SBD/Issue 195/Franchises

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  • Reinsdorf Group Submits $148M Offer For Coyotes In Court

    Reinsdorf's Group Submits
    $148M Offer For Coyotes
    A group headed by White Sox and Bulls Chair Jerry Reinsdorf entered a $148M offer for the Coyotes in U.S. Bankruptcy court Friday night. The group, known as Glendale Hockey, also includes Arizona attorney John Kaites and will be joined by former Nationals President Tony Tavares and other equity investors. The offer is $64.5M less than RIM co-CEO Jim Balsillie offered when he proposed to buy and relocate the Coyotes to Hamilton in early May. Reinsdorf's bid, which will not exceed $148M, would see Glendale Hockey renegotiate more than $127M in claims from secured and unsecured creditors. The offer also calls for a new Jobing.com Arena lease with Glendale. The claims to be renegotiated include: $79.7M owed to Michael Dell's MSD Capital (secured creditor), $38.8M owed to the NHL (secured creditor), $5.6M owed to Aramark Sports and Entertainment (unsecured creditor), $3M owed to the city of Glendale (unsecured creditor), $355,000 owed to AEG Facilities (unsecured creditor) and $320,000 owed to FS Arizona (unsecured creditor) (Tripp Mickle, SportsBusiness Journal). The GLOBE & MAIL's Waldie & Shoalts reported "any additional amounts" of club debts up to the $148M maximum would "go toward other unsecured creditors but not" Coyotes Owner Jerry Moyes. The offer is "conditional on Reinsdorf reviewing the club's finances and being 'satisfied with the results of such investigation.'" An NHL source close to Commissioner Gary Bettman said that league officials are "confident" that U.S. Bankruptcy Judge Redfield Baum "will find the offer acceptable even though it is far less than Balsillie's bid." The source: "The way it's structured, it really takes care of all the unsecured creditors except Moyes, who isn't really an unsecured creditor" (GLOBE & MAIL, 6/27). In Toronto, Kevin McGran notes if the sale to Reinsdorf's group is "denied, another auction would be held in September for buyers like Balsillie who want to move the team." Balsillie spokesperson Bill Walker: "We've just received the new offer. We will need time to study it. But we wish Mr. Reinsdorf well, he is a fine professional sports owner. Jim Balsillie's effort to purchase the Coyotes and relocate the team to Hamilton continues" (TORONTO STAR, 6/27).

    GREAT ONE TAKING A HIT: The GLOBE & MAIL's Allan Maki wrote Coyotes Managing Partner and coach Wayne Gretzky is "being rubbed face-first against the glass; his character and allegiances called into question by those who want a seventh NHL franchise in Canada and believe it is the Great One's obligation to make it so." Gretzky, "whether he cares to admit it," is "involved in the Phoenix situation and his opinion can sway others." If Gretzky "were to tell ... Bettman, 'Hey, I love Phoenix but this team needs to go,' then rest assured the league would be moving heaven and ice to find the Coyotes a new locale." But instead the NHL is "fighting to stay in Arizona while Mr. Gretzky is content to avoid the issue by saying how much he would like to see an NHL team in both Phoenix and Hamilton" (GLOBE & MAIL, 6/27).

    Writer Questions Coyotes'
    Chances Of Survival In Phoenix
    TEMPORARY FIX: In Vancouver, Ed Willes wrote it "appears Reinsdorf has saved the Coyotes for the time being but, really, what's the point?" Willes: "The patient is terminal. The NHL might be able to buy it another year. But the sickness remains." Reinsdorf in offering to buy the team "has basically absorbed the debt and now has control of an asset he can flip for $200[M] or so." However, the Coyotes "will also have an owner who isn't interested in investing in the team; a new coach when Wayne Gretzky is taken out; and a lineup of kids who finished tied for 13th in the conference last season." Willes: "This is not a recipe for success" (Vancouver PROVINCE, 6/28). Meanwhile, the GLOBE & MAIL's David Shoalts notes by July 1 "up to 10 players from the Phoenix Coyotes roster could become restricted or unrestricted free agents," and in theory, a rival GM "could submit a generous offer sheet to one of those restricted free agents, daring the NHL as financial custodian of the team to match the offer and keep the player." Shoalts: "How will the league respond if the sharks start circling the Coyotes' free agents? ... Does the NHL tell the rest of the league to back off, thereby skewing the free-agent market?" NHL Deputy Commissioner Bill Daly said that there "will be no interference from the league," and Shoalts wrote that is the "wise thing to do ... given the obvious conflict-of-interest and collusion implications" (GLOBE & MAIL, 6/27).

