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SBD/Issue 56/FranchisesPrint All
D'Backs Managing General Partner Jerry Colangelo "made his first pitch" last Friday to his partners "during a closed-door meeting" at Bank One Ballpark to "secure a needed" $160M infusion into the D'Backs, according to Harris & Gilbertson of the ARIZONA REPUBLIC, who wrote, "Now comes the hard part: convincing the other owners that, although the new money will dilute their initial investments, the ballclub will be competitive and valuable." Colangelo said that the owners "could take a month to weigh the decision." Colangelo: "I made a presentation to my partners. This enhances the value of the franchise and allows the franchise to go forward." Colangelo added that one proposal "would require unanimous approval, while another would require a simple majority." Harris & Gilbertson noted that the team's 23 investor groups have put $198M into the team (ARIZONA REPUBLIC, 12/1). In a separate piece, Gilbertson & Harris wrote that D'Backs partners Dale Jensen and Mel Shultz were "identified [last] week as key investors and organizers" of a $160M infusion. Jensen has a "high profile, especially in Nebraska, where he made his fortune. ... Ask people what they know about Shultz, and most will say he's Colangelo's longtime business partner or veteran utility lobbyist Marty Shultz's brother." Gilbertson & Harris also wrote that Shultz is "being thrust into the limelight as the lead money-raiser" for the D'Backs (ARIZONA REPUBLIC, 12/1).
Falcons President Taylor Smith denied an FSN report stating that The Home Depot Founder Arthur Blank "had offered, or was willing to offer" $500M to purchase the Falcons, according to Winkeljohn & Saporta of the ATLANTA CONSTITUTION. Smith "did not deny that an offer had been made," but said that his family "isn't interested" in selling the team. Smith said, "If this team was for sale, if anyone was motivated to sell this team, I would know it. There's nothing new." Smith and his four siblings own 88% of the franchise. Winkeljohn & Saporta note that the Falcons "can't be sold until the estate of Rankin Smith Sr. is probated." However, Smith said that he is "not interested in giving up his controlling interest." Minority Owners John Imlay and Tom Watson Brown each own 6% of the Falcons, and "hold right of first refusal on any offer the Smiths consider" (ATLANTA CONSTITUTION, 12/3).
NOT QUITE: Yesterday's Rams-Falcons game drew 59,318 fans to the 71,228-seat GA Dome (ATL. CONSTITUTION, 12/3).
NBA: In Miami, Barry Jackson reported Friday's Wizards-Heat game drew a crowd of 20,118, the largest regular-season crowd since AmericanAirlines Arena opened in January '00 (MIAMI HERALD, 12/1). Meanwhile, in San Antonio, Johnny Ludden reports the Spurs have sold close to 34,000 tickets for tomorrow's game against the Wizards. However, Wizards G Michael Jordan "may not be able to play" due to a knee injury (SAN ANTONIO EXPRESS-NEWS, 12/3)....ESPN's Michael Wilbon, on Charles Barkley talking about a comeback to the Wizards: "There's not the same pressure on Charles Barkley playing that there is on Michael Jordan. They're living up to different standards. Charles is an entertainer which is different living up to being an icon." ESPN's Tony Kornheiser: "This guy says he's riding to the cavalry to help Jordan. He can't even fit on a horse" ("PTI," ESPN, 11/30). ...Before last Friday, the Grizzlies averaged 13,752 fans through seven games at The Pyramid. Through seven games last season at GM Place, the Grizzlies averaged 13,605 fans (Memphis COMMERCIAL APPEAL, 12/1).
NFL: ESPN.com's Len Pasquarelli reported that the five-year contract Chargers coach Mike Riley signed in '99 includes a "substantial loan made to him by the franchise." The loan, believed to be worth $500,000-750,000, "would have come due immediately had Riley departed the Chargers before the end of the season to accept" the head coaching position at San Diego State Univ. Pasquarelli noted that Riley has two seasons, worth about $1.5M, remaining on his contract. Sources said that he would have "forfeited that remaining salary and also been liable for the loan" (ESPN.com, 12/2). ...FSN's Chris Myers reported Bill Parcells "is letting it be known around the league that he is ready to coach again next season for the highest bidder." Parcells "has already put together an entire coaching staff" and is looking for "at least seven million a year" to return to the sidelines ("NFL This Morning," FSN, 12/2).
Giants Exec VP & COO Larry Baer said that the Giants were one of five MLB teams that turned a profit in '01, but they "expect to lose money in 2002 because of increased payroll costs and the softening economy," according to Henry Schulman of the S.F. CHRONICLE. Baer said the Giants will earn a profit of "slightly more than" $1M, less than the $5M they earned last year. But Baer said that in '02, the Giants "expect to lose more than" $5M. Baer: "Player payroll has gone up, sponsorship money is down and the amount we get from the national TV contract is going to be lower. We do not expect the Giants to be profitable next year." Schulman reports the Giants earned $155M in '01, down from the $160M earned last year (S.F. CHRONICLE, 12/3).
