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SBD/March 7, 2011/FranchisesPrint All
The City of Glendale is "expected to file suit Monday against the Goldwater Institute and specific members of the public watchdog's board," according to sources cited by Scott Burnside of ESPN.com. The lawsuit is "expected to allege the Goldwater Institute was guilty of a legal form of interference when the institute reached out to potential buyers of municipal bonds, the sale of which are crucial to the City of Glendale's new lease agreement" with prospective Coyotes buyer Matthew Hulsizer, and "warned them off purchasing the bonds." The lease agreement "calls for the city to pay $100 million to Hulsizer toward the purchase price of the team," and the municipal bonds are "needed to generate that revenue." It is "believed the NHL's patience with the situation in Glendale has reached the breaking point and that if the municipal bonds are not sold within a matter of days, or unless there is a new strategy revealed for getting the lease agreement done, that the league will move to relocate" the Coyotes to Winnipeg. A source familiar with the planned lawsuit against the Goldwater Institute said that the city "will name not just the institute itself but individual directors and will ask for 'hundreds of millions' of dollars in damages." Goldwater BOD member Randy Kendrick, the wife of D'Backs Managing General Partner Ken Kendrick, is "among those expected to be named specifically in the suit" (ESPN.com, 3/5). In Phoenix, Rebekah Sanders cites a source as saying that Glendale is "expected to sue for significant damages," potentially "as much as $500 million, the amount of economic impact Glendale estimates it would lose if the NHL team left for Canada" (ARIZONA REPUBLIC, 3/7).
THE BONDS THAT TIE: NHL Deputy Commissioner Bill Daly Friday said that the league is "actively engaged in helping the City of Glendale sell or place the $116 million municipal bonds being floated to fund $100 million of Hulsizer's purchase price." Daly said in an e-mail, "I think it is fair to say that we are attempting to assist in the completion of the transaction in any way we can" (WINNIPEG FREE PRESS, 3/5). In Phoenix, Mike Sunnucks reported Glendale, Hulsizer and the NHL are "reworking the $100 million bond deal." Sources familiar with the Coyotes deal said that "perhaps the bond amount could be reduced so Hulsizer gets" $70M instead of $100M. That "could make the bonds more financially doable or up to legal scrutiny" (BIZJOURNALS.com, 3/5). Meanwhile, Hulsizer has indicated that the Coyotes and Jobing.com Arena "have lost $40 million this season," though team officials said that a "typical end-of-season bounce should lessen that." Team officials also "point to positive signs in ticket sales," but "as it stands, the losses have pushed up Hulsizer's purchase price to" $210M. The ARIZONA REPUBLIC's Sanders reported the NHL "tacked on team and arena losses to the $140 million purchase price, which is what the league paid to take the team out of bankruptcy in late 2009." The Coyotes "lost about $30 million last season." Hulsizer said that he is "willing to pay those losses if the team sale goes through." Hulsizer: "I'm inheriting a terrible problem, but I really like hockey. And I feel like we can make a few tweaks, and we can make a pretty good go of it" (ARIZONA REPUBLIC, 3/6).
END IN SIGHT? ESPN.com's Pierre LeBrun noted the "next 7-10 days may possibly decide the fate" of the Coyotes. Either the bonds "will finally be sold and the sale could finally close to keep the team in Phoenix, or the bonds won't be sold and the league will be forced to make a difficult decision on whether to relocate the team to Winnipeg for the 2011-12 season." There is "still no official deadline for this to be resolved, but the belief is the process is already living on borrowed time." It "doesn't seem this can drag on past the end of March/early April" (ESPN.com, 3/5). In Phoenix, Paola Boivin wrote, "This mess has grown so complicated that it's hard to know whom to blame anymore. The Goldwater Institute surely deserves some of it. Their threat of legal action is what has stalled the sale in the first place. ... The City of Glendale deserves to be scolded, too, for lacking the finesse and foresight to get this deal done" (ARIZONA REPUBLIC, 3/6). In Toronto, Damien Cox wrote, "This was and is a bad deal, and it's never going to be anything but a bad deal. Glendale needs to run, not walk, from Hulsizer and the NHL" (THESTAR.com, 3/4).
