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SBD/Issue 121/FranchisesPrint All
Latest Delay In Rangers Sale Means Deal
Is Unlikely To Close By Opening Day
The sale of the Rangers stalled last week "after MLB informed the team's creditors that there would be delays in responding to the lenders' concerns" about the deal, according to sources cited by Daniel Kaplan of SPORTSBUSINESS JOURNAL. The sources said that the developments "serve as a challenge to would-be buyer Chuck Greenberg's stated goal of having the transaction closed by Opening Day, if it can close at all." Greenberg reached a formal agreement earlier this year to buy the club from Tom Hicks. But creditors are "unhappy with the structure" of the proposed $570M deal because only $230M "would flow to the lenders, according to terms of the initial deal submitted to them in late January." The creditors are looking for at least $300M. Kaplan notes MLB, "acting as intermediary between the creditors" and Hicks Sports Group, was "scheduled to respond by Feb. 26 to their demand for more cash." Sources indicated that the league last Monday informed the lenders that there were "delays but did not offer details for why the delays were happening." Still, Greenberg is "moving on another front to get the deal done." Sources said that he has arranged a loan commitment from Bank of America for $140M to "help fund the deal in the event the creditors agree to it." One source noted that Greenberg plans to tap only $80M of that loan immediately, "leaving the remainder in reserve" (SPORTSBUSINESS JOURNAL, 3/8 issue). Greenberg said, "The way I see it, we are still on schedule for April 1. ... We've had delays, not of our making, but you deal with it and move on. Nothing yet has knocked us off the April 1 date" (FT. WORTH STAR-TELEGRAM, 3/7).
HICKS STILL CONFIDENT OF SALE: Hicks said that he "expects that the sale of the team will be completed, though he isn't sure when it will get done." Hicks: "It's very complicated. I think none of that will have any impact on the team. With the continuity of Nolan, I think it'll be business as usual" (FT. WORTH STAR-TELEGRAM, 3/6).
OFF TO A BETTER START: ESPN DALLAS' Richard Durrett reported the Rangers "sold more than 92,000 tickets on the first day of the individual ticket sales" on Saturday, an increase of more than 3% from the same day in '09 (ESPNDALLAS.com, 3/6).
Vinik Meets With Media
To Discuss Lightning
New Lightning Owner Jeff Vinik during his first appearance in front of the local media on Friday attempted to "put distance between himself and the previous owners, who had serious financial problems and characterized themselves as owner-operators," according to Damian Cristodero of the ST. PETERSBURG TIMES. Vinik said, "This franchise is not going to be restrained by financial resources. You don't want me running the team on a day-to-day basis. You want a terrific, professional CEO doing that." He addressed the media and a small group of fans on Friday in "front of a banner with the team's new marketing tag line: Bring It Back." Vinik said that the "it" referred to the "passion with which the area embraced the team when it won the 2004 Stanley Cup." The team's season-ticket renewal brochure "even has several pictures of the Cup, references to which the team has downplayed the past two seasons." NHL Commissioner Gary Bettman introduced Vinik, "something he did not do in June 2008 for previous owners Oren Koules and Len Barrie." Bettman said, "This owner has the resources, the ability and the commitment. This franchise is on stable, strong footing." Vinik said he currently is searching for a "CEO to 'preside over the organization' and conduct a top-to-bottom evaluation." He said that he has "no timetable except to make the hire as soon as possible." Vinik noted that the hire "won't necessarily be a hockey guy, but someone with 'great business experience'" (ST. PETERSBURG TIMES, 3/6).
