SBD/February 11, 2011/FranchisesPrint All
Platinum Equity Chair & CEO Tom Gores "has struck a tentative deal to buy the Pistons from Karen Davidson," according to a source cited by Tom Walsh of the DETROIT FREE PRESS. The "tentative agreement, which must be approved by the NBA, may be announced as early" as Friday. The agreement was reached Thursday night at the office of a Birmingham, Mich., law firm "after several days of intense bargaining over details." The total value of the deal, which "includes the team, the Palace of Auburn Hills and DTE Energy Music Theatre," is expected to be announced at $420M. Current ownership is "expected to retain a minority stake of perhaps 10% for up to several years." NBA Commissioner David Stern reportedly is "familiar with the deal ... and said to be supportive." Gores is "listed by Forbes magazine as one of the world's richest people, with an estimated net worth" of $2.2B (DETROIT FREE PRESS, 2/11). But the DETROIT NEWS' Krupa & Goodwill cite sources who have denied the report that a tentative agreement was reached Thursday. The sources said that there is "no agreement in place to sell the team and the two sides continue to bargain on a price." Davidson told WDIV-NBC Thursday that "no agreement is in place." Krupa & Goodwill report the Pistons are "about to extend exclusive negotiations" with Gores "for two weeks as negotiations gather steam" (DETROIT NEWS, 2/11).
LONG TIME COMING: In Detroit, Michael Rosenberg writes of the reported deal, "You can be sure there is relief in the halls of the Palace empire. Almost two years have passed since owner Bill Davidson died, and uncertainty and discomfort have dominated at the Palace." Gores "would be wise to look at what went wrong the last two years, and what went right in the decades before that." What made Bill Davidson "such a great owner was that he made his expectations clear, then gave his employees a chance to meet them" (DETROIT FREE PRESS, 2/11).
U.S. Bankruptcy Court Judge Burton Lifland Thursday appointed former New York Gov. Mario Cuomo to "mediate the cutthroat legal fight between the owners of the Mets and the trustee overseeing the recovery of funds from Bernie Madoff's collapsed Ponzi scheme," according to Thompson, O'Keeffe & Vinton of the N.Y. DAILY NEWS. The order "could mean a swifter resolution to the massive lawsuit that the trustee, Irving Picard, brought against the Mets' owners in December, claiming that Fred Wilpon, Saul Katz and their partners and companies 'knew or should have known' that Madoff was a fraud." Settlement talks between Picard and the Mets ended earlier this month "after both sides wrote letters to the judge asking that the suit be unsealed." Details of the mediation are "generally not made public until the settlement is announced, or there is no settlement" (N.Y. DAILY NEWS, 2/11). With mediation under way, Lifland "ordered that no papers about negotiations be filed with his court" (NEWSDAY, 2/11). Lifland said the "special issues" in this case require "an appropriately experienced mediator." Cuomo, who "began his career in public life as a lawyer and mediator 40 years ago" and is the father of current New York Gov. Andrew Cuomo, "will not be empowered to impose a settlement, but is expected to take steps to cool what has become an angry public fight" (N.Y. TIMES, 2/11).
HITS JUST KEEP ON COMING: In N.Y., Richard Sandomir reports while Citi Field is "not a target" of Picard's lawsuit against the Wilpons and Katz, the bonds that financed the Mets' ballpark "have a new black mark against them." Moody's Investors Service on Thursday "changed its outlook on the $695 million in bonds from stable to negative." Last year, Moody's and Standard & Poor's "downgraded the debt on the stadium to a rating of junk status," and that rating "remains in effect." Moody's in a statement said its assessment of the Citi Field bonds "acknowledges the close connection between the health and performance of the Mets baseball team and the long-term credit of the stadium project." Sandomir notes the "change in Moody’s outlook could be a precursor to another downgrade in the rating," and the report "reflects concerns about the team as the Mets’ owners vow to fight the trustee in court." Moody’s "more sober view, and any future rating cut, would increase the cost of future borrowings for the stadium" (N.Y. TIMES, 2/11).
BLOOMBERG NOT INTERESTED: N.Y. Mayor Michael Bloomberg, a Mets fan, Thursday said that he "will not invest" in the franchise. Bloomberg: "I don't think that I should own a baseball team. I have tickets at the Mets and the Yankees for my daughters to go and I enjoy baseball and a beer and a bag of popcorn there. But, rest assured, I'm not going to buy a baseball team or have an interest in it" (ESPNNY.com, 2/10). On Long Island, Anthony Rieber notes Bloomberg joins fellow Mets fan and comedian Jerry Seinfeld, former Mets Owner Nelson Doubleday and Cablevision Owner the Dolan family among "those who have said they are not interested in buying the Mets" (NEWSDAY, 2/11).
A JOB WELL DONE: In N.Y., Dan Martin notes Sandy Alderson has "stayed true to his word that he wouldn't mortgage the future to try to make any high-profile signings" in his first offseason as Mets GM, and people around MLB "have lauded his cautious approach." One exec said, "Everything they did was low-risk, pretty high-reward." But Martin notes "no one knows where that leaves the Mets, especially in the wake of their announcement that as much as 25 percent of the team is up for sale." While many expect the Mets to have a "much more high-profile offseason" after '11, "those plans no doubt have changed." In the meantime, they "have to decide how long to hold on to the assets they have" (N.Y. POST, 2/11).
