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SBD/April 11, 2011/FranchisesPrint All
Pistons Owner Karen Davidson and Platinum Equity Chair & CEO Tom Gores Friday confirmed that they "have signed an agreement" for Gores and Platinum Equity "to purchase the Palace Sports & Entertainment and its assets -- the Pistons, the Palace of Auburn Hills, DTE Energy Music Theatre and the operating rights to the Meadow Brook Music Festival," according to Vince Ellis of the DETROIT FREE PRESS. Terms of the deal were not announced. A source said that the agreement "places a so-called enterprise value of more than $400 million on the team, the Palace and DTE." But Gores "may pay closer to $300 million after backing out minority ownership interests, debt and other liabilities." The NBA BOG "still has to approve the agreement, and the deal is expected to close by the end of June." The NBA announced that Gores "will be introduced to the finance advisory committee Thursday at the owners meetings" in N.Y. (DETROIT FREE PRESS, 4/9). Sources said that Davidson "will retain an equity stake in the team and Palace Sports & Entertainment." But that stake "will decrease as Gores .... continues to pay for his increasing share of the franchise" (CRAINSDETROIT.com, 4/10). In Detroit, Tom Walsh reported Davidson "had earlier planned to hang onto 10%," but that number "has reportedly shrunk to the low single digits" (DETROIT FREE PRESS, 4/9). CRAIN'S DETROIT BUSINESS' Bill Shea wrote, "I'm guessing that the purchase price is somewhere about $400 million to $420 million. But the purchase agreement is expected to be complex and the final price could be quite different. How much [Gores] pays himself, and how much is leveraged or comes from his other holdings, remains to be seen." Meanwhile, Gores "has no immediate compelling reason to abandon the 22,076-seat Palace of Auburn Hills -- which carries no debt" (CRAINSDETROIT.com, 4/9).
LOOKING AHEAD: Palace Sports & Entertainment President & CEO Alan Ostfield, when asked "about a private equity firm's mission to buy companies and sell off pieces," said that "his staff's interaction with Gores and his staff gives him comfort that won't happen." As for Gores' potential involvement, Ostfield "didn't want to guess what will occur but said Gores' staff has said repeatedly Gores is heavily involved in his businesses." Ostfield added he believes Gores is "committed to this (Auburn Hills) community" (DETROIT FREE PRESS, 4/9). In Detroit, Krupa & Goodwill cited sources as saying that Gores' track record "may make him a good owner, as long as he is willing to spend." Some said that they "expect him to attempt to spend wisely, but not lavishly in some attempt for immediate success" (DETROIT NEWS, 4/9). SportsCorp President Marc Ganis: "I do not expect Gores to be the next Mark Cuban. Even though they are about the same age and have some similar interests and ways of investing, he has not indicated that he has a passion for the game, itself, that Cuban has. But he has a clearly stated passion for the community, and that is where I think his focus should be." Ganis added, "I do not expect him to spend an enormous amount of money, go over the salary cap and spend and spend to move immediately to a championship-caliber team. But I do expect him to spend wisely on players" (DETNEWS.com, 4/9). Ostfield said Gores is "competitive as heck and he wants to win." Ostfield: "He's buying a business that he knows, from a basketball perspective, is clearly on a downward cycle. I mean, that goes without saying. And obviously he knows that happens in professional sports" (DETROIT NEWS, 4/9).
DUMARS SAFE: ESPN N.Y.'s Rob Parker cited a source as saying that Pistons President of Basketball Operations Joe Dumars "will keep his gig -- even after the ownership change" (ESPNNY.com, 4/10). In Detroit, Bob Wojnowski wrote the Pistons "need a committed owner with dough, and also someone who lets the basketball people make basketball decisions." Dumars "has shown he can build a team," and "that's why Gores would be wise to let Dumars work through this before making any rash decision" (DETROIT NEWS, 4/9). Also in Detroit, Michael Rosenberg wrote of Gores, "Early signs are that he gets it. Gores has never been an attention-seeker. I expect him to announce soon that he will keep Joe Dumars. ... Gores is not going to fire people just because he didn't hire them. That gives you a hint that this is not entirely about his ego" (DETROIT FREE PRESS, 4/9).
CHANGING OF THE GUARD: In Detroit, Drew Sharp wrote, "Saying good-bye to Karen Davidson means saying good-bye to two years of instability. Davidson realized early that she lacked the drive and passion for running a professional sports franchise. ... Not everyone possesses the will for such an undertaking, and nobody should blame her for her actions. Now we have an owner who wants the job" (DETROIT FREE PRESS, 4/9). Also in Detroit, Mitch Albom wrote an open letter to Gores. Albom: "Sports teams are notoriously tough investments. Costs are uncertain. Fans are fickle. Players slump. Labor issues loom. And that's just the Pistons! ... If you let the fans get to know you, this can be a great town for an owner. If you show the fans you want to build a winner, you can be embraced" (DETROIT FREE PRESS, 4/10).