GETTING OFF ON THE RIGHT FOOT: In St. Petersburg, John Romano wrote it is "probably fair to say Jeff Vinik did not make hearts flutter or pulses race in his first appearance as the new owner of the Lightning." He seemed "a little shy" and "a little reserved." However, he seemed "sturdy and serious," leading a franchise in "desperate need of a father figure." Bettman stressed to fans, "Don't rush to judgment on him. Let him do it the right way." Vinik and Bettman both reiterated that the Lightning "will stay in Tampa Bay," and they "left no room for equivocation." Vinik's family "will remain in Boston, where his children are in school, but Vinik said he will buy a home in Tampa and spend much of the season in town." Romano noted Vinik seems to have "zero debt on the franchise, and that is going to have a dramatic impact on the way things are run." Vinik: "I wouldn't have bought this team if I didn't think it could be successful in every way" (ST. PETERSBURG TIMES, 3/6). Also in St. Petersburg, Gary Shelton wrote Vinik has "some small shoes to fill," because the Tampa Bay area's team owners are "competing for the title of worst owner ever." Shelton ranks the region's sports owners from best to worst (ST. PETERSBURG TIMES, 3/7).
Heisley Says He Would Like To See
More Support From Fans In Memphis
The Grizzlies at 32-31 through Sunday are "above .500 this late in the season for the first time" since '06, and "no one is happier than the franchise's self-proclaimed biggest fan," Owner Michael Heisley, according to Ronald Tillery of the Memphis COMMERCIAL APPEAL. Heisley would be the "first to tell you that the Griz are far from a finished product." But he said, "This has been the most fun I've had since I've owned the Grizzlies." Heisley in a wide-ranging Q&A said that he wanted to talk about "people coming out and supporting this team." Heisley: "I'd like to see people paying $5 to see the games. I'd like to see people spend less than what they spend for a movie to come see one of the better up-and-coming teams in the NBA. I heard it for years that we aren't very good. Well, they can't say that now and there's no big rush through the turnstile. That's what I'm disappointed about." He added, "People say are you going to pay Rudy Gay? My answer to them is simply are you going to come to the games? If I can't get people to come to the games I can't pay anybody." The 73-year-old Heisley reiterated his family is "not going to take over" the Grizzlies. Heisley: "If the right person makes a reasonable offer for the team I will sell it. If the minority (local) owners want to come up with a reasonable offer, I would love to sell it to them. ... Quite frankly, I don't have to sell this team. I'm not in any financial difficulty." When asked if he would sell the club to a buyer intending to move it, Heisley said, "There is a contract that holds the Grizzlies into Memphis for 17 years. People should get off of this. I can't move it tomorrow. It's like talking about something that cannot be. All people have to do is read the contract. ... The NBA wouldn't let it happen" (Memphis COMMERCIAL APPEAL, 3/8).
NOT THE RIGHT FIT: In Memphis, Geoff Calkins writes Heisley is "charming, accessible and wonderfully blunt," but he "doesn't know how to build a successful NBA franchise in this town." The Grizzlies sold about 5,500 season-ticket equivalents this season at FedExForum, down from roughly 11,000 for the '04 campaign. Calkins: "In other words, Heisley and the Grizzlies drove away half of their season-ticket holders. They did it by losing too many games and by failing to connect with the greater community, especially the parts of the community that could do them the most good." The city needs an NBA owner who "understands how to make things work" locally, and Heisley, "for all his good intentions, is never going to be that guy" (Memphis COMMERCIAL APPEAL, 3/8).
Johnson's (l) Losses Included
About $30M From '08-09 Season
Bobcats Owner Bob Johnson absorbed roughly $80M in “operating losses over the course of his NBA investment," which in part drove him to sell the team to Michael Jordan, according to John Lombardo of SPORTSBUSINESS JOURNAL. A source indicated that the Bobcats have suffered about $100M in operating losses since Johnson bought the club for $300M in ’03. Johnson’s ownership stake was about 80% “at the time of the sale, up from” 65% when he first acquired the team. The Bobcats lost about $30M during the ’08-09 season, and as “losses mounted, Johnson assumed more ownership as some partners diluted their shares instead of funding capital calls.” SportsCorp President Marc Ganis said, “It used to be that you’d never lose money on a sports team because you could make it up on the sale. That conventional wisdom is no longer the case” (SPORTSBUSINESS JOURNAL, 3/8 issue). The NBA placed the sale price of the franchise between $275-290M. In N.Y., Mitch Lawrence cited a source who placed the sale “in the mid-200 million to high-200 million” dollar range. The source said, “Bob lost money on the deal. He knew he would, but he felt it was time to move on. He had his fun.” Lawrence wrote Jordan “needs to show he’ll pour money into the operation, but also has to be willing to put in the long hours required to keep the franchise going in the right direction.” An NBA exec said, “Will he have the commitment to do it? That’s always the question with him” (N.Y. DAILY NEWS, 3/7).
