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SBD/February 1, 2011/FranchisesPrint All
The Wilpons are "in a much tighter squeeze than they are letting on," and they "may be forced to sell a controlling stake" in the Mets, according to sources cited by Josh Kosman of the N.Y. POST. A source said that Mets Owner Fred Wilpon and his ownership team "have been shopping a minority stake ... to Wall Street titans and other deep-pocketed investors for at least three months." Wilpon Friday said that he is "seeking to sell a 20 to 25 percent stake" in the team, "implying that the process had just begun." But sources said that the process "has been going on for months." Sterling Equities, a holding company belonging to the Wilpons and team President Saul Katz, has a 60% stake in SportsNet N.Y. that "could be worth hundreds of millions," but sources said that it "cannot be used to attract minority investors to the team." Sources said that Sterling "would have to distribute any proceeds from the sale of its SNY stake to lenders under the terms of their credit agreement." Also, one source said that Sterling "cannot borrow any more against the team or SNY under the loan agreements." Kosman notes the Wilpons, "looking to raise several hundred million but hemmed in by debt," may be "forced to sell a larger stake than they wish" (N.Y. POST, 2/1). SportsCorp President Marc Ganis said that he "learned several months ago that the Mets approached three 'very wealthy people' in financial services and real estate." Ganis added that "none agreed to terms, one because he was not interested unless the deal included a path to a controlling interest." On Long Island, Jim Baumbach notes Glaceau co-Founder Mike Repole "has been a Mets season-ticket holder since 1997 and is 'intrigued' by the thought of becoming a part-owner." But he stressed that "any potential deal must make sense to both parties" (NEWSDAY, 2/1). The WALL STREET JOURNAL's Matthew Futterman reports "several bankers and lawyers who specialize in sports transactions said they had fielded numerous calls from individuals seeking more information about a potential deal." But "sorting out the contenders from the pretenders may prove to be the first big challenge" (WALL STREET JOURNAL, 2/1).
SETTING THE RECORD STRAIGHT: In Atlanta, Ernie Suggs reports Martin Luther King III, the son of the late civil-rights leader, "set the record straight" yesterday about his reported interest in a Mets stake. King: "For this to be released to the press is way premature. We haven't signed any agreement." King said that the "notion of owning the Mets began as a simple phone call but quickly grew into a media swirl." He noted that on Saturday morning he "received a call" from Vobile President of Cable & Sports Larry Meli, "who introduced the idea." King: "He asked me if I would want to be part of the ownership of a National League baseball team. I told him that it was something I would need to explore." Suggs notes the story was "picked up by several media outlets, some of which reported that King was leading a group of investors." King: "Larry gave me a lot of information that led to the impression that I was leading an effort. First, that is not accurate. What is accurate is that there has been a discussion. But there is no deal on the table and I am not leading an effort." King added that a "deal to be part of the group to purchase the Mets is not 'off the table,' but he is still trying to grasp the possibilities." King: "I am still in the exploratory phase" (ATLANTA CONSTITUTION, 2/1). In N.Y., Thompson, Vinton & O'Keeffe report King "made it clear that he is not leading the effort and Monday, King's potential partners were already downplaying his involvement in a group that hopes to buy 50% or more of the franchise." Meli: "He's not a deep-pocket financial guy. In his mind, he's not even the lead guy. But given his reputation and legacy, his name has percolated to the surface." A source close to King's group said that the investors are "expected to invite a former 'iconic' New York athlete to join the group." King's group already includes Meli, entrepreneur Donn Clendenon Jr. and former Mets 1B Ed Kranepool (N.Y. DAILY NEWS, 2/1).
NO QUICK FIX: On Long Island, Neil Best writes, "By going public Friday with the precariousness of their finances, the Mets left many fans concerned and confused, and they ensured a dark cloud will hang over the team as it begins spring training this month." It is "too soon to say" when the cloud might lift, but experts "doubt it will be anytime soon." Joel Evans, a professor at Hofstra Univ.'s Zarb School of Business, said that it is "not as simple as having a deep-pocketed business or individual write a $200-million check by the end of the week and being done with it." Prospective buyers "will want to assess the team's true value and not simply accept Forbes' much-quoted figure" of $858M. They also "likely will want to move the Mets off their position that SNY is off the table." A sale "would have to be approved" by MLB. New York Univ. sports management professor Robert Boland: "These transactions are usually six to 12 months." But he added that MLB "might expedite the process, especially for a non-controlling shareholder" (NEWSDAY, 2/1).
