SBD/Issue 100/Franchises

Hicks Retains Galatioto Sports Partners To Study Sale Of Stars

Stars Owner Has Said He Will Consider
Selling Stake Of Team Or Entire Team
Hicks Sports Group Thursday announced that it has retained Galatioto Sports Partners to "study the sale of the Stars," according to Mike Heika of the DALLAS MORNING NEWS. Stars Owner Tom Hicks in a statement noted that he will "consider selling a minority stake, a majority stake or the entire team." Stars President Jeff Cogen said, "While a sale is not a certainty, it is a possibility, and Mr. Hicks has received numerous inquiries about the team." Hicks, who bought the NHL team for $84M in '95, has been "battling financial problems and is addressing more than 40 lenders" to whom HSG defaulted on $525M in loans last March. The ownership's financial problems this season "caused the Stars to lower their payroll" from $56M to $45M, and Hicks recently said that he has been "addressing cash flow issues with the team." Hicks in an e-mail said, "With the separation and pending sale of the Rangers, the Stars have seasonal cash flow needs that are being advanced from time to time by our lenders. We are working closely with the NHL and our lenders to examine all of our alternatives." Cogen Thursday sent a letter to ticket holders saying that the "discussion of a sale would not affect the Stars' performance on the ice." When asked about his interest in acquiring the team, Mavericks Owner Mark Cuban in an e-mail said, "I've talked to some folks about playing a small role in the purchase. Won't look into buying the team" (DALLAS MORNING NEWS, 2/5).

LINE CHANGE: Cogen Thursday said that he "envisions Hicks finding additional investors or selling his stake in the club by the beginning of next season." The Hockey News cited a source as saying that the CIT group, one of HSG's lenders, is "forcing Hicks to sell the club" (ESPNDALLAS.com, 2/4). The GLOBE & MAIL's David Shoalts cites an NHL source as saying that there are "four parties seriously interested in buying" the Stars -- one from the Dallas area and three "thought to be Canadian businessmen." One of the interested parties is Calgary-based Avenir Capital Corporation President Bill Gallacher, who "was in contact" with NHL Commissioner Gary Bettman "months ago and expressed his interest in the Stars." Shoalts notes the Stars will "fetch a much higher price than the Lightning," who reportedly are on the verge of being sold for about $170M to Jeffrey Vinik. The Stars "come with a half interest in an arena that makes a lot of money and they are in one of the largest markets in the United States, one that has shown it will support a decent team." A source indicated that the asking price will be greater than $300M (GLOBE & MAIL, 2/5).

CHANGE WILL DO YOU GOOD? In Dallas, Tim Cowlishaw writes Hicks selling the Stars can be "only good for Stars fans." With new ownership, the team "will be able to spend to the cap again and make off-ice decisions that aren't governed by Hicks' defaulting on loans for the Liverpool club." Hicks' financial woes have made him "powerless to help a struggling team today" (DALLAS MORNING NEWS, 2/5). However, ESPNDALLAS' Richard Durrett wrote, "Say what you want about Hicks, but he's been a good owner overall for the Stars. He spent big bucks to get key players and the Stars won a Stanley Cup on his watch. Missing the playoffs last year and not spending money this season can cloud the big picture. Overall, I think he's been good for this franchise" (ESPNDALLAS.com, 2/4).

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