SBD/Issue 204/Franchises

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  • Cubs May Become First MLB Team In 39 Years To File For Bankruptcy

    Cubs May File For Bankruptcy
    To Clear Future Liability
    The Cubs may become the first MLB team in 39 years to "file for bankruptcy as Tribune Co. seeks to sell the franchise after months of negotiations," according to Bensinger & Dechter of BLOOMBERG NEWS. Tribune Co. sought Chapter 11 bankruptcy protection in December, and sources said that a brief Cubs bankruptcy "would be a legal maneuver to clear the team from any future liability in the Tribune bankruptcy." A source said that Tribune Co. Chair Sam Zell "pledged the company's interest in the Cubs as collateral when he negotiated the deal to take" Tribune Co. private in '07. The Cubs "weren't a part of Tribune's bankruptcy filing." Sources said that it "remained possible the sale would close without the team filing." New York Univ.'s Tisch School of Sports Management professor Michael Cramer, who formerly served as MLB Rangers President, said that a bankruptcy filing "could guarantee that the Cubs are sold free and clear of Tribune's creditors." Cramer: "This would make sense for [MLB]. They would like to see that asset be stand-alone, very clean, not tied up in other issues." Sources said that a Cubs bankruptcy filing "would be designed to allow for the fast disposition of the team's assets," as it "could be accompanied by a motion to sell the team with an agreed-upon bidder." National Baseball HOF & Museum Librarian Jim Gates said that the last MLB bankruptcy "occurred in March 1970 when the Seattle Pilots went broke." The Pilots "were bailed out" by Bud Selig and became the Milwaukee Brewers (BLOOMBERG NEWS, 7/13).

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  • Gretzky Fights Glendale Request For Release Of His Financials

    Hearing Slated To Take Place This Week On
    Release Of Gretzky's Financial Records
    Coyotes Managing Partner and coach Wayne Gretzky's attorneys Friday filed a motion in Arizona bankruptcy court to block Glendale's request for Gretzky to "turn over personal financial records as part of the legal battle over the future" of the franchise, according to Paul Waldie of the GLOBE & MAIL. The city wants the court to "force Gretzky to produce a stack of documents and submit to questioning under oath." Glendale is challenging whether Gretzky and Coyotes Owner Jerry Moyes are "legitimate creditors." The city "wants to know if Gretzky and Moyes received dividends or other payments in return for their ownership stakes." But Gretzky's attorneys in court filings said that he would "only agree to turn over 'non-private, non-privileged documents' and they criticized the city for seeking personal financial information." The filings read in part, "It is difficult to conceive how (the city) could possibly demonstrate how Mr. Gretzky's personal tax returns are relevant to the acts, conduct, or property or to the liabilities and financial condition of the (Coyotes), or to any matter which may affect the administration of the (Coyotes) estate." Bankruptcy court judge Redfield Baum is "slated to hold a hearing on the issue" this week (GLOBE & MAIL, 7/11). Meanwhile, Coyotes fans have started a petition imploring Baum to "do what he can to leave the team in Phoenix" (TORONTO STAR, 7/12).

    STEPPING ONTO THE ICE: Research Edge LLC Managing Dir Daryl Jones said that his group that is bidding for the Coyotes "sent an application to the NHL on Saturday." Jones said that "from an investment standpoint, 'it's probably worth a look' any time there is only one bidder." He added that his group "internally is looking at a three-year proving time," or perhaps longer. Jones: "We're trying to develop a business plan to make the Phoenix Coyotes viable in Phoenix-Glendale" (ARIZONA REPUBLIC, 7/12).