COURT REPORT: In N.Y., Thompson & Vinton report attorneys representing Mets ownership filed a motion in U.S. Bankruptcy Court yesterday alleging that the owners are "victims of 'significant leaks' and 'attempted character assassination' by Irving Picard, the trustee suing the Mets owners to retrieve money they might have made in Bernie Madoff's vast Ponzi scheme." The attorneys are "urging the judge in the case to keep Picard's lawsuit under seal, at least while settlement talks are ongoing, despite what they called the disclosure of confidential information from the lawsuit to the media." Picard "filed suit late last year against Fred Wilpon and Saul Katz and a constellation of businesses they run, including Sterling Equities." Picard "filed a motion late Monday, telling Judge Burton Lifland that he doesn't oppose a motion by media outlets seeking to unseal the lawsuit, which Picard filed on Dec. 7 of last year." A hearing on the unsealing motion is "scheduled for Feb. 9" in N.Y. (N.Y. DAILY NEWS, 2/1).
MEETING WITH THE COMMISH: On Long Island, Baumbach & Martin cite an MLB official as saying that Commissioner Bud Selig is "scheduled to meet with the Wilpons while he is in New York City this week." Upon "arriving in the metropolitan area late yesterday afternoon, Selig declined to weigh in on the Wilpons' financial state." Selig "has remained mum since the Wilpons made the surprising announcement Friday that they are willing to sell" 20-25% of the Mets. Selig and Fred Wilpon "have been close friends for years, a relationship that grew" while Selig owned the Brewers and Wilpon owned the Mets. The MLB official said that the Wilpons' meeting with Selig "already was scheduled before the Wilpons' announcement Friday" (NEWSDAY, 2/1).
Mets GM Sandy Alderson yesterday insisted that "the Wilpons' messy entanglement with Bernie Madoff would not have an impact on how he does his job going forward," though he did note that the team plans to "lower payroll in the future," according to Dan Martin of the N.Y. POST. Alderson on a conference call said, "Our payroll going into the season will be somewhere between $140 million and $150 million. I think that is significantly higher than we'd like to be on an annual basis." Alderson asserted that his plan for the Mets' roster "will not be dictated by last week's news that the Wilpons are looking to sell a share of the franchise." He added, "The plan and the approach that I've taken over the last two months has not been affected at all by any other outside factors. ... I want to emphasize that the plan that we have pursued the last couple of months was limited by only one fact, and that was the level of the existing payroll" (N.Y. POST, 2/1). Alderson said that he was "not aware of the severity of the club's financial problems when he interviewed for the general manager's job in October." Alderson: "I wasn't privy to all the detail, nor am I, or most of us at this point, privy to all that detail, and I wouldn't expect to be. ... Would it have changed my position? I don't think so" (NEWSDAY, 2/1). Alderson added, "If there was a financial problem before and it’s being addressed, that can only be positive from my standpoint" (Newark STAR-LEDGER, 2/1).
A LOOK INTO THE FUTURE: The N.Y. POST's Martin notes financial "uncertainty could have a bearing on how agents treat the Mets in future negotiations." One MLB player agent said, "If they do have a money-crunch, how is that going to impact what they do? Do you have as good a chance to win there as you do somewhere else?" (N.Y. POST, 2/1). In Newark, Andy McCullough writes, "The Mets are rebuilding right now. That much is obvious. So, for Alderson, the reduction of payroll does not signal a move backward. It signals progress" (Newark STAR-LEDGER, 2/1). On Long Island, Anthony Rieber writes this situation is "one of the reasons the Mets hired Alderson -- to be the public face of the franchise when bad things happen." Rieber: "Listen to Alderson and you hear honesty. Integrity. Competence. Confidence. He could have ducked the questions or hid behind the phrase 'it's a legal matter' or flat-out lied. It's just not in his makeup" (NEWSDAY, 2/1). The WALL STREET JOURNAL's Brian Costa writes Alderson "did exactly what the Mets needed him to do, projecting a sense of calm and confidence amid the appearance of a dire situation" (WALL STREET JOURNAL, 2/1).
