SBD/Issue 172/Franchises

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  • Hong Kong Consortium Denies Involvement In Cavs Investment

    NWD Says They Have No Involvement With
    Group Of  Investors Buying Share Of Cavs
    Hong Kong-based New World Development Co. (NWD) has denied "any involvement in the purchase of a stake" in Cavaliers Operating Co., the holding company of the NBA franchise and Quicken Loans Arena, according to Jonathan Cheng of the WALL STREET JOURNAL. NWD Dir of Corporate Affairs Kwan Chuk-fai in a statement said that the company "has no involvement in the deal involving a group of Chinese investors" buying a share of the Cavaliers. Kwan: "None whatsoever. We didn't even consider such a deal" (WSJ.com, 5/26). In Cleveland, Brian Windhorst cited NBA sources as saying that the Cavaliers sold an ownership stake to NWD, which will assume the "second-largest percentage of team ownership" behind Cavaliers Owner Dan Gilbert. Gilbert will remain majority owner and "retain the final say on all matters with the franchise." NWD has over $21B in "assets in hotels, convention properties, department stores, telecommunications, infrastructure projects and even financial services mostly in Southeast Asia." The company owns a string of Marriott-brand hotels in Hong Kong, Beijing and Manila, "along with other brands that would be familiar to Americans, including a Hyatt." Windhorst noted NWD is a "financial powerhouse with numerous ways to take advantage of its pending investment in the NBA," and alongside Gilbert, the Cavaliers now "potentially will have some of the deepest backing of all the teams in the NBA." Gilbert "received interest from New World months ago when he made it known" that Cavaliers investor David Katzman "wanted to sell his share." The deal reportedly was brokered by Chinese businessman Kenny Huang, "who has been working with the Cavs on Chinese sponsorships for the last two years." Huang reportedly "will be the group's representative with the Cavs and perhaps even be given a title within the team for next season." Cavaliers sources indicated that the "only reason the club looked for new owners was because Katzman wanted to liquidate his shares" (Cleveland PLAIN DEALER, 5/25). The AP reported the deal could see NWD acquire up to a 15% stake in the Cavaliers and Quicken Loans Arena, but Gilbert's role in overseeing the franchise and the facility "will not be affected by the new partners" (AP, 5/24).

    BEEFING UP THE ROSTER: The PLAIN DEALER's Windhorst noted Huang and "several of his partners were in Cleveland and attended" Eastern Conference Finals Games One and Two last week against the Magic. The "direct impact of the move is securing the future of the franchise, which has been in a minority ownership flux for the last couple years as it loses millions in attempting to build a championship-quality team." The deal "will not only mean an injection of capital but will open the Cavs to business in China." Windhorst noted the move, which has been "kept mostly secret in America, is being supported by the NBA as they have encouraged development in China." Meanwhile, another effect of the deal is "how vital this new link" could be for Cavaliers F LeBron James, "providing a huge tie-in with an economy James is eager to tap." If NBA owners approve the deal, it "could help to remarkably strengthen James' relationship with the Chinese fans and consumers that he's been working to reach for the last four years." James and Nike, "by far his largest sponsor, have been on a mission to create a bond with the Chinese over the last three years," and becoming the Michael Jordan of China "from a marketing standpoint would allow James to reach his goal of someday becoming the first billionaire athlete" (Cleveland PLAIN DEALER, 5/24).

    A WELCOME INVESTMENT: In N.Y., Barboza & Schmidt wrote the deal "signals the first significant investment in a major American sports franchise by investors from China." The sale "may be the most ambitious move yet in an American sports landscape full of leagues, teams and players striving for a foothold in the expansive and largely untapped Chinese marketplace." Barboza & Schmidt noted the move will be "interpreted as an effort by the Cavaliers to entice James, who will become a free agent after next season, to stay in Cleveland and capitalize on the franchise's connections in China" (N.Y. TIMES, 5/26). In Akron, Pat McManamon wrote about 10 years ago, "we all got mad when Japanese interests bought U.S. properties, like Rockefeller Center." However, now we will "probably all be happy if Huang [injects] Chinese money into the Cavs" because it "might help the Cavs keep LeBron." Meanwhile, McManamon noted the revelation that the Cavaliers have "lost millions in the past couple years" is "pretty stunning -- especially looking at the Q every night, with all the sellouts and all the advertising and all the sponsorship" (OHIO.com, 5/24).