    SALARY DUMP: In Vancouver, Tony Gallagher noted the Flames Saturday acquired the negotiating rights to D Jay Bouwmeester from the Panthers for a "player they weren't going to re-sign in [D] Jordan Leopold and a third-round pick." But in order to "clear the cap space to have even a ... chance to sign Bouwmeester, they first off-loaded the $2.3[M] cap hit" of D Jim Vandermeer to the Coyotes for F Brandon Prust, who makes $500,000. Gallagher: "There you have it in a nutshell. A league run for the benefit of losers to the detriment of the teams that have a decent hockey market and know how to run their businesses properly. It's a league where the fans in the best markets get screwed" (Vancouver PROVINCE, 6/28).

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  • Former Rockets President Postolos Expresses Interest In Bobcats

    Postolos Showing Interest
    In Acquiring Bobcats
    Former Rockets President and Houston-based The Postolos Group (TPG) Owner George Postolos has "inquired about the Bobcats' availability and recently visited Charlotte to tour Time Warner Cable Arena and discuss the team's finances," according to sources cited by Rick Bonnell in a front-page piece for the CHARLOTTE OBSERVER. Postolos "doesn't appear to have the personal wealth to buy the Bobcats, but he would have the connections to assemble an investment group." Bonnell noted TPG's Web site indicates the group "actively seeks to acquire major league teams." Meanwhile, the "only other known potential bidder" is Bobcats Managing Member of Basketball Operations Michael Jordan. Sources said that others have "inquired but did not provide names of those interested" (CHARLOTTE OBSERVER, 6/28). In Houston, Jonathan Feigen noted Postolos in '06 said that he "hoped to be part of an investment group purchasing a team." NBA Commissioner David Stern at that time said that he "thought 'without a doubt' that Postolos eventually would own an NBA team" (HOUSTON CHRONICLE, 6/28).

    THE JORDAN RULES: FanHouse.com's Kevin Blackistone said of Jordan possibly owning the Bobcats, "This is perfect for him and this is a good place to do it." Blackistone: "This is a franchise that’s been beat up, been beat up so much that it’s very cheap, valued at $284(M) right now which is less than what Bob Johnson actually bought it for.” Dallas Morning News columnist Tim Cowlishaw: “He’d be a great owner as long as his first order of business is to hire a GM and realize he’s not going to go spend the 80 hours a week working the phones and doing the things that the modern GM does" ("Around The Horn," ESPN, 6/26). ESPN’s Michael Wilbon said Jordan should own the team because “he hasn’t shown he can run the team" ("PTI," ESPN, 6/26).

    STAYING ON: In N.Y., Julian Garcia reported Nets Sports & Entertainment President & CEO Brett Yormark, while "not ruling out the possibility of a sale" of the team, said that interest in buying a stake in the team has "increased only because of the team's impending move to Brooklyn and not because" Nets Owner Bruce Ratner is looking to sell. Yormark: "The current ownership group remains committed to the Nets and to Brooklyn and the Barclays Center" (N.Y. DAILY NEWS, 6/27).

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  • Ricky Rubio Reportedly Receiving Offers To Play In Turkey, Spain