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  • Padres Looking To Build Season-Ticket Base, Create More Value

    Garfinkel Would Like To Install New
    HD Video Board At Petco Park
    Padres President & COO Tom Garfinkel said he is working on growing the club's season-ticket holder base and "creating more value and building reasons to be a season-ticket holder," according to a Q&A with Bill Center of the SAN DIEGO UNION-TRIBUNE. Garfinkel, who joined the team in April, said the club is "putting together a plan for 2010 that includes a number of different elements" to help connect with fans. Garfinkel: "Some of them will be forums and opportunities to listen to the fans." Garfinkel noted the season-ticket renewal rate last winter was 55%, and he said, "We've got to earn back everyone who left and grow on top of that." Meanwhile, when asked if there could be a change in uniforms, Garfinkel said, "We can't change anything for 2010. The potential for adjustments beyond that, we're open-minded. The fans seem to like the traditional brown-and-yellow in terms of merchandise sales." Garfinkel said of the term "Friars," which is often used in referring to the team, "I wouldn't say I dislike it. We're the Padres. We should refer to ourselves as the Padres. Friars is part of our history. But in formal settings, in the broadcast booth, in releases, we should be the Padres." Garfinkel said of possible changes to Petco Park, "I'd like to put in a new high-def video board in left field." He added, "The box offices are not in the perfect location. ... If someone wants to buy a ticket from us, they shouldn't have to stand in long lines or walk to the other side of the ballpark." Garfinkel said the reaction to the team's new initiative of serving breakfast at Petco Park prior to Sunday home games has been "all positive." Garfinkel: "Everyone agrees this is a 'breakfast town' and that it's an original way to capitalize on the beauty of Petco Park while providing fans a uniquely San Diego experience" (SAN DIEGO UNION-TRIBUNE, 7/11).

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  • Marlins Payroll Will Depend On Attendance At New Ballpark

    Marlins President Hopes Team Sells Out Every
    Game During First Season At New Ballpark
    Marlins President David Samson said that attendance at the team's new ballpark will "directly impact the team's payroll," with the goal of being in the "midrange of all teams beginning in 2012," when the park is scheduled to open, according to Barry Jackson of the MIAMI HERALD. Samson said that he "hopes the Marlins will sell out every game during their first season" at the 37,000-seat ballpark. Samson: "This market should be able to do that." Samson added, "Now that we will control suites and advertising and we will collect revenues from all those things, attendance becomes key. Food and beverage (sales) become key. You need people in the ballpark to hit your target." The Marlins have about 5,000 season-ticket holders this season at Land Shark Stadium, and Samson said it "is the hope" that the team can sell 20,000 in the new ballpark. Samson: "Tickets will be hard to get. We will have a lot of season-ticket holders and they will be selling to their friends." Samson also noted that the Marlins have "decided to lower the number of suites in the stadium from 60 to 49 after 'looking more carefully at the suite market and some areas where it may be soft.'" He said that 26 of the suites will be behind home plate, 22 "between home plate and first base and one down the third-base line." Samson also "envisions one of the suites being a 'super suite' in which fans can buy tickets but do not own it." He indicated that ticket prices for the ballpark will not be determined "until much closer to the opening" (MIAMI HERALD, 7/12). 

    PAY IT FORWARD: In Miami, David Neal noted it will cost $2.4B to repay $409M in bonds that will primarily cover the construction of the new ballpark, and "even when figuring you'll be paying with tomorrow's dollars, that's some serious vigorish slapped onto the principle for a municipal deal." Neal: "Isn't this exactly the kind of philosophy, employed by individuals and corporations, that's led to so many being unemployed? It smells worse than a state fair livestock pen in a rainstorm" (MIAMI HERALD, 7/11).

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  • MLB Franchise Notes: Rays To Maintain Payroll If Still In Race

    Rays Owner Sternberg Proud Team Ranks
    As "Most Affordable" In ESPN Study
    Rays Owner Stuart Sternberg said that the team "won't move to cut payroll this season as long as they are 'in the hunt' for a postseason berth." Sternberg: "As long as we're in the hunt, I don't see us, because of financial reasons, pulling back from that. Clearly, though, it's a multiyear process, and the money doesn't come out of thin air. And money spent this year and budgetary shortfalls from our end from a revenue standpoint lead toward future years being a little bit leaner. I won't say a lot leaner but certainly a little bit leaner, for starters." In St. Petersburg, Topkin & Smith noted Sternberg was "incredibly proud about ESPN ranking the Rays' fan experience as the 'most affordable' in all of major sports," and the Rays will "celebrate the ranking with 'Even More Affordable Night' on Aug. 19 against the Orioles," when the team will sell $0.50 hot dogs (ST. PETERSBURG TIMES, 7/11). Also, in St. Petersburg, Aaron Sharockman notes the Rays had "set a goal of matching the major-league average attendance," but the team has "fallen far below that during the season's first half." Attendance has "increased by about 2,500 fans per game from 2008," but the Rays "remain among the poorest drawing teams." Saturday and Sunday games at Tropicana Field "draw relatively well," but at Monday-Friday games "empty seats often outnumber filled ones" (ST. PETERSBURG TIMES, 7/13).

