SBD/Issue 235/Franchises

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  • Atlanta Spirit Hires Goldman Sachs To Search For Investors

    Atlanta Spirit Owners Have Suffered
    $20M In Annual Losses Since '05
    Hawks and Thrashers ownership group Atlanta Spirit has "retained Goldman Sachs to bring in outside investors after suffering" $20M in annual losses since '05, according to John Lombardo of SPORTSBUSINESS JOURNAL. Atlanta Spirit co-Owner Michael Gearon Jr. confirmed that the group has hired Goldman "primarily to bring in minority investors and to financially restructure the team's ownership of the two teams and operating rights" of Philips Arena. Gearon: "We went to Goldman and asked them to handle this. ... We're really trying to evaluate everything and see what makes sense. We're going to look at any opportunity that presents itself and try to make a smart financial decision." Gearon said that the group has "no plans to sell the franchises, but he did not discount selling either team if the price is right." Gearon: "If someone comes at us with a crazy price, then you'd have to consider (selling). But that hasn't been the goal in working with Goldman." Lombardo noted the eight-member ownership group since '05 has been "shouldering steep operating losses reaching nearly" $100M. Though Gearon said that he "expects operating losses to slow," the group also has incurred some $15M in "legal costs related to its court battle with" estranged co-Owner Steve Belkin (SPORTSBUSINESS JOURNAL, 8/24 issue).

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  • Court Filings Show Ricketts Pushed Tribune Co. For Cubs Deal

    Judge Has Agreed To Expedite
    Procedures Regarding Cubs Sale
    The Ricketts family in late July "gave Tribune Co. a deadline of Aug. 7 to finalize terms" for a sale of the Cubs, and the company said that it "would try to meet that time frame but also continued to negotiate" with a group led by Clarion Capital Partners LLC Managing Partner Marc Utay, according to court documents cited by Ameet Sachdev of the CHICAGO TRIBUNE. Details of the negotiations are "contained in hundreds of court documents" Tribune filed yesterday in bankruptcy court in connection with the company's agreement to sell 95% of the Cubs, Wrigley Field and related assets to the Ricketts family for about $800M. Tribune lawyers in the court filings "outlined a two-step process for court approval, which includes having the team file for bankruptcy at a later date." The company wants the Cubs to be "in bankruptcy for just a few days," as Cubs Chair Crane Kenney in court documents argues that an "extended stay in court could damage the Cubs' baseball operations." The judge presiding over the case agreed to "expedite procedures regarding the sale," and an "initial hearing is scheduled for Monday." Documents also indicate that Tribune "faces paying the Ricketts family" a $20M fee if the deal does not close in Q4 of this year. The filings confirmed that WGN will retain broadcast rights to "certain Cubs games on radio and television" through the '22 season (CHICAGO TRIBUNE, 8/25).

    WITH THE WIND: SI.com's Jon Heyman wrote we "can't be sure how the Ricketts family will do with the Cubs," but it has "got to be better" than Tribune Chair Sam Zell. The Cubs' front office was "hamstrung this summer by their ownership situation." Zell "isn't responsible for the previous 100 years of failure, but this one is on him" (SI.com, 8/24). In Chicago, Carol Slezak writes if Tom Ricketts "really wants to build a winner, there's a readily available blueprint he can follow" with the White Sox. Slezak: "Tribune Co. never figured out how to build a franchise that could be competitive for the long term. They never put a system in place. They never learned how to win." But the White Sox "figured it out," and Ricketts "could do far worse than to follow their lead" (CHICAGO SUN-TIMES, 8/25).

    BASEBALL SENSE:  ESPN.com's Gene Wojciechowski in an open letter to the Ricketts family wrote, "This isn't just any team you're purchasing. ... What it doesn't need is an owner who thinks of the Cubs as simply an investment, another expensive car to park in the portfolio garage. It needs someone who has business and baseball sense." The Cubs should not "pink slip" GM Jim Hendry, and if Kenny is "going to stay, he has to quit with the jock-sniffing." Wojciechowski: "He's the chairman, not the clubbie. Someone needs to tell him he's not a player and that this isn't fantasy camp" (ESPN.com, 8/24). In Illinois, Bruce Miles notes Hendry "probably is safe for next year" because the team "won't change hands until November, at the earliest, and the Cubs' organizational meetings and the GM meetings will have taken place by then." But the Ricketts family should "hire a baseball man to be team president." While former Padres CEO Sandy Alderson's name "has been out there," Braves President John Schuerholz and former Phillies GM Pat Gillick are "no-nonsense men who built champions" (Illinois DAILY HERALD, 8/25).

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  • Hurricanes Hire IDeaS To Analyze Team's Ticket Sales Data

    IDeaS Concludes Hurricanes Can Boost
    Ticket Revenue By 4.5% With Better Pricing
    The Hurricanes hired Minneapolis-based software analysis company IDeaS to "analyze ticket sales data" and recommend how the team can "increase revenue from home games at the RBC Center," according to David Ranii of the Raleigh NEWS & OBSERVER. IDeaS, which was acquired by North Carolina-based software company SAS last year, concluded that the Hurricanes "could have boosted ticket revenue by 4.5[%] with better pricing." Hurricanes Dir of Ticket Operations Bill Nowicki said that team officials are "formulating plans based on that analysis and intend to announce promotions for single-ticket sales sometime around Labor Day." Nowicki added that fans "can expect longer lead times for some promotions and more of a focus on targeted audiences than in the past." Hurricanes President & GM Jim Rutherford said that he is "optimistic that IDeaS' analysis will lead to more ticket sales over the long term, although sales for the coming season present an extra challenge because of the ailing economy." Ranii noted the Hurricanes are IDeas' "first sports client," and IDeas Senior VP Joseph Martino said that the company is "contemplating developing a software-as-a-service offering for other sports teams based on the insights gained working with" the franchise (Raleigh NEWS & OBSERVER, 8/22).