METS OWNERSHIP: In N.Y., T.J. Quinn cited sources as saying that Mets co-Owners Fred Wilpon and Nelson Doubleday "may soon break off negotiations and bring an appraiser in to determine the value of the club for them." Doubleday reportedly wants Wilpon to "pay the $200 million they discussed" before the September 11 terrorist attacks, when they "still believed a new stadium was in the works" (N.Y. DAILY NEWS, 12/1). Meanwhile, Wilpon said that the Mets who "fell almost 350,000 fans short of their goal of three million" last season "lost money, though he would not specify how much" (N.Y. TIMES, 12/1). Wilpon said the Mets will "not substantially raise ticket prices" until the team improves. Wilpon: "I just think they have to play better before we raise them" (Newark STAR-LEDGER, 12/1).
Some KY legislators "have thrown up a roadblock" to building a $250M arena in downtown Louisville to attract the Hornets, saying legislators "won't approve a new ticket tax needed to help pay" for the project, according to Chris Poynter of the Louisville COURIER-JOURNAL. Key House Appropriations and Revenue Committee members said that the 5% surcharge on tickets for arena sporting events "has almost no chance of getting through" the General Assembly when it begins meeting in January. KY Rep. (D-Louisville) and Chair of Jefferson County's legislative delegation Mary Lou Marzian, said, "Very few people are going to vote for a tax, no matter if it's a fee, license or surcharge. To vote for a tax for an NBA arena when we can't fund mental health and mental retardation would be really hypocritical." Poynter noted DC-based Goal Group projected the ticket surcharge for NBA and WNBA games would bring in $1.8M in the arena's first year, and noted that the surcharge "would increase to more than $6[M] when the arena debt is paid off" in 2034. Meanwhile, Hornets co-Owner Ray Wooldridge said Saturday that he "didn't want to manage the building," which the city's plan had called for the Hornets to do. Wooldridge: "We're not in the position of running arenas" (Louisville COURIER-JOURNAL, 12/2). In a separate piece, Poynter noted the hearing lasted 90 minutes and was attended by 120 residents and all 12 aldermen. Wooldridge told the crowd, "We'd love to be here, love to work with you." Louisville Chamber of Commerce Chair Ed Glasscock told the crowd that the NBA "would improve Louisville's image and make people 'understand what we're all about other than the Kentucky Derby'" (Louisville COURIER-JOURNAL, 12/2).
KFC'S IMPACT: Tricon Global Restaurants Senior VP Jonathan Blum said that his company's reported $100M sponsorship and naming-rights offer is "about both civic image and commerce." Blum: "I have to be honest we're in it to sell some chicken. We want to see the Kentucky Colonels come here and play in the KFC Center. ... But this is also an enhancement to the quality of life here. Right now, when you go downtown after [5:00pm], the sidewalks roll up" (Tim Whitmire, CHARLOTTE OBSERVER, 12/2).
ST. LOUIS' CHANCES: In St. Louis, Christopher Carey cited sports economists and consultants as saying that though Blues/Savvis Center Owner Bill Laurie "covets an NBA franchise, bringing the Hornets to Savvis Center would make sense only if the team and its revenue stream become part of the overall business." Carey: "For that to happen, Laurie has to align his interests with those of the Hornets owners. But no matter how it is done, the best economic plan is to have one entity running the Blues, an NBA team and the management contract to Savvis Center" (POST-DISPATCH, 12/2).
Red Sox bidder Miles Prentice indicated that he "expected" Quadrangle Group to become an investor in his group, according to Meg Vaillancourt of the BOSTON GLOBE, who cited a source as saying that the pairing "was likely." Vaillancourt: "The addition of Quadrangle would be a major boon to Prentice, whose interest in the Red Sox has been viewed with skepticism by rival bidders who questioned whether he had the funds to make a credible bid." Quadrangle's investors include former Lazard Freres & Co. partner Steve Rattner, USA Networks Chair & CEO Barry Diller, Comcast President Brian Roberts, Netscape co-Founder Marc Andreessen, former McCaw Cellular Communications Chair Craig McCaw and RealNetworks CEO Rob Glaser (BOSTON GLOBE, 12/1). In Boston, Scott Van Voorhis cited sources as saying that one Red Sox bidder "may have laid down an offer of more than" $400M, and speculation about the highest bidder focused on Cablevision Chair Charles Dolan. However, sources believe that Prentice "might also be a potential candidate for such a go-for-broke bid." But sources added that Prentice would "have a difficult time winning approval" from other MLB owners (BOSTON HERALD, 12/1). In N.Y., Mitch Lawrence reported former MSG CEO Dave Checketts "has surfaced as a major player" in a group trying to buy the Red Sox, and noted Checketts is part of the Joseph O'Donnell-Steve Karp bid group. Checketts said, "It'll be a great opportunity if it happens. We might find out by the middle of next week if we're going to get it. ... Originally, the (O'Donnell group) approached me and asked me to look at the finances, the whole operation and the question of a new ballpark for the Red Sox. I did that and when I told them what I thought, they said, 'How would you like to put some of your money in and come in with us?' I figured this is a tremendous opportunity." If the O'Donnell-Karp bid group is selected, Checketts would become the club's CEO. Meanwhile, Lawrence added Checketts' group could outbid Charles Dolan's group. Checketts: "When I told Mr. Dolan that I was part of the group, he was stunned" (N.Y. DAILY NEWS, 12/1).