    Rubio Entertaining Offers To Play In
    Turkey Or Spain Instead Of Minnesota
    Winners Factory consultant Tim Shea, whose firm is the European agency for T'Wolves first-round draft pick G Ricky Rubio, Saturday said that Rubio is "receiving offers this weekend to play for a club in Turkey and Real Madrid, which would decrease the likelihood of him playing in the NBA next season," according to Marc Berman of the N.Y. POST. Shea said that he "expects a formal offer from a Turkish club" today, and that the offer "would be about $1[M], with another $2[M] going toward a $6[M] buyout for his Spanish team, DKV Joventut." Shea added that Real Madrid also is "in talks with Joventut." Shea said that if the T'Wolves "traded Rubio to the Knicks, it could sway Rubio into playing in the NBA next season" (N.Y. POST, 6/28). Meanwhile, Knicks President of Basketball Operations Donnie Walsh Friday said that he is calling T'Wolves President of Basketball Operations David Kahn to see if Rubio "can be had after Rubio's father told a Spanish Web site that Rubio likely will stay in Spain for the next two seasons instead of paying off a buyout." Rubio did not attend the T'Wolves' introductory press conference Friday in Minneapolis, and a Knicks source said that the team "believes Rubio's preference is for the T'Wolves to trade him to the Knicks." The N.Y. POST's Berman wrote, "Having Rubio on Broadway with a major marketing deal would be ideal" (N.Y. POST, 6/27).

    WRONG PLACE, WRONG TIME: Rubio said of not working out or interviewing with the T'Wolves ahead of the NBA Draft, "The NBA is attractive, but if you don't want to be on a team at this time, well, you can wait. Right now, the work is that of the agent." Kahn said that he is "prepared for a 'turbulent' summer if the matter comes to that and promised to remain patient." In Minneapolis, Jerry Zgoda noted the T'Wolves "maintain Rubio's NBA rights as long as he's playing professionally elsewhere." Kahn: "If there's a team out there that can wait, it's us. If it means we have to wait a year, we wait a year. If we had to wait, God forbid, two years, he'd be 20 when he got here." Zgoda wrote the team "might be able to wait on the court," but off the court the T'Wolves "lost nearly $20[M] last season, can't sell many upper-level tickets for $5 and possess minority owners concerned and hurting from the economic downturn." Rubio's presence next season "won't fill Target Center, but it will grow buzz about the team" (Minneapolis STAR TRIBUNE, 6/27). In St. Paul, Don Seeholzer wondered if T'Wolves fans are "ready to wait a year or two" for Rubio. Kahn: "I hope people understand that it's not just about one person here. In order to be a championship-contending team, we're going to have to have seven or eight guys" (ST. PAUL PIONEER PRESS, 6/27).

    GLOBAL STAR POWER: TRUEHOOP's Henry Abbott cited sources as saying that Rubio's buyout from Joventut is "something of a red herring." Joventut "does not sell a ton of tickets, does not have much of a fan base, and does not make a lot of money." But Rubio "has global star power," and that "sets up a dynamic where everyone involved ... is better off financially if Rubio comes to the NBA where he can realize his star value on and off the court." If Rubio can get other parties to "pay some or all of his buyout, there are plenty of people willing to float him a loan for the difference" (ESPN.com, 6/26).

    DID PRIVATE MEETING TAKE PLACE? In St. Paul, Charley Walters cited a source as saying that Rubio and his father "were to fly to Minneapolis on Saturday to quietly meet" with Kahn. Rubio and his father planned to "sneak into Minneapolis on Saturday, and not on Friday when the Wolves' other top draft picks ... were publicly introduced" because they "didn't want the attention with the contract issue unresolved." The T'Wolves "don't plan to exert any pressure on Rubio," but they will "do what they can to accommodate the flashy point guard from Spain without interfering with his current contract status" with Joventut (ST. PAUL PIONEER PRESS, 6/28).

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  • Islanders Hope John Tavares Will Return Team To Prominence

    Islanders See Ticket Sales Boost
    Following Selection Of Tavares
    Islanders President Chris Dey said that the team “became relevant again” after drafting C John Tavares with the No. 1 pick in Friday’s NHL Draft, according to NEWSDAY. Dey said that “more than $79,000 ticket plans were sold in the first hour after the pick, along with $15,000 worth of Tavares merchandise.” More than 10,000 fans attended the team’s draft party at Nassau Coliseum, and many were "lined up for merchandise as clerks made up" Tavares jerseys on the spot. The Islanders also are “planning a promotion in the next couple of weeks in which fans will be invited to a hospitality event with Tavares if they purchase season tickets now through Sunday” (NEWSDAY, 6/27). In N.Y., Dan Martin wrote it “generally is not a good sign when a team’s draft party draws more fans than many home games, but at least the Islanders sent their faithful home happy” by picking Tavares. Dey said of the turnout, “To get this many people in the middle of June, it’s a statement that this is still a great hockey market.” Dey added that marketing “did not factor into the decision to pick Tavares.” Dey: “That was not a consideration. It’s clearly a boost for business, but this was strictly a hockey decision” (N.Y. POST, 6/28). TSN’s Pierre McGuire prior to the Islanders drafting Tavares commented on the crowd at the Nassau Coliseum for the team's draft party. McGuire: "You just saw that massive crowd down on Long Island. If you get John Tavares there, you’ll get more crowds like that all the time for your hockey team, not just the draft" ("NHL Draft," Versus, 6/26).

