SBD/February 2, 2011/Franchises

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  • Devils Partner Looks To Sell Stake; Vanderbeek Seeks To Remain In Control

    Gilfillan, Vanderbeek teamed to buy Devils in '04 for $125M

    Devils co-Owner Michael Gilfillan, a "minority partner in the franchise for more than a decade and a key figure in the development of the Prudential Center, is looking to sell his stake in the team," according to Giambusso & Mueller of the Newark STAR-LEDGER. Devils Chair & Managing Partner Jeff Vanderbeek yesterday in a statement confirmed that Gilfillan, President of Brick City Hockey, has "retained Baltimore investment bank Moag & Co. to explore the sale of his share." Gilfillan and his father-in-law, Raymond Chambers, control Brick City. Moag & Co. "sent out a letter to prospective investors on Jan. 25," and the potential sale of Gilfillan's interest in the team "remain in the early stages." Sources indicated that Gilfillan and Chambers "don’t want to invest millions of dollars more into the franchise, which is building two high-end restaurants" in Prudential Center and "contributing to the development of a nearby hotel." Brick City and Vanderbeek teamed to buy the Devils for $125M in '04 (NJ.com, 2/1). Vanderbeek said he has no "desire to sell the team," and anticipates "maintaining a controlling interest." However, a source indicated that Brick City owns "half the team," and if someone buys the holding company's stake "they may not want to share controlling interest" (N.Y. POST, 2/2).

    SETTING UP FOR A POWER STRUGGLE? Gilfillan in a statement said Brick City has the "contractual rights under its partnership agreement with Jeff Vanderbeek to cause a sale of the entire team and arena rights, subject to certain terms and conditions." A source indicated that Vanderbeek is "considering buying out part or all of Brick City’s share and that the day-to-day operations of the hockey club and Prudential Center will not be impacted" (Bergen RECORD, 2/2). The GLOBE & MAIL's David Shoalts cites a source as saying that Chambers is the "real power in the ownership group," and it is his "unhappiness with the way the Devils are operated that resulted in Brick City’s decision to sell its share." Sources said that Chambers' "unhappiness stems from how Vanderbeek operates the team and the arena." While Vanderbeek wants to maintain a controlling interest, the source indicated that the "ownership structure of the team is complicated and Chambers could hold a majority interest in the franchise through more than one company." NHL Deputy Commissioner Bill Daly in an e-mail yesterday said that Chambers is "not the majority owner of the team" (GLOBE & MAIL, 2/2).

    Print | Tags: New Jersey Devils, Franchises, Hockey
  • Sabres Officially Announce Sale Of Team To Terry Pegula

    Final details of Sabres sale were ironed out late Monday night

    The Sabres yesterday announced that Owner Tom Golisano "has completed an agreement to sell the franchise" to East Resources President & CEO Terry Pegula, according to Mike Harrington of the BUFFALO NEWS. Golisano tomorrow "will join managing partner Larry Quinn to discuss the transaction during a news conference." Golisano, "who has owned the team since he rescued it from bankruptcy in 2003, has not met with the media since the opening day of training camp in 2008." Pegula, "who will become the fourth owner in the franchise's 40 seasons," will have his own news conference "once the deal is approved by the NHL's Board of Governors, which is likely to happen later this month." Financial terms of the deal were not disclosed, but it is "widely known Pegula is paying $189 million for the Sabres, the popular and profitable Buffalo Bandits of the National Lacrosse League and the right to manage" HSBC Arena (BUFFALO NEWS, 2/2). Quinn said that the "final details of the sale were ironed out late Monday night, but he would not elaborate." In N.Y., Klein & Caldwell note Pegula and his wife, "who grew up in the Buffalo suburbs, are former Sabres season-ticket holders." Last year, they donated $88M to Penn State Univ., the "largest private gift in university history, to build a hockey rink and start Division I men's and women's hockey programs" (N.Y. TIMES, 2/2).