HOW NESN FACTORS IN: In Boston, Jim Baker wrote that New England Sports Network (NESN), 80% of which is expected to be included in the Red Sox sale, "is definitely a jewel and its prize status is no longer hidden, but its value is still being underestimated as many haven't grasped why its potential is soaring." Baker noted published reports put NESN's '01 revenues at $3M and projected them to reach $40M in four years. Baker: "But present and former NESN officials tell the Herald revenues will rise much faster and to much higher levels." One former NESN official said, "NESN will become a $100 million operation and sooner than you think." Baker noted the Red Sox-Bruins' ownership structure in NESN "is 80-20, boosting Sox power in NESN" (BOSTON HERALD, 12/2). Meanwhile, the N.Y. DAILY NEWS' Lawrence wrote it "wouldn't surprise anyone if Checketts' group ... also makes a run at the Celtics, if the Sox' bid is accepted." Lawrence: "With the [NESN] being part of the Red Sox sale, we could see the ex-Garden boss looking to start an MSG-like empire in Boston" (N.Y. DAILY NEWS, 12/2).
WHO'S IN FIRST? In Boston, Steve Marantz reports MLB Commissioner Bud Selig "favors the [Red Sox] being sold to the group of Tom Werner, Les Otten, George Mitchell and Larry Lucchino with the possible and pivotal addition of ... John Henry because it is expected to support him in collective bargaining this winter." MLBPA sources say that the fate of the Werner-Otten group "may be intricately tied to Selig's labor strategy." Another MLBPA source adds that without Henry, the Werner-Otten group "may be significantly outbid" (BOSTON HERALD, 12/3). In Boston, Will McDonough, on the Red Sox' desire to sell to the highest bidder: "Why can't it be that the team will be sold to the group that combines the best of these two money and love of the Red Sox?" If Red Sox CEO John Harrington did this, he would "choose the [O'Donnell-Karp] group, because their local roots and financial stability combine the best of what that tradition wanted to champion" (BOSTON GLOBE, 12/2).
DON'T FORGET THE PARTNERS: The BOSTON GLOBE's Vaillancourt noted Harrington "must consult with six people destined to help pick" the winning bidder. Vaillancourt: "They are the team's other limited partners. And after years of having little say in how the team is run, they are crucial to deciding who will occupy the owner's box at Fenway Park next year." John Hancock President & CEO David D'Alessandro said, "The limited partners are sitting in the catbird seat now." Meanwhile, two other partners said that they will "consider selling their stakes if someone offers the right price." Another said that he hoped to "obtain a change in the ownership structure that would give the limiteds more financial security" (BOSTON GLOBE, 12/2).
The NLL NJ Storm made its debut last Friday against the NY Saints before an announced crowd of 7,634 fans at Continental Airlines Arena, according to Brad Parks of the Newark STAR-LEDGER, who placed the attendance at about 2,500 despite reports that 15,000 tickets had been sold or given away. NLL Storm Owner Jayson Williams, who invested about $1.5M in the franchise, said, "We're just getting started, I'm pleased with the crowd." Parks wrote that the Storm featured a "light show, fireworks spurting in the sky, ... a mascot with a lacrosse stick that shoots fire, and special appearances by" NFL Giants CB Jason Sehorn and free agent P David Wells. Williams: "I don't want anyone to be bored. I want them to go to a party and have a lacrosse game break out" (Newark STAR-LEDGER, 12/1). Williams said that the Storm will use promotions "galore to attract those who normally would not have much interest in the sport." The first 5,000 fans at Friday's game received a T-shirt. Other promos include a Williams bobblehead doll night on December 8, as well as a diamond giveaway on February 8 in which the first 1,001 women will receive a stone, with "only one of them being a real diamond" (Bergen RECORD, 11/30).
A PIECE OF THE ROCK: Saturday's Toronto Rock-Vancouver Ravens game, the Ravens' inaugural game at GM Place, drew an announced crowd of 13,772, an NLL record for an expansion team on opening night (CP, 12/2). However, in Toronto, Grant Kerr writes that the crowd "appeared considerably smaller" (Toronto GLOBE & MAIL, 12/3).