MLB sources said Dodgers Owner Frank McCourt's financial problems are "serious, soon to be augmented by the payroll and day-to-day costs of running a team," but there will "not be a takeover" of the team by MLB Commissioner Bud Selig, according to Buster Olney of ESPN.com. The league is "expected to take the same approach with McCourt as it did" with former Rangers Owner Tom Hicks, as it likely will "stand by and just let events play out." McCourt "badly needs cash, and while he has looked for other investors, he has indicated no interest in selling off a large share of the team, in the way Fred Wilpon has" with the Mets. It appears that the problems of the Dodgers "are much more immediate than those of the Mets." However, the Mets' revenue stream "has shriveled substantially because of diminished ticket sales." The "decline of the Mets' coffers is to the point that some owners wonder if the team will be asked to contribute to the sport's revenue sharing fund -- which is almost unthinkable, given the Mets' standing in the sport's largest market" (ESPN.com, 2/11). In L.A., Bill Shaikin noted Selig "has so far resisted any deal in which Fox would pay McCourt a hefty sum in exchange for the Dodgers' long-term broadcast rights." The logic is that the "money Fox would pay should go to improve the team, not to pay off an ex-wife in a divorce settlement." The McCourt and Wilpon "sagas are far from over, and it is unclear whether either man can make good on his vow to maintain control of his team" (LATIMES.com, 2/9).
METS TAKEOVER ALSO UNLIKELY: FOXSPORTS.com's Rosenthal & Morosi cited sources as saying that a "takeover of the Mets by baseball is extremely unlikely." One source said such actions occur only as a "last resort." MLB "intervened with the Texas Rangers, loaning the club a reported $40 million, only when ... Hicks could not meet his payroll." The Mets are "not in nearly as dire a position." One AL team official said, "They still have a payroll of about $140 million. It's not as if all of a sudden they're the Pittsburgh Pirates" (FOXSPORTS.com, 2/10).
The city of Glendale's financing for the Coyotes deal is "expected to be completed next week, paving the way" for Peak6 Investments CEO Matthew Hulsizer to "take over the team," according to Rebekah Sanders of the ARIZONA REPUBLIC. A Moody's Investors Service report issued Thursday revealed that Glendale "plans to put as much as $116 million in bonds up for sale Tuesday." The bond sale "could be the last significant hurdle to ending the Coyotes ownership drama that has dogged Glendale nearly three years." The city is selling the bonds to "secure a deal" with Hulsizer, who plans to purchase the Coyotes from the NHL for nearly $170M. NHL Deputy Commissioner Bill Daly on Thursday called the move to sell bonds a "positive step" and added the league is hopeful a sale "can be completed in the near future" (ARIZONA REPUBLIC, 2/11). The GLOBE & MAIL's David Shoalts reported Moody's gave the $110.9M bond offering a "rating of A1," its fifth-highest credit rating. The A1 rating is an "important step in the sale of the Coyotes but it does not mean the deal is finished." Once the bonds go on sale, at an expected interest rate of 6%, there is "no guarantee financial institutions will buy them because the public municipal bond markets are flat." Shoalts noted "this could mean the city would have to try and sell them on the private market at a higher interest rate, which means adding to its already considerable overall debt" (GLOBESPORTS.com, 2/10).
Orioles President of Baseball Operations Andy MacPhail was "fairly candid about his management philosophy" Thursday at the Univ. of Baltimore School of Law's Pro Sports Symposium, according to Kevin Van Valkenburg of the Baltimore SUN. MacPhail said that it is "obvious the Orioles cannot financially compete with the Yankees, especially when the Yankees charge 10 times as much for season tickets and draw revenue from a TV network that's worth more, on its own, than most franchises." Because of that, MacPhail's focus "has been figuring out a way to improve the Orioles by boosting the team's amateur scouting, opening a new spring training facility and signing hitters, not pitchers, in free agency." He offered "deeper insight into why the team doesn't try to make big, splashy moves -- unless a 'perfect storm' exists the way it did with Mark Teixeira, to whom the Orioles offered" a $144M deal in '08. MacPhail: "We have to spend our money where we're on equal footing. And we have to be efficient with it. ... We're not going to be buying No. 1 pitchers. Because by the time they reach free agency, they're expensive and they're fragile. It's just a bad place for us to spend our money." MacPhail said that since '07, "no team in the American League East has spent more money on signing bonuses than the Orioles." He added that "while it may frustrate fans, patience and long-term planning are the only approach he thinks will work." MacPhail also said that he "doesn't believe the economic disparities in baseball are going away, which is why the Orioles have to stick with their philosophy." He added that there is "very little interest, from either the owners or the players union, in implementing a salary cap." MacPhail noted that the Orioles "have been spending money generated" by MASN on payroll, "but emphasized that MASN will never be the equal of YES or NESN." Also, "if there was one team MacPhail feels like the Orioles need to emulate, at least from a management philosophy, it's the Tampa Bay Rays" (Baltimore SUN, 2/11).