HIGH HOPES: In Charlotte, Erik Spanberg noted several current Bobcats minority investors are high on Jordan’s “ability to transform himself into a first-rate owner.” They said that Jordan “represents a rare second chance for the Bobcats to make a first impression.” Because of the “significant financial commitment buying a franchise requires ... the hope among many is that the retired NBA star will be motivated to make the Bobcats his first priority.” Charlotte-based Private Sports Consulting Principal Max Muhleman: “Michael has been very conservative in his investments in the past. He’s sticking his neck out with this one. Owning a pro sports team is unlike any other business anyone, even Michael, will ever be involved in.” NFL Panthers investor Johnny Harris said, “There’s a different feeling about Michael than there was about Bob. And I think there’s a different understanding of Charlotte and the Carolinas from Michael than Bob had. He’s one of ours” (CHARLOTTE BUSINESS JOURNAL, 3/5 issue).
CAN JORDAN SUCCEED? In L.A., Mark Heisler wrote under the header, “Michael Jordan Doesn’t Show Signs Of Changing.” Jordan “lives to do things on his terms.” He still makes “millions, emerging long enough to shoot commercials with wide-eyed Charlie Sheen or Cuba Gooding Jr., but no one is smart enough to run an NBA team, or anything else, that way.” Heisler: “Now his money will flow and his name will sit atop the directory, but until it’s a mission to him, as it is to his rivals, Mike’s just a narcissist in a tower” (L.A. TIMES, 3/7). In Charlotte, Rick Bonnell noted Jordan "lives to win," but he is "unused to bearing the cost of winning." There is "not much the Bobcats can do to better themselves that wouldn't involve flirting with paying the luxury tax." But Jordan has "said repeatedly he can't justify paying the tax in this market, with this team" (CHARLOTTE OBSERVER, 3/7).
McCourt Does Not Feel Need To
Address Team's Finances
Dodgers Owner Frank McCourt Saturday spoke to a group of reporters for almost 11 minutes, but he "would not talk about the documents in recent filings that detailed the club's plans to keep its payroll below what it was last year through 2018 while nearly doubling ticket prices," according to Dylan Hernandez of the L.A. TIMES. McCourt also did not answer "why two of his sons drew a combined annual salary of $600,000 from the Dodgers, even though one works at Goldman Sachs and another attends graduate school at Stanford." McCourt said that he "disagreed with the notion that he should respond to these reports because they affected the Dodgers' paying customers." McCourt: "It's just really impossible to try and deal with allegations and things like that and deal with every one of them because it's an endless process." Hernandez noted McCourt "would not comment about the revelations in court papers filed by his estranged wife that the couple did not pay any income taxes from 2004 through 2009." Although Dodgers President Dennis Mannion "now oversees the day-to-day operations" of the team, McCourt said that he "still has the final say on major decisions" (L.A. TIMES, 3/7). McCourt: "I think fans want to focus on baseball. They want us to win a world championship and that's our focus." McCourt noted that an "estimated 3,500 fans showed up at Dodger Stadium in the rain Saturday for the first day of individual ticket sales." Opening Day "sold out in 10 minutes." McCourt: "We're doing very well" (MLB.com, 3/6).