    Dominating Chinese Market
    A Top Priority For James
    FORECASTING THE IMPACT: FANHOUSE.com's Matt Watson wrote it is "abundantly clear that dominating the Chinese market is a top priority for James and his sponsors, and despite their best efforts, he has a long way to go before accomplishing that goal, especially in regards to making up ground" on Lakers G Kobe Bryant. Watson: "But playing for a team with Chinese ownership? Well, that would make the Cavs the de facto 'hometown team' for the world's largest continent. As much scratch as Gilbert stands to gain, even more could be at stake in terms of future endorsements for James. ... This deal, assuming it goes down, could be a game changer" (FANHOUSE.com, 5/24). But CNBC.com's Darren Rovell wrote it is "total bunk" that the deal will lead to "greater popularity in China" for the Cavaliers. More Chinese people will "like the Cavaliers if there is a Chinese player playing for them than if one of their brethren owns a minority piece of the team." Rovell: "Do the Japanese want to watch the Seattle Mariners because it's owned by Nintendo? No. They want to watch because of Ichiro" (CNBC.com, 5/26). In Portland, John Canzano wrote, "I'm not sold that the best reason for James to leave Cleveland was marketing opportunities, or fresh cash flow." If the Cavaliers cannot win the NBA Championship before James becomes a free agent, "LeBron might find new reasons to be interested in free agency" (OREGONLIVE.com, 5/24).

    HOW IT AFFECTS THE NBA: In N.Y., Mitch Lawrence noted although the NBA is "eager to grow its brand in China and has been quietly looking for foreign investors to buy into franchises, it is not known if the league would view the proposed deal and the marketing ramifications as a form of cap circumvention that would give the Cavs an unfair advantage" over other teams (N.Y. DAILY NEWS, 5/25).

    SOMETHING TO GET USED TO? Former Portfolio Magazine Wall Street Editor Jesse Eisinger said it is "good" for both the NBA and the U.S. "that the Chinese are buying into assets." Eisinger: "This is our greatest American export, sports and culture, and I don't think there's going to be any controversy." CNBC's Dennis Kneale: "China is going to be investing more, and the more they invest in the U.S., the better it is. It just aligns their interest more with ours" ("CNBC Reports," CNBC, 5/26).

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  • Michael Jordan To Consider Buying Bobcats Controlling Interest

    No Names Beyond Jordan Have
    Emerged As Potential Buyers
    Bobcats Managing Member of Basketball Operations Michael Jordan will "take a serious look at buying controlling interest" in the Bobcats from Owner Bob Johnson, according to sources cited by Rick Bonnell of the CHARLOTTE OBSERVER. Though Jordan has not commented since reports emerged last week that Johnson has stepped up his efforts to sell the Bobcats, sources said that Jordan has the "interest and the financial backing to pursue the team." But the question for Jordan, or any other buyer, is "what Johnson will peg as the team's value." A source said that there is interest, "mostly from out-of-town suitors, in buying the franchise," and added that those suitors "aren't interested in moving the team and are sensitive to the reputation Johnson acquired as an absentee owner in Charlotte." But Bonnell noted no names beyond Jordan's "have emerged, as far as potential buyers, and there's little doubt Johnson would be receptive to selling to his good friend" (CHARLOTTE OBSERVER, 5/23).

    SHOULD JORDAN RULE? In Charlotte, Tom Sorensen writes nothing Jordan has accomplished "indicates he is capable of running a major-league franchise." Sorensen: "The Bobcats (the organization, not the team) have been so abysmal for so many years that they need to start over. ... I hope Michael and his supposed super secret investment partners are not sitting in the shadows, waiting to see how low [Johnson] will go before they pounce" (CHARLOTTE OBSERVER, 5/27). But the OBSERVER's Scott Fowler writes Jordan is the “logical choice -- the insider with star power who also happens to be the best basketball player ever.” Fowler: “Jordan could be an excellent owner if he makes a few changes to the way he does business. I certainly prefer him to an outsider with a big wallet and no deep ties to Charlotte.” What Jordan “needs to do is buy a controlling interest in the team” from Johnson, then he “needs to learn from” Panthers Owner Jerry Richardson (CHARLOTTE OBSERVER, 5/27).

