if two conditions were not met. First, the Gunds applied to the Metropolitan Sports Facilities Commission, the owners of the Arena for $15 million in improvements, which they calculated would reduce the loss to $2.5 million per year. They put a condition of a minimum of 10,000 season ticket sales. On February 21, 1990, the Commission voted 7–0 to reject the request.

The NHL did not want to exit the Minnesota market and convinced the Gunds to sell the North Stars to local ownership, while taking several dozen players of the Stars along with them to San Jose.

George Gund sold most of his share of the San Jose Sharks in 2002 for a sale price between $120 million and $140 million. A group headed by Kevin Compton, a general partner with the venture capital firm Kleiner Perkins Caufield & Byers, and Greg Reyes, chief executive of San Jose-based Brocade Communications purchased the team.