    EXPLORING THEIR OPTIONS: In Columbus, Bill Bush reported the Columbus Chamber of Commerce (CCOC) is "commissioning a study of how to make the Blue Jackets economically viable after the team failed to get Franklin County to buy Nationwide Arena." The study, which will be conducted by Ohio State Univ. professor emeritus of finance Steven Buser and could be completed by early fall, will not "specifically focus on who should own and operate Nationwide Arena, or whether a 'sin tax' on alcohol and cigarettes should be involved, as the team had proposed." Instead, CCOC President & CEO Ty Marsh said that the study will "merely list 'credible and viable' options, both public and private, that could help the Blue Jackets turn a profit." Marsh "would not disclose the cost of the study" (COLUMBUS DISPATCH, 8/22).

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  • Red Bull Struggling With MLS Club Three Years After Investment

    Red Bull Still Trying To Find
    Right Way To Operate Franchise
    The MLS Red Bulls are "threatening to be the worst" team in league history, and Austria-based Red Bull is "still trying to find the right way" to operate the franchise, according to Ives Galarcep of ESPN SOCCERNET. Since buying the MLS club in '06, Red Bull has made a "series of mistakes that ultimately helped lead the Red Bulls to this point in their brief and disappointing history." But Red Bulls Managing Dir Erik Stover contends the organization has "invested in a number of things to improve the franchise for the long term." Stover pointed to the "club's improvements under Red Bull, from the securing of a temporary practice facility, to the investment in Juan Pablo Angel as a designated player and to the construction of Red Bull Arena," set to open next season. Stover argues that "investment in its player development academy (considered one of the best in MLS) and the doubling of its season-ticket base is further evidence" that the club, "at least off the field, is headed in the right direction." Stover: "Red Bull has committed the resources to make the organization successful." However, Galarcep noted whether the team "avoids repeating its early mistakes will depend largely" on Stover, who came into his position in '08 with "no sports team management experience." Stover has "helped clean up the mess that the team's business side had become, but his most important task lies ahead." Whether Stover and the Red Bulls "succeed will be decided in their selection of the next men to run the soccer operations"  (ESPNSOCCERNET.com, 8/22).

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  • Franchise Notes

    In Cincinnati, Steve Watkins reports the Bengals' "season ticket sales are falling, and a more than five-year streak of sellouts" at Paul Brown Stadium "is in jeopardy." The Bengals this year sold single-game tickets, the first time since '04 the team has "sold anything other than season tickets." The team "had a waiting list for season tickets, but those people have now had their chance and there's still a shortfall." Bengals Dir of Sales & Public Affairs Jeff Berding said there are a "couple thousand tickets (per game) still available." Berding also noted that the team has a "few suites available for the first time in about five years" (BUSINESS COURIER OF CINCINNATI, 8/21 issue).

    THE POWER OF CHEESE: The Packers and Verizon Wireless have reached a five-year extension of their partnership through '13, under which the company will continue as the official wireless service provider for the team and Lambeau Field. Verizon will maintain its gate sponsorship at Lambeau, and also will gain prominent signage throughout the stadium. Verizon retains exclusive rights to the Packers' team marks for both permanent and non-permanent POS advertising materials (Packers).

    Falcons-Themed Boeing 747 Part Of AirTran
    Airways, Falcons' Multi-Year Partnership
    GEORGIA ON MY MIND: AirTran Airways has reached a multi-year partnership with the Falcons. The deal includes joint promotions, prominent signage at the Georgia Dome, and a Falcons-themed Boeing 747. In addition, AirTran will use Falcons players for billboards and other advertising. AirTran already has partnerships with several Falcons players, including QB Matt Ryan. The airline's principal hub is at Hartsfield-Jackson Atlanta Int'l Airport (AirTran Airways).

    THE DEVILS MADE ME DO IT: A Newark STAR-LEDGER editorial stated the Devils' newest billboard ad campaign is the "latest gotcha in an intramural feud with the Nets," who "deserved the dig." The Nets this season are removing "New Jersey" from their road uniforms, and the Devils' billboard reads in part, "We proudly wear our state on our jerseys." The editorial stated while New Jersey "pours millions of tax dollars into Izod Center to prop it up for the Nets, the NBA team repays the state with disrespect" (Newark STAR-LEDGER, 8/24).

    rockets in flight: In Houston, Richard Justice ranked the Rockets as the "smartest professional sports franchise" in the city. Rockets GM Daryl Morey is the "smartest guy in town by miles," and Owner Les Alexander's "passion and commitment to winning make him the best owner by miles." Justice ranked the Texans No. 2, as Owner Bob McNair is the "blueprint for what an owner should be," while the Astros are No. 3, as Owner Drayton McLane sometimes "seems more interested in talking about being good instead of being good" (CHRON.com, 8/24).

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