    GOOD NEWS FOR FANS: ESPN.com's John Hollinger wrote the Bobcats being on sale "has to be good news for their fans." The odds of the team relocating are "minuscule, as Charlotte has a new arena and a solid market, not to mention the fairly harsh penalties for departing," and whoever takes over is "almost certain to operate the team more competently" than Johnson. The new owner also presumably will not let Jordan "run the team from the 12th green or shut out the local TV audience, and he might even be encouraged to spend some money on players" (ESPN.com, 5/23).

    TERMS OF A DEAL: The OBSERVER's Bonnell noted Johnson reportedly is "clinging to the idea he can recoup his initial investment -- about $330[M] -- as the current value of this team." But for reasons "both macro (go try to get a $300 million business loan in this economy) and micro (plenty of empty seats at most Bobcats home games), selling this team for a price Johnson would accept will be challenging." A source said that he would be "surprised if Johnson owned this team by the start of next season." But the source added that the price is "what could keep a sale from happening" (CHARLOTTEOBSERVER.com, 5/22). Meanwhile, Charlotte attorney Mac McCarley said new Bobcats owners "would be subject to all the same restrictions and guarantees" if the team is sold. McCarley, when asked if the team could leave Charlotte, said, "No. The city may seek an injunction to force the team to honor the commitment to play here, or can enforce liquidated damages of $200[M] in the first five years (2005-2010), $150[M] in years five to 10, and a declining balance going from $85[M] in year 11 down to $7[M] in year 25." McCarley noted the liquidated damage provisions are "guaranteed by the team and by Bob Johnson personally" (CHARLOTTE OBSERVER, 5/24).

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  • Balsillie, NHL Lay Out Their Proposed Timetables For Coyotes Sale

    Balsillie Says Important To
    Have Resolution Before Draft
    A new conflict emerged yesterday in the ongoing Coyotes saga, as Coyotes Owner Jerry Moyes and RIM co-CEO Jim Balsillie pushed for the team to be sold by June 24, while the league favors a later sale date of August 24. The dates were disclosed in court filings by both parties. The Moyes-Balsillie proposal sees the NHL's BOG voting on Balsillie's bid and relocation application by June 12 and competing bidders' applications by June 23. An auction would then take place June 24, two days after the court determines if the team can be relocated. In a hearing last week, Judge Redfield Baum expressed concern that selling the team before the end of June may be too fast to deal with the complexities of the case. But Balsillie has said publicly that it's important to have ownership resolved prior to the NHL Draft on June 29. Conversely, the NHL favors waiting until after the court rules on June 22 if the team can be relocated before proceeding with a sales process. Over the ensuing month, it would collect applications from potential bidders and process them in time for a potential auction of the team August 24. The two sides also disagreed over how the auction process would work with the Balsillie-Moyes team favoring bids increasing at $5M increments, while the NHL is pushing for $2M increments. The auction process and timelines the parties submitted will be argued in Phoenix court today (Tripp Mickle, SportsBusiness Journal). 

    MOYES-BALSILLIE SALES PROPOSAL TIMELINE
    5/28
    Deadline for notice
    6/1
    Deadline for Balsillie and Moyes to file a joint relocation application to NHL
    6/12
    Deadline for any competing bids to be filed
    6/12
    Deadline for NHL to advise court of BOG's position on relocation and Balsillie's application for membership
    6/17
    Deadline for filings ahead of June 22 hearing on relocation
    6/22
    Hearing on relocation
    6/23
    Deadline for NHL to provide BOG's vote on competing bidders' applications for membership
    6/24
    Auction in bankruptcy court
    NHL SALES PROPOSAL TIMELINE
    6/22
    Decision on relocation
    7/7
    NHL application due for bidders interested in buying team
    7/28
    Preliminary bid deadline in which bidders propose purchase
    8/11
    Qualified bid deadline in which bidders turn in purchase agreements
    8/25
    NHL BOG votes on approval of bidders
    8/27
    Auction in bankruptcy court
    8/29
    Sales hearing