Tom Golisano "plans to announce Thursday he has sold" the Sabres to East Resources President & CEO Terry Pegula, and the deal is expected to mean "the departure of" Managing Partner & Minority Owner Larry Quinn, according to David Shoalts of the GLOBE & MAIL. The sale price is said to be $175M, plus another $14M in "financial liabilities Pegula will assume, which is not bad considering Golisano paid just a little more" than $60M for the Sabres in '03. Quinn, who will receive about $14M in the transaction, yesterday said that he "would like to stay involved in hockey, perhaps at the amateur level." He did "not have any choice in selling once Golisano decided to cash out his majority stake, as Pegula will bring in his own executives." Sabres COO & Minority Owner Dan DiPofi also is "expected to take his leave." Sabres GM Darcy Regier's long-term future "will be subject to a review of the team’s operations by Pegula, but it is certain he will be around to pare down the Sabres’ $54.9-million payroll" by the Feb. 28 trade deadline (GLOBE & MAIL, 2/1). In Buffalo, Mike Harrington reports the Sabres last fall gave a contract extension to Regier, who was "widely believed to be on his way out" once Golisano sold the franchise. Golisano gave Regier a two-year extension between $2-2.5M, a deal the team "never publicized." It has been "assumed all season Regier was in the final year of his deal" (BUFFALO NEWS, 2/1).
The Lightning yesterday unveiled a new logo and new home and road uniforms for the '11-12 season in a rebranding effort. The team will continue to wear its current logo and jerseys through the end of the '10-11 season, though the updated logo will immediately have a presence at St. Pete Times Forum. This marks the first time an NHL franchise has been allowed to phase in a new logo during the season. The Lightning also announced an innovation that will take effect with the new sweaters. Special jerseys reserved for season-ticket holders will have a microchip inserted into the sleeve, allowing those fans to be identified at in-arena concession stands and merchandise shops. By scanning the embedded sleeves, the fans will receive a 25% discount on all concessions and a 35% discount on all merchandise at St. Pete Times Forum (THE DAILY). The “highlights of the jersey, which will not immediately be on sale, include the removal of the words ‘Tampa Bay’ from the home blue jersey, the ties at the front of the collar and elimination of the color black, associated with the team from its inception, in favor of a blue-and-white combination to denote water and lightning.” The team will “retain its third jersey” (ST. PETERSBURG TIMES, 2/1).
BACK IN A FLASH: In St. Petersburg, Jeff Harrington notes the new uniforms, “new logo and some rebranding cost close” to $1M. Add in the jerseys the team is giving away to “thousands of full season ticket holders (at about $150 apiece) along with heavy concession and merchandise discounts at games, and the price tag escalates quickly.” The team today also is expected to announce “a major charitable contribution at Metropolitan Ministries.” The club tomorrow will “reveal more plans for an estimated” $40M renovation to St. Pete Times Forum. Hillsborough County documents indicate that the team “wants to be reimbursed for much of the expense using tourist taxes," but Lightning officials indicate that Owner Jeff Vinik is “prepared to move forward with or without the pledge of financial support.” Harrington writes, “Put the spending spree together -- along with $5 million Vinik & Co. already spent on Forum improvements -- and it looks like a long-term commitment to the Lightning.” Vinik still “won't say how much he'll invest or how long he's willing to wait to turn a profit.” But Lightning CEO & Minority Owner Tod Leiweke said the money spent on the uniform and logos alone "is not for the faint of heart." Leiweke's "yardstick of success is a visual one." He “wants the inside of the Times Forum to look like it did during the Lightning's Stanley Cup championship season” in ’04 (ST. PETERSBURG TIMES, 2/1).
