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STARS' TROUBLED FINANCES HINDERING NEW INVESTMENT
Published October 24, 1995
The sale of a half-interest in the Stars "still isn't completed, but owner Norman Green on Monday brushed aside speculation that the delays stem from financial difficulties," according to today's DALLAS MORNING NEWS. Green, who admits the Stars have major debts and went into a "cash crunch" during the '94 lockout, has been negotiating with John Spano, President of a local leasing company, on a $40M deal for 50% of the team. Sources familiar with the team's financial situation says the Stars' debt is at nearly $60M, raising "doubts about whether the franchise can produce enough cash to keep up with that much debt." The MORNING NEWS' Richard Alm notes questions on the team's financial situation come at an "inopportune time." For Green, selling half the team "might not provide the Stars with enough financial relief, forcing Green to sell a majority interest." In addition, any complications to the sale hold up consideration of a new arena for the Stars and Mavericks. One source notes the team's market value currently exceeds its debts by only about $20M, and that value is unlikely to grow unless a favorable arena deal is worked out. Green's primary financial burden is $42M owed to Alberta Treasury Branches, a province- owned bank, over failed Canadian real estate interests. With the Stars as collateral, one Alberta politician said over the weekend the province could end up owning the Stars if Green's deal with Spano falls through (DALLAS MORNING NEWS, 10/24).