A group led by Blues minority owner Tom Stillman has made an offer to "purchase the team outright," but Owner Dave Checketts' SCP Worldwide has "rejected the bid," according to sources cited by Jeremy Rutherford of the ST. LOUIS POST-DISPATCH. SCP instead "will continue seeking financial support to replace the Blues' major investor, TowerBrook Capital Partners, and maintain control of the club." The bid from Stillman's group is the "only known offer for the team, an offer sources said was far less than the estimated value of the franchise." Forbes valued the franchise at $165M in '10. Sources indicated that Checketts "would step aside if he was offered his asking price, which is not known at this time, but based on the recent bid he is not ready to sell." Sources said that Stillman's investment group "includes a couple of 'heavy hitters' ... and also has strong St. Louis connections." It is "unknown if a second proposal will be submitted, but multiple sources said that Stillman is committed to gaining majority ownership of the Blues." Under the current arrangement, TowerBrook "possesses the largest stake in the team" at 75%, followed by SCP at slightly more than 10% and Stillman at 10% (ST LOUIS POST-DISPATCH, 3/5).
NO PLAYOFF PAYOFF: In St. Louis, Greg Edwards notes with the NHL playoffs "looking increasingly unlikely for the St. Louis Blues, the team is facing the loss of millions of dollars in playoff revenue, not to mention half the price of 600 season tickets." As part of a "highly publicized and risky promotion, the Blues offered the buyers of 300 lower-level and 300 upper-level season tickets a deal at the beginning of the season: Pay half of the price of your seats up front, and not a penny more if the team fails to make the playoffs." Playoff revenue is "key to the team’s financial performance." Blues Exec VP/Finance & Administration Phil Siddle noted that revenue for fiscal '10 was $103.7M, down $7.6M or 6.8% from fiscal '09 -- "primarily because of the team’s failure to make the playoffs last season and insurance proceeds from player injuries that did not recur." The Blues also have been "reducing payroll by trading away players as the team continues to look for new ownership in a recession in which investors are hard to find, financing is scarce and other teams are up for sale" (ST. LOUIS BUSINESS JOURNAL, 3/4 issue).
Dee says NFL CBA dispute has not
affected Dolphins' ticket sales so far
Q: Were the Dolphins in the black or in the red last year?
Dee: I won’t comment on our financial performance as we are a privately owned company. I will say we’ve taken steps to bring financial stability to the franchise. We’ve said from the get-go that in order to run a successful sports franchise, there has to be a certain amount of financial predictability to your business. That’s why getting the season ticket base to a higher number, securing Sun Life as a naming rights partner, and building other revenue streams to a sustainable base helps you make better decisions over the long haul.
Q: Has the possibility of a looming labor dispute affected your ticket sales?
Dee: I don’t think it’s impacted us that much to this point. We are seeing impact from having a season that did not live up to expectations and some early returns on ticket sales were very strong but now you’re seeing folks that may have bought in the past year or two taking time to evaluate. ... Nobody likes going 1-7 at home. We do a lot of focus groups and talk to our fans and they were frustrated with our performance at home. We get that.
Q: The Super Bowl in Dallas was a weather disaster. With that in mind, how can the NFL and the Dolphins tell South Floridians they need a canopy roof on Sun Life Stadium in order to host future Super Bowls?
Dee: What we’ve sought to do with the NFL is identify what we need to do as a community to be competitive in the Super Bowl mix for the next 30 years and to attract them at the same rate that we’ve come to expect. The reality is that we have an aging facility in an idyllic, can’t-be-beaten, best-in-class destination. There’s no one in the NFL that will argue that point. The NFL loves coming here. But the NFL also is making it clear that the game is played in the stadium, not on beaches or in hotel lobbies or runways of major airports. ... We just need to make sure we have a stadium that is able to compete and meet the demands of the game. ... We want to make sure this stadium is adequate. It doesn’t need to be the best. It doesn’t need to be the most expensive or the newest. But it needs to be competitive against those facilities built in the 21st century that bring new elements to the table (MIAMI HERALD, 3/6).