    NEEDED BOOST: In Phoenix, Nick Piecoro notes more than halfway through the D'Backs' home schedule, "attendance and revenues are down," but team execs said that "action by the club's ownership group earlier this year will prevent the losses from negatively affecting major-league payroll in coming years." D'Backs Managing General Partner Ken Kendrick said that the club raised $50M "in a cash call to team investors earlier this year, a move that he said was designed as a safeguard against the slow economy." The team through Friday was averaging 25,437 fans per game at Chase Field, down 14.8% from the same period last season. D'Backs President & CEO Derrick Hall said that the club's loss in projected revenues this year "could be about equal to" the $10M raised for '09, but it "appears the cash infusion might have helped prevent ownership from asking General Manager Josh Byrnes to slash payroll" (ARIZONA REPUBLIC, 7/13).

    Twins Hoping To Land 2014 All-Star Game
    At New Target Field
    TWIN BIDDING: In St. Paul, Charley Walters reported the Twins have "commenced the formal application process with hopes of landing the 2014 All-Star Game at Target Field." The Twins are "confident about their chances of securing the 2014 event, but don't expect a final decision for some time." A source said that the Royals' Kauffman Stadium is the "front-runner for the 2012 All-Star Game," while the Mets are the "likely host for the 2013 game" (ST. PAUL PIONEER PRESS, 7/12). In Minneapolis, Sid Hartman reported the Twins through 46 games had drawn 1,280,357 fans, or an average of 27,834 per game (Minneapolis STAR TRIBUNE, 7/12).

    MAKING FANS BLUE: SI.com's Jon Heyman reported the Blue Jays "could still wind up keeping" P Roy Halladay, who has been mentioned in trade rumors. Blue Jays officials have suggested to other teams that they are "concerned about the fan backlash in Toronto, which apparently has been significant enough for them to take note" (SI.com, 7/10).

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  • Franchise Notes

    Warriors President Rowell Denies Reports
    Owner Chris Cohan Looking To Sell Team
    Warriors President Robert Rowell Friday "disputed reports about owner Chris Cohan's interest in selling the team." Rowell: "The Golden State Warriors are not for sale. There is not a 'For Sale' sign up." Sources had said that Cohan was "interested in selling the team and entered discussions with" Oracle CEO Larry Ellison and a group led by the team's minority owners (CONTRACOSTATIMES.com, 7/10).

    SUMMER CAMP: In Charlotte, Tom Sorensen wrote Bobcats Managing Member of Basketball Operations Michael Jordan was "hilarious and engaging" at the team's fantasy camp Saturday at Time Warner Cable Arena. Sorensen noted the idea for the fantasy camp "came out of a staff meeting" about how to sell tickets and Jordan. Bobcats President & COO Fred Whitfield: "It's not about sitting Michael in the lobby and just signing autographs. It's about how we can add value to everything we do." Whitfield said that on June 1, before the fantasy camp was announced, premium season-ticket renewals "were down 22[%] from a year ago." Whitfield: "Now we're 5[%] ahead" (CHARLOTTE OBSERVER, 7/12).

    RESTRICTED MOVEMENT: In N.Y., Larry Brooks wrote Blackhawks GM Dale Tallon's "blunder in not getting qualifying offers to his restricted free agents in the timely manner mandated" by the NHL's CBA is "likely to mortally wound the Blackhawks next summer." The Blackhawks "will not have enough space to remain intact while accommodating" C Jonathan Toews, RW Patrick Kane and D Duncan Keith. The team "will have to choose between losing one of those three to an offer sheet, or trading Patrick Sharp, Dave Bolland or Brent Seabrook, none a good option" (N.Y. POST, 7/12).

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