    Print | Tags: Buffalo Sabres, NHL, Franchises
  • Mets Reportedly Want To Sell Minority Stake By June To Aid Cash Flow

    Katz, Wilpon met with Bud Selig and other MLB officials to discuss Mets' finances

    The Mets "hope to complete the sale of up to a 25% stake by the end of June" as team ownership "seeks funds to make up for a potential settlement related to investments" with Bernie Madoff, according to a source cited by Futterman, Rothfeld & Bray of the WALL STREET JOURNAL. Fred Wilpon and Saul Katz met with MLB Commissioner Bud Selig and other league officials yesterday in "what was described as an effort to update Major League Baseball on the Mets' financial problems and the owners' plans to sell a minority stake in the team, which they revealed Friday." Sources indicated that they "discussed the Mets owners' exposure from a lawsuit by the court-appointed trustee gathering assets for victims" of Madoff's Ponzi scheme (WALL STREET JOURNAL, 2/2). Baseball officials contend that yesterday's meeting was "arranged weeks ago" and was not "characterized as some sort of emergency summit as the Wilpons work to maintain their controlling interest in the Mets" (NEWSDAY, 2/2).

    MORE THAN MEETS THE EYE? On Long Island, Neil Best notes while the Wilpons have stressed that the family's "roughly two-thirds stake in SportsNet N.Y. is not for sale," industry execs believe that it "will be difficult to get top dollar without including the profitable regional sports network, or perhaps an interest in Citi Field." Former MLB Rangers Minority Owner & President Michael Cramer, now Dir of the Texas Program in Sports & Media at the Univ. of Texas, said, "There is no chance I would buy into the Mets without SNY -- none, zero, zip -- it just wouldn't happen." SportsCorp President Marc Ganis: "I'd be surprised at the end of the day if the other core assets are not included in some manner." Best notes SNY is "believed to take in more than $300 million per year in fees from cable, satellite and phone company providers even before selling ads" (NEWSDAY, 2/2). Cramer said, "This could easily morph into a majority stock interest sale or a full sale." He added that "having a franchise that might approach $1 billion in value puts the Mets 'in the stratosphere'" for MLB. NEWSDAY's Best notes that price tag "could make it less practical to find multiple minority owners" (NEWSDAY, 2/2).  But former Mets 1B Ed Kranepool yesterday confirmed his interest in becoming part of a Mets ownership group and said, "I'd be crazy not to seek this opportunity." Kranepool has aligned himself with Martin Luther King III, Vobile President of Cable & Sports Larry Meli and entrepreneur Donn Clendenon Jr. Kranepool said that "it's 'premature' to talk too specifically about the group, saying only that King's attorney will be the front person in terms of contacting Steve Greenberg at Allen & Co., who is handling the process for the Wilpons." He insisted that the "financial end would not be an issue" (NEWSDAY, 2/2).

    STAND BY YOUR METS: Mets GM Sandy Alderson conceded last night that without Selig's "urging, he probably wouldn't have even applied for the position or left his previous job with MLB." Alderson revealed there is no "out" clause in his contract based on a change in Mets ownership, but added he is "not at all expecting" the Wilpons to sell a controlling interest in the franchise. Alderson also said "there was a little bit of an overreaction" to his contention that the Mets' payroll for '11 was too high (N.Y. DAILY NEWS, 2/2). Alderson yesterday "described the Mets as holding their breath in waiting to see how the Madoff mess shakes out." He said, "There are a lot of things that can have some impact, positive or negative, going forward. But I honestly don't think it's going to affect us in a substantial way" (NEWSDAY, 2/2).

    THE TIES THAT BIND: In a front-page piece for the N.Y. TIMES, Kovaleski & Waldstein report interviews with current and former associates of Wilpon and Katz, as well as former employees of the Mets and of Madoff, "make it clear that the relationship was substantial and that the role Mr. Madoff played in the financial life of the ball club and the Wilpon and Katz families was pervasive." New York attorney Jerry Reisman said, "It was reciprocal, symbiotic. They both relied on each other for money, and Bernie also relied on Fred for contacts." Former Mets employees said that "substantial aspects of the club’s financial operations seemed to flow through, or wind up with, Mr. Madoff -- annuities set up for players, cash generated by sponsorship deals, and more." Kovaleski & Waldstein report when the Mets "negotiated their larger contracts with star players -- complex deals with signing bonuses and performance incentives -- they sometimes adopted the strategy of placing deferred money owed the players" with Madoff's investment firm. They would "have to pay the player, but the owners of the club would be able to make money for themselves in the meantime" (N.Y. TIMES, 2/2).