The fact that Jets coaches "will get hit with a 25 percent pay cut, starting almost immediately," in the event of a lockout "doesn't sit well with" NFL Coaches Association Staff Dir Larry Kennan, according to Rich Cimini of ESPN N.Y. Kennan: "That's very harsh compared to other teams in the league." Kennan said that "fewer than 10 teams are planning to institute pay cuts that severe" (ESPNNY.com, 3/4). Kennan: "There are probably two to three teams in the league who treat their employees very well, and a third of the teams don't treat them as well as we would like." Bears President Ted Phillips Friday said that while the "overwhelming majority of NFL coaches will be forced to accept pay cuts in the event of a labor stoppage, Bears assistants have been assured their pay won't be docked unless a lockout forces NFL games to be canceled." Phillips: "We're having no layoffs, no furloughs, no pay cuts until we actually miss games" (CHICAGO SUN-TIMES, 3/5).
BUSINESS AS USUAL: Dolphins CEO Mike Dee indicated that team employees and coaches "won't be furloughed, fired or asked to take pay cuts during a work stoppage." Dee: "That is our plan for the near term. We've communicated openly with our staff that we see it as being business as usual for the moment. We're taking this one month at a time, one week at a time, event." He added, "Our strategy as an organization is to conduct business as usual for now. While any labor impasse obviously carries material consequences in the short term, the regular season doesn’t start for another six months. There’s a lot of time between now and then. … If we get further down the road and it looks like things could be prolonged or it looks like there’s an onerous threat to the season, we will be prepared to cross that bridge when we come to it. Obviously, you’d have to make the appropriate adjustments" (MIAMI HERALD, 3/6).
LEARNING CURVE: New 49ers coach Jim Harbaugh said of a potential lockout, "You could say that maybe it's a disadvantage for us. We haven't given our players any type of a playbook and they don't know what our schemes are." NFL Draft prospect QB Greg McElroy added, "It doesn't help you. With no minicamp, no OTA's, it's going to hurt you. It's going to leave you behind" (CHARLOTTE OBSERVER, 3/6). SI.com's Peter King writes one thing he is "starting to hear teams be concerned about -- if they can't keep in touch with players or monitor their offseason workout regimen -- is a sort of withholding of aerobic conditioning by some players -- something that in the event of a long job action could affect the preparedness of players early in a new season." National Football Post President and ESPN analyst Andrew Brandt: "I can tell you that medical people at the Scouting Combine were scared about their players doing rehab. Now players won't rehab in their facilities or with their team doctors" (SI.com, 3/7).
Warriors co-Owner Joe Lacob Saturday at the MIT Sloan Sports Analytics Conference was asked a "muffled question about bloggers," and he responded, "They are not real fans, because they don't have season tickets," according to Rusty Simmons of the S.F. CHRONICLE. After a follow-up question, Lacob said, "Unlike every real fan, they don't have season tickets." All that reached Twitter and the blogs was the idea that season-ticket holders were the only "real fans," and that resulted in "vitriolic remarks about Lacob." But a "straw poll of journalists who covered the conference, but don't regularly cover the Warriors, found that Lacob came off well, despite the 'real fan' slip." Of his other remarks, "perhaps the most notable was that he could get out of the Oracle Arena lease in six years and would consider getting into a new arena." He also said that trades are "hard to make." That was a change from a November comment when Lacob said, "You should be able to turn around a team fast" (S.F. CHRONICLE, 3/6). In San Jose, Tim Kawakami wrote it is "not hard to interpret the brief comments as Lacob taking a quick shot at fan websites, suggesting that the only 'real fans' are season-ticket-holders, and that he could disregard the rest." But Lacob clarified his comments later Saturday, saying, "The last thing I'd want to do is denigrate the online community. I think I've demonstrated an openness to media, the fans, everybody, to answer every question, take it head on. And I'm willing to listen." Lacob added, "This (being seen as attacking the internet fanbase) is the exact opposite of what I'm doing. ... If anything, I've been incredibly accessible to fans and the internet community particularly. I embrace the online community" (MERCURYNEWS.com, 3/5).