The Senators will host the NHL All-Star Game next season, and the game will be a "centrepiece of the Senators' 20th anniversary celebration," according to Bruce Garrioch of the OTTAWA SUN. The event also will "play a key role in the Senators' campaign to sell season tickets for 2011-12." With the team in 13th place in the Eastern Conference, Senators President Cyril Leeder is "aware he's got his challenge." He noted that he is "always concerned about ticket sales, but the support has been strong this season and he's going to try to keep it from dipping down the stretch of what's become a lost season." Leeder: "I always have to worry about selling tickets. That's my job. Even the year we sold out 38 games, I still was worried about how we sell out the other three. It's always important for us to work on how we're going to sell tickets." Garrioch noted Leeder and a contingent of Senators officials attended the NHL All-Star Weekend in Raleigh to "get an idea of what they'll have to deal with next year." Leeder: "You always try to be better than the guys before you, so you're down here trying to get some ideas. You want to see what's working, how you can improve things and looking at the different venues." Leeder said that he "expects the new wrinkle of the player draft ... will be kept next season." He "isn't sure where it would be held in Ottawa, but liked the concept" (OTTAWA SUN, 1/30). Ottawa Tourism President Noel Buckley Friday said of the trip to Raleigh, "We want to see how the destination is holding the event, how the (Raleigh) convention centre and hotels are holding the event -- we're looking at this from a destination perspective." In Ottawa, Wayne Scanlan wrote All-Star Weekend is "hockey's biggest party of the year," and "if there is a model for the all-star party, the Ottawa hosts would like to pattern themselves after the Montreal all-star weekend in 2009 when a festive atmosphere seized downtown Montreal." One attraction that Raleigh "could not offer, but Ottawa will, weather permitting, is easy access to the world's largest outdoor skating rink" at the Rideau Canal, which is "just around the corner from major hotels and the new Convention Centre" (OTTAWA CITIZEN, 1/29).
LUCK NUMBER '13: In Nashville, Josh Cooper reported the Predators last week "would neither confirm nor deny they plan to bid" for the '13 All-Star Game, "the next one up for grabs." However, the "scheduled opening of the new downtown convention center that year and the Predators' aggressive push to bring more events to Bridgestone Arena could create a perfect storm that prompts a bid." Anaheim, Phoenix and Columbus "are the other cities in the 30-team NHL yet to host the all-star game." Bridgestone Arena "played host to the 2003 NHL Draft" (Nashville TENNESSEAN, 1/30).
The Red Sox yesterday conducted the "first NESN-televised Town Hall meeting," marking the "culmination of a listening tour Red Sox officials began last April in Hartford," according to Michael Vega of the BOSTON GLOBE. Last night, a "select group of 175 fans, comprised of longtime season ticket-holders, sponsors, and players from several local softball and baseball teams, was allowed to pose questions on a variety of topics" to a panel that included Red Sox Chair Tom Werner, President & CEO Larry Lucchino, Exec VP & GM Theo Epstein and manager Terry Francona. Vega notes before the Red Sox acquired Carl Crawford and Adrian Gonzalez this offseason, there "seemed to be a concern among Sox fans whether ownership had properly allocated its resources" after buying EPL club Liverpool. Werner: "Then after the two acquisitions that we made to stock our roster, those kind of comments were less in Boston, but more in Liverpool -- 'Now that you’ve spent tens of millions of dollars on players in Boston, what about us?' But we made some player moves today in Liverpool people on that side of the Atlantic are happy about." Lucchino stressed that he, along with the rest of the owners, is "fully focused on the Red Sox." He joked, "I burned my passport a few weeks ago." Lucchino noted that the ownership group, now in its 10th year, has "made investments totaling $285 million in the improvement of Fenway Park and indicated that this offseason was no different, citing the addition of three new high-definition video boards above the center-field bleachers and massive upgrades and renovations to the concourses near Gate D." He added, "People are going to be pleased. All the construction and improvements we have done through the years will ensure that Fenway is here for years and years to come" (BOSTON GLOBE, 2/1).