    Print | Tags: New York Mets, Baseball, Franchises
  • Blue Jackets See Little Progress On Resolving Financial Woes

    The Blue Jackets currently pay $5M a year in rent to play at Nationwide Arena

    Officials from a Blue Jackets supporters group formed last year to "find a solution to the team’s financial problems" said that there is "nothing new to report on their progress," according to Jeff Bell of BUSINESS FIRST OF COLUMBUS. Forward Together officials said that "various scenarios, including a public buyout" of the privately owned Nationwide Arena, "have been discussed since spring 2009 by the key players in the game -- the Blue Jackets, arena owner Nationwide Insurance and officials with the city and Franklin County." But a source said that “nothing is likely to happen until the city and Penn National Gaming Inc. resolve their dispute over financial incentives the company is seeking in exchange for agreeing to annex its Franklin Township casino site into Columbus.” An accord “could open the door to using casino tax revenue that would go to Columbus and the county to help fund a public purchase of the 18,000-seat Nationwide Arena, possibly through the county Convention Facilities Authority.” Such a deal could result in “friendlier arena lease terms for the Blue Jackets, which pay $5 million a year in rent and don’t get revenue from parking or arena naming rights.” Nationwide spokesperson Eric Hardgrove said that the company “remains committed to working with the Blue Jackets and local officials to provide a sustainable business model to keep the team in Columbus.” Greater Columbus Sports Commission Exec Dir Linda Logan “thinks community officials are committed to addressing the arena issue and keeping the Blue Jackets” in the city. But Bell notes it appears the “impasse may imperil the Blue Jackets’ bid to host the 2013 NHL All-Star Game, an event long coveted by the team.” Logan said that the NHL has been “waiting for Columbus officials to resolve the arena issue before deciding” where to award the '13 All-Star Game (BUSINESS FIRST OF COLUMBUS, 1/28 issue).

    Print | Tags: Columbus Blue Jackets, Franchises, Nationwide Insurance
  • Franchise Notes

    City of St. Louis advised Blues to cancel game against Avalanche

    Last night's Avalanche-Blues game was postponed due to inclement weather, and in St. Louis, Jeremy Rutherford notes the NHL "had the final say" and made the decision "after having multiple conversations with" Blues Exec VP & GM Doug Armstrong and President of Hockey Operations John Davidson. Blues Enterprises Vice Chair & CEO Mike McCarthy: "The city advised us strongly to consider postponing the game, and we felt like this was the right decision." The Blues beginning Friday "will play 33 games in the final 65 days, or roughly one every other day," and McCarthy said, "We don't necessarily give ourselves a competitive edge with this (decision). We will have a tough schedule when this game is rescheduled, but we put the safety of our fans and staff and players first" (ST. LOUIS POST-DISPATCH, 2/2).

    MARKING THEIR TERRITORY: In San Jose, Bruce Newman reports the Giants yesterday took the World Series trophy "to San Jose to mark their territorial rights in the most public way possible." A total of 2,375 fans visited Municipal Stadium, home of the Single-A California League San Jose Giants, where the World Series trophy was on display "for three hours." But Newman notes civic leaders "were in short supply in San Jose, where local officials have lined up in lock-step behind" A's Owner Lew Wolff's proposed move of his franchise to the city (SAN JOSE MERCURY NEWS, 2/2).

    LOTS OF UNANSWERED QUESTIONS: In N.Y., Harvey Araton writes "after months of negotiations and continuing grapevine chatter," Mavericks G Jason Kidd said the "smartest thing ... about the Nets' long and supposedly aborted pursuit" of Nuggets F Carmelo Anthony. Kidd contended that NBA players "still consider the Nets a nowhere franchise and probably know as much about Brooklyn as they do about Egypt." Araton writes what Kidd was "astutely saying was that it was always unlikely that the Nets would be a destination for marquee players under present conditions because none of them could envision the new arena or its location," nor did they "have any idea of how it would fit into the New York metropolitan area's professional sports lineup." Araton: "Will the franchise's profile rise drastically within city limits? Or will an outer borough team be treated more like a suburban team (read: Nets, Devils, Islanders)?" (N.Y. TIMES, 2/2).

    FINANCIAL WARNING: In London, Matt Hughes writes UEFA "fired a shot across the bows" of EPL clubs Chelsea and Manchester City yesterday by "warning them that their new Financial Fair Play regulations will be rigorously implemented." UEFA responded to the approximate $210M (all figures U.S.) spent by Chelsea and Liverpool on Monday, the final day player transfers are allowed this season. Hughes notes UEFA "will ban clubs, from the 2015 Champions League onwards, who record losses of more than" $61.6M in the preceding three years, a figure that Chelsea and Man City "have far exceeded in recent years" (LONDON TIMES, 2/2). Also in London, Jeremy Wilson writes the two clubs are "confident that they will meet" the rules (London TELEGRAPH, 2/2).

    Print | Tags: Franchises
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