RISING COSTS: In L.A., Bill Shaikin noted Frank and Jamie McCourt's divorce "could become one of the costliest splits in California history, with attorneys and accountants commanding as much as $19[M] in fees -- more than the Dodgers will spend on their starting infield this season." Court filings indicated that Frank has estimated his "divorce-related expenses" at $5-10M, while Jamie has estimated her expenses at $9M -- and she has "asked that her estranged husband be ordered to pay them." Frank McCourt's attorney Marshall Grossman said that fans "should not be concerned that the high cost of the divorce would affect player payroll decisions" (L.A. TIMES, 3/6).
The Red Sox have agreed to opt into MLBAM's league-wide secondary ticketing deal with StubHub after more than two years of refusing to participate. The club will also retain its offline sponsorship deal with Boston-based broker Ace Ticket that is now in third year, was recently renewed, and allows for signage at Fenway Park and use of Red Sox marks. The StubHub integration, meanwhile, will be online-only, and for now, just for the '10 season. The Red Sox had been the lone team to not opt into the MLBAM-StubHub deal, which includes a far greater degree of integration than many other sponsorship-oriented pacts between leagues and secondary ticketing firms. "We continued to take a wait-and-see attitude with regard to secondary ticket and wanted to be very cautious. But it seems like this [StubHub] platform offers a great convenience, and we're going to see how this goes," said Red Sox COO Sam Kennedy. "So we've broken up the category in which Ace is strictly offline and StubHub is strictly online, which we think is rather unique. But Boston is also very unique market for secondary tickets."
Vikings Owner Zygi Wilf said that the loss of RB Chester Taylor and G Artis Hicks in free agency had "nothing to do with any effort to cut down spending on players to make this team a winner." Wilf: "Our actions of the last several years have spoken larger than words. We spend when it's appropriate. ... When we want somebody, we go after them...When the opportunity arises and when the time comes, we will go out and get that person, but right now we're really working on the draft." Meanwhile, Wilf said that he is "hopeful that the Legislature will find a way to get a Vikings stadium bill passed this year." Wilf: "I think there's a way to get this thing done this year, so I'm excited on that front" (Minneapolis STAR TRIBUNE, 3/8).
EXTENDED RESPONSIBILITES: In N.Y., Ken Belson noted the NHL "rarely meddles in the teams' day-to-day operations," but as the current owner of the Coyotes, a team of league execs has used the "opportunity to help improve the franchise's marketing, ticketing and accounting." The NHL "receives weekly budget updates, approves major purchases and fills budgetary gaps" for the Coyotes, and NHL Commissioner Gary Bettman and other league officials "also hold town hall-style meetings to try to assure the local community that its team is not moving despite its financial uncertainty." NHL VP/Ticketing Strategy Jeff Morander is "helping the Coyotes develop a business plan for next season that can be passed on to the new owners" (N.Y. TIMES, 3/6).
Bird Feels Pacers Have Smaller
Room For Error As Small-Market Team
PICKING UP THE PACE: In Boston, Gary Washburn wrote the Pacers are an "NBA afterthought, a small-market franchise that disappeared from the landscape" following the brawl with the Pistons in November '04. Pacers President of Basketball Operations Larry Bird has been "trying to make the Pacers matter again." Bird: "It's been tough, but it's part of the process. We had to get rid of some of the players and rebuild. We knew it was going to be tough, and it is." More Bird: "We don't have as much room for error as the bigger-market teams. We just feel like we haven't gotten the break we need yet, and once we catch that, we have to take advantage of it" (BOSTON GLOBE, 3/7).
TICKET HIKE: The Steelers for the fourth time in six seasons are "raising ticket prices." A ticket that cost $85 last season "will cost $92 for the 2010 season." The Steelers in a letter to ticket holders said the increase was so the team could "continue to meet the challenges of remaining competitive" in the NFL (Pittsburgh TRIBUNE-REVIEW, 3/7).