    TAKE IT OR LEAVE IT? In Hamilton, Milton & Peters report Moyes' timeline presented to the court "suggests that Balsillie will withdraw his $212.5[M] conditional offer for the club by the end of June rather than absorb an estimated $30[M] loss by the Phoenix club for the 2009-10 season." Moyes' filing states, "An expedited sale is necessary to maximize the value of Coyotes Hockey assets" (HAMILTON SPECTATOR, 5/27). However, NHL Deputy Commissioner Bill Daly in an e-mail said the league will “continue to oppose any sales process that contemplates a relocation for the 2009-10 season” (ARIZONA REPUBLIC, 5/27).

     
    OPERATING PROCEDURE: The GLOBE & MAIL's David Shoalts reported the NHL and Coyotes will tell a bankruptcy judge today “they have essentially agreed on how to operate the team.” The NHL “will continue to lend the Coyotes money to keep them operating.” Daly in an e-mail said that an agreement is “basically in place on operating the team” (GLOBE & MAIL, 5/26). Daly added, “The control issue is not resolved. But the parties are trying to agree on a process to jointly operate the club pending the sale” (TORONTO STAR, 5/26). The NATIONAL POST’s Tedesco & O’Connor noted the tentative agreement between the Coyotes and the NHL “does not resolve any of the major issues -- who controls the Coyotes; did Moyes have the power to petition the money-bleeding club into bankruptcy; will the club be sold, and to whom; and can and will the franchise be moved out of Phoenix?” (NATIONAL POST, 5/26).

    RUSH UP ICE: In Toronto, Kevin McGran reported Balsillie “has officially applied to the NHL to become a team owner.” A second application -- from Moyes -- to “move the team to Hamilton is expected to be filed” this week. If Balsillie “fails to gain approval, his camp believes it would have the basis for an antitrust suit” (TORONTO STAR, 5/25). In Hamilton, Steve Milton reported in a front-page piece Balsillie is “willing, if the [NHL] so desires, to forgo dipping into the league’s revenue-sharing pool.” Balsillie’s team is “ready to make that concession because they are confident the Hamilton market will offer enough support from an eager fan base to make it a profitable venture.” Balsillie spokesperson Bill Walker: “We anticipate operating profitably in Hamilton by bringing NHL hockey to the best unserved market in the world and therefore not drawing on revenue sharing under the CBA” (HAMILTON SPECTATOR, 5/25). In Toronto, Steve Simmons writes Balsillie “seems confident the judge will rule on relocation and is surprisingly optimistic that he will emerge successful this time, even if there is no indication he will be so rewarded in court.” Balsillie: “Our bid should stand on its own merits. … The judge said there will be an auction and he will rule on relocation. What more could we ask for?” Balsillie added that if he is “given the green light to purchase and move the franchise that it wouldn’t necessarily be called ‘Hamilton.’” Balsillie said he chose Hamilton to relocate to because “there is an arena there.” Balsillie: “That’s really important, even though we’d have to renovate it. If you can point to another arena that’s available (in Southern Ontario), I’m all ears” (TORONTO SUN, 5/27).

    CREDIT CHECK: The TORONTO STAR’s McGran reported SOF Investments, the Coyotes’ “single-largest secured creditor,” has given its “qualified support” to Balsillie’s bid. SOF in court papers said it believes Balsillie’s bid “would result in substantial recovery of the amounts owed to the debtors’ creditors” (TORONTO STAR, 5/23). The PHOENIX BUSINESS JOURNAL’s Sunnucks & Casacchia note the team “owes more than $108[M] to its top 40 creditors and service providers, including media and broadcast partners, insurers, the Coyotes Ice Den practice facility and Aramark Corp., the team’s concessions provider.” The Coyotes owe FS Arizona “$261,438 for production costs from last season," while KAZT-Ind is listed as the "second-largest media creditor, with an unsecured claim of $72,750 stemming from fees the Coyotes paid the independent Flagstaff station to broadcast 20 games during the 2008-09 season" (PHOENIX BUSINESS JOURNAL, 5/22 issue). 