    Patience Required: NEWSDAY wrote, “Don’t expect to see John Tavares’ face on a billboard overlooking the LIE just yet.” Islanders Owner Charles Wang is “taking the low-key approach with his new No. 1 pick.” Wang: “This is no Jesus-savior kind of thing. This ain’t like getting LeBron James, as good as (Tavares) is” (NEWSDAY, 6/27). On Long Island, Anders Lee wrote Tavares “knows the ropes in terms of fulfilling his responsibilities as the new face of a franchise.” Tavares said the “main thing is you’ve got to win. That’s the biggest thing to attract attention is to bring a winning product on the ice, and obviously, that’s the first step in getting a club that can compete for a playoff spot and make the playoffs” (NEWSDAY.com, 6/27).

    STAR POWER: On Long Island, Arthur Staple noted the Islanders are “desperate for a star of some kind,” and they will “market the heck out of Tavares.” They “will do that because they have to, because there’s nothing else to keep the fans coming into the building” (NEWSDAY, 6/27). Staple today writes the Islanders “won the NHL draft … there’s no questioning that,” but they “won’t be doing much more winning through the 2009-10 season” (NEWSDAY, 6/29). On Long Island, Greg Logan wrote Tavares “brings his own star with him to a team that is desperate for the boost at the box office” (NEWSDAY, 6/27). Tavares threw out the first pitch before yesterday’s Yankees-Mets game at Citi Field (NEWSDAY.com, 6/28).

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  • Sounders Weigh Benefit Of More Seats, Intimate Atmosphere

    Sounders Expecting To Sell Out
    Every Game Of Inaugural Season
    The MLS Sounders FC are walking a "fine line between meeting the demand for tickets and maintaining an intimate atmosphere" at Qwest Field, according to Tom Wyrwich of the SEATTLE TIMES. The team yesterday opened up about 4,000 additional seats for sale in the south end zone for its game against the Rapids, "essentially making the entire lower bowl available." With a current capacity of 32,500, Sounders investor & GM Adrian Hanauer said that it is “‘highly unlikely’ any more seats will become available during the regular season.” Hanauer: “We’re pretty much maxed out on the lower bowl, and there are not a lot of options for us.” Wyrwich noted the tarps covering the upper deck and the Hawk’s Nest section “will almost surely not come down” because they have been “sold to the team’s sponsors.” Also, more open sections “would require more staffing.” Meanwhile, Hanauer “stressed the importance of also not messing with what he feels is the best game experience in the MLS.” Hanauer: “We want the best atmosphere, we want intimacy, we want the seating packed -- we don’t want patches of people here and there. We want to try and match supply and demand” (SEATTLE TIMES, 6/28). In Tacoma, Don Ruiz reported no more than a “few hundred tickets are left for any remaining home league game,” and Hanauer said that he “expects them all to sell out” (Tacoma NEWS TRIBUNE, 6/27).

    BLUEPRINT FOR SUCCESS: The AP’s Tim Booth wrote the “overwhelming success of the first-year Sounders is providing an example for future MLS teams to follow.” Seattle is “easily on pace to shatter the previous attendance mark,” set by the Galaxy in the league’s first season. Univ. of Oregon Warsaw Sports Marketing Center Managing Dir Paul Swangard: "One of the current examples that we can show of the best practices of starting a team from scratch would have the Sounders all over it. … It’s across the four P’s of marketing: product, price, place and promotion. All the facets of what we would say is sports marketing 101 they’ve accounted for and are doing well.” Hanauer said, “What maybe has surprised me is that it’s become so mainstream, so prevalent, all the way through the community, through every type of sports fan so quickly” (AP, 6/27).