LOSING FAITH: The MERCURY NEWS' Kawakami writes under the header, "It's Getting Harder To Have Faith In Warriors Owners." Lacob is "not quite the Warriors fans' gallant knight anymore." The "problem for his reputation is that Lacob has painted himself as both an expert basketball man of action and a man of the people." But "so far the expertise/action has not been displayed, and Lacob has had some bumpy moments with the fan interplay." Lacob said that in his initial comments about bloggers he was "referring to several profanity-laced e-mails that he has received, not to the fan base at large." But those comments "resonate because in the recent past Warriors officials have at times been dismissive of general critiques and because Lacob has retained several executives who did the dismissing." Kawakami: "How can Lacob believe the executives who got the Warriors into this muddle are the right ones to get them out?" (SAN JOSE MERCURY NEWS, 3/7).
GETTING TECHNICAL: The S.F. CHRONICLE's Simmons reported the Warriors are "one of five franchises ... to have high-tech cameras installed at their arenas in hopes of gaining more advanced metrics." Sportsmetricians Consulting Founder Sandy Weil Saturday at the MIT conference "explained some of the data generated from his cameras, which have three-dimensional capabilities, capture 25 images per second and record everything on the court" (S.F. CHRONICLE, 3/5).
ONLY GAME IN TOWN? In Oakland, Monte Poole writes Sacramento's "misfortune will become the Bay Area's good fortune" if the Kings leave for Anaheim. Four months into their ownership of the Warriors, Lacob and co-Owner Peter Guber are seeing their $450M investment "become considerably more valuable." They are a "few fine details away from running the only NBA franchise between Los Angeles and Portland." If the Kings leave Sacramento, the Warriors "can expand their reach, siphoning a few more fans and a little more interest from Sacramento and neighboring cities, as well as the Central Valley" (OAKLAND TRIBUNE, 3/7).
Former N.Y. Gov. Mario Cuomo, who is trying to broker a settlement between the trustee in the Bernie Madoff case and Mets Owners Fred Wilpon and Saul Katz, said Friday that the two sides "will try as hard as they can to settle their legal battle," according to Anthony DeStefano of NEWSDAY. Cuomo said that a "prolonged fight in bankruptcy court over trustee Irving Picard's $1 billion lawsuit against the team owners would become a costly war of attrition." Cuomo: "Both sides agree, 'Yes we are willing to make every effort to make settlement here.'" Cuomo added that he "has talked separately to lawyers for the two sides." Cuomo said that he "hoped to have more talks" this week with attorneys from both sides "to find out what each side was willing to compromise on, if at all" (NEWSDAY, 3/5).
PIAZZA A POTENTIAL BUYER? In New Jersey, Art Stapleton reports former MLBer Mike Piazza Saturday "did not rule out taking ownership of a franchise someday," but the idea of buying a Mets stake now is "not something he lent much credence to." Piazza: "Would I be interested in possibly getting involved in a group to buy a team someday? Probably. I've been thinking about it ... but as far as anything in the forefront, nothing. Down the line, we'll see." When asked if he "has been approached to be a part of a group to purchase a stake in the Mets," Piazza said, "I can't confirm or deny that. Let's just say I've talked to some people who have interest in getting into the game. It doesn't cost anything to talk, at least not yet" (Bergen RECORD, 3/6).
FISH OR CUT BAIT: In N.Y., Joel Sherman cited two MLB execs as saying that it "would be wise for the Mets to reduce payroll dramatically; even to, say, the $70 million range as soon as the 2012 season." They "felt even a stripped-down version of the Mets still would draw no worse than two million spectators to Citi Field," and that "would allow the Mets to make money, moving banks to feel less edgy about current loans and, possibly, even consider future loans." Mets GM Sandy Alderson "already has said the plan for 2012 is to bring the payroll significantly down from the current $140 million-plus." An AL exec said, "It is time to get real. And this is the perfect time. The smart fans will get it. They understand that the talent level is not nearly good enough in the majors or the minors. They see what is happening with Madoff. A total renovation is needed" (N.Y. POST, 3/6). USA TODAY's Paul White writes, "If anything, the Mets have been guilty of overspending, not cutting corners in the face of impending doom." Alderson said, "I have been given no indication that we will be hamstrung by any financial issue" (USA TODAY, 3/7).