    BACKING A BID: In Phoenix, Craig Harris reports Sports Properties Acquisition Corp. CEO Tony Tavares was working with Bulls and White Sox Chair Jerry Reinsdorf to “buy the Coyotes one day before the team filed for bankruptcy protection.” Public records reveal the agreement was “signed May 4 with the city of Glendale,” though no purchase price was listed. Glendale spokesperson Julie Frisoni said that the city “had no knowledge or information if Tavares was representing an outside entity, including Sports Properties” (ARIZONA REPUBLIC, 5/27).

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  • Molson Family Considers Bid To Acquire Control Of Canadiens

    Molson Family's Bid For Canadiens Would
    Not Involve Molson Coors Brewing Company
    Molson Coors Brewing Co. VP/Marketing Geoffrey Molson yesterday announced that he is “‘considering the possibility of submitting a proposal’ under which his generation of family members would purchase outright control” of the Canadiens, according to Jan Ravensbergen of the Montreal GAZETTE. Molson family spokesperson Luc Beauregard said that the situation is “fluid and in the early stages,” and he “would not rule out the financial participation of non-family partners.” Thomas and Hartland Molson bought the Canadiens in ’57, and the family retained an “indirect interest when George Gillett bought 80.1[%] of the club” and Bell Centre nine years ago. Geoffrey Molson said that the prospective offer would not involve the brewing company, and the family’s “interests in any such bid would have to be kept entirely separate from the 19.9[%] stake retained by Molson Coors” (Montreal GAZETTE, 5/27). Geoffrey Molson, who is a director of Molson Coors and serves as the brewer’s representative on the Canadiens’ BOD, said that he “would not participate in the work of either board when the sale is under discussion.” His brother, Molson Coors Vice Chair Andrew Molson, “will also remove himself from any discussion of the sale.” In Montreal, Pat Hickey notes the timetable for the team's sale calls for a deal to be completed before next month's NHL Draft. Geoffrey Molson's "possible entry into the race would seem to be too late in the process, but it might be an indication that the sale isn't going as smoothly as owner George Gillette would like" (MONTREAL GAZETTE, 5/27). 

    DEFENSIVE TRAP: The GLOBE & MAIL's Andrew Willis noted Canada-based telecom company BCE Inc. is "looking at playing defence by backing a bid" for the Canadiens, a "move that would keep rival Quebecor Inc. from seizing the prize." Sources indicated that BCE is "considering a minority role" in the bid by former Canadiens GM Serge Savard, and the "talk in Montreal business circles is that BCE ... would put up a maximum of [C$60M] for a franchise that is expected to fetch more than [C$400M] if it does sell."  Quebecor Media Inc. President & CEO Pierre Karl Peladeau earlier this month confirmed that he is "in talks to buy" the team (GLOBEANDMAIL.com, 5/22). French-language newspaper La Presse cited sources as saying "both firms had formed consortiums to take over the Canadiens," and BCE is "working with the investment arm of a major Quebec trade union." But Quebec-based National Bank Friday said that it was "confident 'that the chance of BCE acquiring or even bidding for the Canadiens is very low.'" The bank cited what it said were "assurances from the firm that the team did not fit in with its main priorities" (REUTERS, 5/22).

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  • Preds Investors Asked To Kick In Money To Make Up For Shortfall

    Predators Suffering Cash Flow Shortage
    After Not Making NHL Playoffs
    Not making the NHL playoffs "cost the Predators local owners, who recently had to kick in more money to Nashville's hockey enterprise because of a cash flow shortage," according to Brad Schrade of the Nashville TENNESSEAN. Attorney Bob Tuke, who reps Predators investor Herb Fritch, said that the "recent call for additional money among the owners resulted because of a 'slight revenue shortfall' when the team didn't make the playoffs at the end of the season." Tuke said that the amount was "not significant, although he did not have specific figures." Tuke: "It's a cyclical thing. This is not a big deal." Tuke said that there is "no rancor among the local owners." Tuke: "Generally, the financial condition is good. It will be a lot better when we get the issue of [former Predators investor William "Boots"] Del Biaggio resolved." Schrade noted the team's owners have "made an offer to buy Del Biaggio's shares out of bankruptcy." Predators Senior VP/Communications & Development Gerry Helper said that he "wouldn't 'confirm or deny' if there was a call for additional money." Meanwhile, Helper said that despite the "tough economic times, ticket sales are on track with where they were a year ago with renewals well over 70[%]." Helper added that new sales are "slightly ahead of last year." The team sold "about 8,700 season tickets last year, which include full and partial season packages" (Nashville TENNESSEAN, 5/23).