    INT'L RELATIONS: In Seattle, Art Thiel noted a “small percentage” of fans yesterday "showed up early to take advantage of the Sounders’ late offer to put the first half" of the Brazil-U.S. Confederations Cup Final on the Qwest Stadium screens. When the Sounders game started, the Cup final “was blacked out,” but “not a peep of protest was heard.” Thiel: “These were the Sounders, damn it, and the rest of the world for the next two hours could fight for second place in the attention sweepstakes.” However, the MLS practice of releasing top players in midseason to play for national teams in international competitions such as the Confederations Cup could “chip away at the league’s credibility.” Sounders G Kasey Keller: “These MLS fans pay good money to see their top players, who now are off with their national teams. You gotta have your stars on the field” (SEATTLEPI.com, 6/28).

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  • Pirates President Coonelly Addresses Team Payroll, Attendance

    Pirates President Points To Attendance As One
    Reason For Payroll Disparity With Similar Teams
    The Pirates' $52M payroll compared to the Brewers' $80M "appears to be the single most compelling evidence that the Pirates are not spending all they can," but Pirates President Frank Coonelly is "adamant it is not so," according to Dejan Kovacevic of the PITTSBURGH POST-GAZETTE. Coonelly, "without divulging specific numbers for either team," noted the Brewers, playing in a smaller market, have "built up [their] product to the point that it has a $50[M] advantage over the Pirates in local revenue, thanks almost entirely to having drawn 3 million fans last year" compared to the Pirates 1.6 million. Coonelly: "Attendance is the biggest factor, by far. And the best way to look at it is this: The gap between the teams' local revenue is larger than the gap between our payrolls." More Coonelly: "There's no reason why Pittsburgh cannot support a payroll equal to or even exceeding the payroll that Milwaukee currently has. Because the Brewers have built a core that was sustainable, they've grown to 3 million fans while we have stayed relatively stagnant. When we demonstrate to our fans that we're building our organization the right way and putting the right pieces into place, I have every confidence that we're going to have attendance that is equal to teams like the Brewers." Kovacevic noted the Pirates have been "profitable the past five years and probably will be again in 2009, though they might be cutting it close given flat attendance and the sagging economy." Coonelly said that the team's financial position is "strong enough that it will not influence baseball moves" (PITTSBURGH POST-GAZETTE, 6/28). In Pittsburgh, Chuck Finder noted the Pirates entering Friday night through 32 games at 38,362-seat PNC Park had seen a 6% increase in attendance to 18,063 from a 16,921 average through the first 32 home games last season (PITTSBURGH POST-GAZETTE, 6/27).

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  • Wilson Will Wait Before Reworking Bills Toronto Series Deal

    Wilson Prefers To Wait Couple Of Years 
    Before Reworking Deal For Toronto Series
    Bills Owner Ralph Wilson yesterday said that he would "prefer waiting 'two or three years' to determine whether" the Bills Toronto Series is a success before he would "consider reworking the contract reached last year" with Rogers Communications, according to John Wawrow of the AP. Rogers officials have "expressed interest in adding at least one additional regular-season game a year, particularly if the NFL goes forward with a proposal to expand its regular-season schedule to 17 or 18 games." Wilson: "I'm sure they want another game. And who knows? I don't know whether they'll get another game or not. We'll have to see how it works out up there." Wawrow noted high-priced tickets "averaging just under $200 were considered a major reason why Toronto organizers experienced difficulty selling out" the Dolphins-Bills game last December. Organizers have "already attempted" to address that concern by lowering prices by 17% for this season's game against the Jets on December 3. Meanwhile, another "disappointment for the Bills was how the game lacked a 'home' atmosphere." However, the deal is "already paying off for the Bills, who are getting $78[M] -- more than double their calculated 2006 operating income -- to effectively lease their games to Toronto organizers." Wilson: "We're doing this to keep the team (in Buffalo). I could see why people think that this is just the first step of moving the team. But they don't realize how difficult it is to compete against the Cowboys and all these new stadiums" (AP, 6/28).



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