THE MORE THE MERRIER: Lucchino last night indicated that he "expects capacity to increase by roughly 100 seats to around 37,500 for night games, a few hundred fewer for day games." ESPN BOSTON's Gordon Edes noted the Red Sox "can sell anywhere from 500 to 1,500 standing room admissions." But Lucchino said that "capacity will be pegged around the 37,500 figure." In addition, he "expressed confidence that the team will extend its record consecutive sellout streak, saying the team has sold around 2.1 million tickets, but stressed that hundreds of thousands of tickets remain available" (ESPNBOSTON.com, 1/31). Werner said, "One of the things I hear all the time, and this is an example, ‘It’s tough to get tickets to Red Sox games.' We’ve had this policy of capping our season tickets at 20,000, so that families can come to an occasional game. I think if we wanted to, we could’ve capped our season tickets at a much higher number, but there are hundreds of thousands of tickets available and it’s important for us to communicate that kind of message" (BOSTON GLOBE, 2/1).
ESPN L.A.'s Arash Markazi writes Clippers F Blake Griffin is a "superstar the likes of which the league has rarely seen." He is the "kind of player the Clippers would have put beside Kobe Bryant and LeBron James in old advertisements to attract fans to buy tickets to watch the Clippers play the role of helpless bystanders to the leagues' best." Now "for the first time in the franchise's star-crossed history one of those truly great players is actually playing for them." The Clippers "no longer have to advertise packages for fans to see big-name players on other teams." If anything, "opposing teams are now seeing a sudden spike in attendance for Clippers games as fans in other cities are coming out to see Blake for themselves." Not only has Griffin "attracted sellout crowds to Clippers games, he's done something almost as unimaginable." He "has forced Los Angeles fans to arrive in time for the opening tip-off" (ESPNLA.com, 2/1).
HANGING IN THE BALANCE: In N.Y., Howard Beck notes Knicks President of Basketball Operations Donnie Walsh's contract "expires June 30, and he has received no indication from ownership that he will be retained." The team "has until April 30 to pick up Walsh's option for the 2011-12 season," and it would be "shocking if the Knicks let Walsh walk away." But Knicks Owner James Dolan is "famously unpredictable," and those inside and outside MSG are "unsure what his thoughts are regarding Walsh." The "ambiguity surrounding Walsh's status is creating unease among some Knicks officials and employees, who revere the New York-born Walsh for saving the franchise from the humiliation of the Isiah Thomas era." Walsh is "in the process of hiring" former Nuggets GM Mark Warkentien "to bolster the scouting operation." Team officials "insist that Warkentien's arrival has nothing to do with the trade talks or with Walsh's future," but Warkentien "clearly has the experience to run the team if Walsh is pushed out" (N.Y. TIMES, 2/1).
FREEZE TAG: In Portland, Andy Giegerich reports the Trail Blazers, "after two years of hiking ticket prices," will "keep rates flat for the 2011-12 season." Trail Blazers Senior VP & COO Sarah Mensah last week said that the team "will keep its rates the same for most seats while even dropping prices in certain arena locations." Team officials "expect to maintain the current streak of 137 straight sell-outs." Meanwhile, the Trail Blazers also "expect overall sponsorship dollars to jump by 5 percent by the time the 2010-11 season ends" (PORTLAND BUSINESS JOURNAL, 1/28 issue).
HOLDING PATTERN: In Detroit, Drew Sharp writes of the Pistons' ownership situation, "Indecision is killing this franchise's reputation. They can't sell the team. They can't trade Rip Hamilton for anything that involves a human pulse." Owner Karen Davidson "has so badly decimated the Pistons' once peerless standing in the public and league's mind that there's no guarantee that simply waiting for new ownership can sufficiently heal the wounds inflicted since Bill Davidson's death two years ago." Whether it is Platinum Equity Chair & CEO Tom Gores or the Ilitch family "taking over the checkbook, they'll face a steep challenge in rebuilding public credibility" (DETROIT FREE PRESS, 2/1).
RARE AIR: Earnhardt Ganassi Racing co-Owner and Bobcats investor Felix Sabates said of Bobcats Owner Michael Jordan, "I like Michael a lot. He has really done a lot of things. There's so much difference between him and Bob Johnson. It's like day and night. He put up $170 million of his own money into it, plus what he borrowed. So he's got to make it work. I think in Michael's case, it will work. It might be a process of two or three years. He's got his money in it, and he doesn't have any other source of income like Bob did. Bob could lose some money. Michael, this is it. He's motivated" (CHARLOTTE BUSINESS JOURNAL, 1/28 issue).