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  • Warriors Official Posts Comment Supporting Team On Fan Web Site

    Warriors Exec Dir of PR Raymond Ridder has acknowledged that he was the "author of an anonymous comment" posted Thursday afternoon to the WarriorsWorld.net fan Web site that "defended Warriors management," according to Tim Kawakami of the SAN JOSE MERCURY NEWS. Ridder: "It was 100% me. And I'll take 100% responsibility, if anybody thinks I did anything wrong. It was completely on my own. I've never been told to do anything by anybody here. It was just me. It was nothing malicious at all." Ridder, writing as "Flunkster Dude," wrote that he "appreciated that afternoon's season-ticket-holder conference call" conducted by GM Larry Riley, President Robert Rowell and broadcaster Bob Fitzgerald. Ridder posted, "I actually enjoyed the call and appreciate their honesty." Kawakami noted there was an "immediate uproar on the WW.net site when the site managers revealed that they had traced the comment's IP address to the Warriors offices." Ridder: "I just wanted to get the conversation going in a positive direction -- I thought we had a good conference call, I had some good conversations with some season-ticket-holders, then I got to my office and I looked on the Internet and all I saw was negative comments." Ridder said that "all he was trying to do was steer the conversation to a positive place." Ridder also confirmed that he has "posted four other comments to WW.net anonymously defending management or otherwise trying to get the conversation going in 'a positive direction.'" Kawakami wrote Ridder "wasn't trying to be malicious" in posting the comment, but it was a "terrible mistake" (MERCURYNEWS.com, 5/21).

    PAR FOR THE COURSE: In S.F., Ray Ratto wrote the incident made Warriors officials and the team they are "gently running into the ground look petty, paranoid, manipulative and dishonest on top of already looking ignorant, irrelevant and self-aggrandizing." The problem with Ridder's comment "isn't that the Warriors shouldn't promote their side but that they're so spectacularly bad at it." On sites like WarriorsWorld, those with "other avenues of discourse on a given subject (the media, club officials, politicians, etc.) either announce themselves ahead of time or simply stay outside," and Ridder "crossed that line, no matter what his intentions might have been, and he made the organization, already known for its hypersensitivity to facts and criticism, look even more so." Ratto: "But to focus on Ridder is to miss the bigger picture" (S.F. CHRONICLE, 5/24). CNET.com's Chris Matyszczyk wrote, "You might think that Flunkster Dude has flunked the very first test of social media. You might think that someone who posts anonymously about honest, when himself being just slightly less than entirely honest about his interest in the matter, might just think about a career in politics" (CNET.com, 5/23). In California, Cam Inman wrote the comment was a "slimy way to drum up positive chatter on the Internet," and Ridder is "not a slimy guy, so I really fear what this will do to this reputation." But what Ridder did is "not all that uncommon in the mainstream media." Inman: "This is a wake-up call to blogs, everywhere: You are not off-limits from the propaganda teams often spew" (CONTRA COSTA TIMES, 5/22).

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  • English Soccer Club Burnley Strikes Gold With EPL Promotion

    Burnley Will Earn A Minimum Of $47.9M
    In TV Revenue In EPL Next Season
    English soccer club Burnley Chair Barry Kilby said that the club "will be rich beyond their wildest dreams" after winning promotion to the EPL for next season, according to Oliver Kay of the LONDON TIMES. The club next season will earn a minimum $47.9M (all figures U.S.) in TV revenue next season, as well as two guaranteed $23.9M "parachute payments" even if they are relegated back to a lower division for the '10-11 campaign. Burnley manager Owen Coyle said that the club, "assembled on a shoestring budget, will attempt to play attractive football in the Premier League." Burnley's promotion means that the English town, with a population of about 88,000, "will be the smallest to have" an EPL club since the league was created in '93 (LONDON TIMES, 5/26). Prior to the '08-09 season, Kilby promised that anyone who bought a season ticket was "guaranteed a season ticket for 2009-10 if the club earned promotion." About 7,000 fans signed up for the deal (PHILADELPHIA DAILY NEWS, 5/26).

    TOONED OUT: Newcastle Owner Mike Ashley yesterday "issued a personal apology for the 'catastrophe'" of the club's relegation from the EPL. Ashley: "Seeing Newcastle United relegated from the Premier League has been a catastrophe for us all. I fully accept that mistakes were made during this and previous seasons and I am very sorry for that" (LONDON TIMES, 5/27). In London, Paul Kelso reported Newcastle's relegation decreased the club's estimated value to about $143.8M. Ashley, who bought the club in '07 for about $214.1M, last year was seeking around $351.5M in a sale of the team, but sources indicated that Ashley now "would have to settle for no more" than $143.8M, "assuming a buyer could be found for a club about to taste the realities of life on short rations" (London TELEGRAPH, 5/26).

    MORE STABILITY UNDER GLAZERS: ManU CEO David Gill said since the Glazer family acquired the team in '05, there is "stability, and long-term decisions can be taken." Gill said of the club's current debt of approximately US$797M and whether the current economic climate would affect future borrowing, "That borrowing was put in place on a long-term basis back in August 2006 and the club can service that debt easily. … There's no real pressure there. We've shown good growth in the commercial area since the takeover" (BBC.co.uk, 5/26).

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  • Dallas Pro Sports Teams Working To Retain Corporate Clients

    Cowboys' New Stadium Will Not Have Naming-
    Rights Partner When It Opens This Summer
    The current economic climate has "underscored the importance of corporate America to Dallas' professional sports," as the Cowboys, Rangers, Mavericks and Stars have "scrambled to retain and reward their best customers -- businesses that purchase suites and high-dollar tickets and, in good times, renew at season's end," according to Chuck Carlton of the DALLAS MORNING NEWS. While Dallas has "weathered the economic downturn better than other cities, its four major pro teams have been forced to be inventive." Rangers Exec VP/Sales & Marketing Andrew Silverman: "We can't survive without the corporate client. Any sports team ... we need that corporate dollar." The Cowboys' new stadium will not have a naming-rights partner when it opens this summer, and Cowboys Owner Jerry Jones said, "We are so sensitive, as everybody is, to the economic times that we're in. And that (stadium sponsorship) will happen at a time when it's probably more appropriate and less sensitive than it is right now." The Rangers "might have been the first Dallas-area pro team to feel the gusty economic headwind," as the team's season-ticket renewals "dropped by 10[%], much of that from the corporate market." The Rangers have "offered reduced ticket prices, aimed at both the corporate clients and the average fan." The Mavericks have already announced for the '09-10 season that it "will be lowering prices for 50[%] of its tickets while leaving the remaining half unchanged." Mavericks Owner Mark Cuban said businesses "realize it provides cheap incentives for their employees." Cuban: "It's easier to give somebody good Mavs tickets and say, 'Take your family,' than to give you a raise." Meanwhile, Stars President Jeff Cogen said that season-ticket renewals for the team are "down about 4[%] from the same point last year facing a mid-June deadline." Cogen said that "most of the decline can be traced to corporate clients' slower activity" (DALLAS MORNING NEWS, 5/24).

    INTEREST PICKING UP: The DALLAS BUSINESS JOURNAL's Katherine Cromer Brock reports the MLB Rangers' season-ticket sales and corporate sponsorships "were down this year, but with early success has come a resurgence of attendance and game revenue for the organization." Rangers Exec VP/Communications John Blake said that attendance at Rangers Ballpark hit 104,859 during the three-day series against the Angels from May 15-17, the "highest attendance for a three-day stretch since June 2007." As of May 18, season attendance at the ballpark was "485,873, up 28,265 year-over-year." Blake: "That's significant. We were starting at a lower base with the season ticket drop-off from last year. We were battling it for season tickets and hospitality, corporate suite rentals and nightly suite rentals." Silverman said that corporate ticket sales were "off less than 10%." But Blake said that game revenue this year has "seen a 6.4% increase from the same point in last year's season" (DALLAS BUSINESS JOURNAL, 5/22 issue).

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