EPL club Arsenal today announced that it has "agreed to be taken over" by investor Stan Kroenke after he "bought out two of his fellow club directors," according to Naughton & Hughes of the LONDON TIMES. Kroenke already owned 29.9% of the club, and it was announced this morning that he had agreed to a deal to "acquire the 16 per cent stakes held by both Danny Fiszman and Lady Nina Bracewell-Smith, triggering a formal takeover." The takeover values the club at around $1.2B (all figures U.S.), and if it goes ahead it will "make Arsenal the tenth club in the Barclays Premier League to come under foreign ownership." But Kroenke's "biggest obstacle" in regard to a takeover is "likely to be obtaining the shares" of investor Alisher Usmanov, who owns a 27% stake. Usmanov "has paid inflated prices for shares in the past and will want to drive a hard bargain." Naughton & Hughes note "crucially for the club's long-term financial health, and their ability to compete in the transfer market," Kroenke has "promised that the deal will not be funded by debt secured against the club's assets and future earnings -- unlike Malcolm Glazer's 2005 takeover of Manchester United" (THETIMES.co.uk, 4/11). BLOOMBERG NEWS' Tariq Panja notes Arsenal currently has a net debt of $180.5M, and Kroenke's offer "made clear that the shares would be bought with cash and no debt will be added on to the team." By "securing the holdings of the third- and fourth-largest shareholders in the club, Kroenke will raise his stake to a total" of 62.89%. Fiszman, who is "fighting cancer, has agreed that Kroenke can buy his shares within 20 days of his death." Fiszman "moved his Arsenal investment into a trust earlier this year." Panja notes a takeover by Kroenke is "unlikely to bring big changes in the way the club operates." Deloitte indicated that Arsenal is the "second-richest English team in terms of revenue, behind Manchester United, and fifth in Europe" (BLOOMBERG NEWS, 4/11).
FANS WANT STAKE: Arsenal Supporters' Trust BOD member Tim Payton said that the fan group, whose members own about 3% of the club, "would oppose a full 100 percent ownership by Kroenke and would want fans to remain shareholders." The AP noted the group has "close links with Arsenal's investors and executives, who have endorsed its low-cost scheme that enables fans to buy small stakes in the club." Fans "can make small contributions to the 'Fanshares' initiative before gaining an actual portion of Arsenal and be given a chance to attend key club meetings" (AP, 4/10).
L.A. Police Chief Charlie Beck Friday said that Dodgers Owner Frank McCourt has "agreed to pay for an increase in the number of LAPD officers patrolling" Dodger Stadium and its parking lots "during and after games," according to Rubin & Shaikin of the L.A. TIMES. McCourt "consented as well to create a computer mapping and crime tracking system for the stadium that is similar to the one the LAPD has used for years to scrutinize crime patterns and hotspots throughout" L.A. Beck said that the Dodgers also have "agreed to revoke the passes of season-ticket holders if they or their guests misbehaved." The changes, which will take effect in time for the Dodgers' next home game against the Cardinals on Thursday, "mark a turnabout for the team" after McCourt earlier this month said that he was "satisfied with the team's security measures." At a news conference Friday with Beck and L.A. Mayor Antonio Villaraigosa, McCourt said that he "fully supported a greater police presence and acknowledged hearing concerns from fans who felt unsafe at the stadium." McCourt: "We are going to provide a safe, family-friendly, fan-friendly environment at Dodger stadium. I promise you that." McCourt also "expressed skepticism that curbing alcohol sales would make a significant difference," saying, "I don't think it's the sale of beer that's a problem, per se. I think it's the abuse of that privilege." But Beck said that he believes "beer and alcohol consumption did, in fact, contribute to the problems at the stadium and said police officials were pushing the Dodgers to raise prices and stop sales at an earlier point in the games." Dodgers officials "have told the LAPD that they are reconsidering their plan to sell half-price alcohol at six games this season," and Dodgers VP/PR & Broadcasting Josh Rawitch said that they also "promised to look at prices and serving sizes for alcohol, as well as when to stop serving alcohol" (L.A. TIMES, 4/9). McCourt: "I've heard the fans and the citizens of this community; they're uncomfortable with the behavior of some at Dodger Stadium. I have one message for the fans and the citizens of Los Angeles: I hear you loudly, and I hear you clearly" (ESPNLA.com, 4/8). USA TODAY's Robyn Norwood reports Beck has "made it clear the Dodgers are no longer calling the shots." Beck: "I will respect the fact the Dodgers are willingly paying for this safety, but I will deploy the resources necessary to keep fans safe" (USA TODAY, 4/11).
IMAGE IMPACT: In L.A., Bill Dwyre notes the Dodgers "return to Dodger Stadium Thursday and chances are decent that there will be more cops than fans." Dwyre: "Poor McCourt. It is hard not to shake your head in wonder at how entangled in negative stuff one person can get" (L.A. TIMES, 4/9). In N.Y., Ian Lovett wrote of Dodger Stadium, "That lingering image of a laid-back urban haven was shattered on opening day, when two people severely beat a San Francisco Giants fan in a parking lot after the game and left him with possible brain damage. The March 31 episode serves as a sobering reminder that Dodger Stadium no longer seems to fit its former image, and that many fans have become uneasy going there" (N.Y. TIMES, 4/10). USA TODAY's Norwood wrote the attack "has resonated loudly" in L.A., "shaking a Dodgers franchise that is one of the city's most venerated institutions but has been dogged by complaints of threatening and offensive behavior at the stadium" (USA TODAY, 4/11).
PREPARING TO STOP RETALIATION: Giants Senior VP/Ballpark Operations Jorge Costa said that the team "will employ 'World Series-level' security measures" for tonight's home game against the Dodgers "to help prevent any retaliatory incidents from the Opening Day beating." ESPN L.A.'s Ramona Shelburne noted today's game is the "first between the two teams in San Francisco since the brutal attack" on March 31. Costa early last week "estimated that the security force for Monday's game would be '15-25 percent' larger than a typical home game," but "after meetings with his staff and San Francisco police on Sunday, he said the size of that force would be even larger, probably 30-40 percent bigger than a typical home game" (ESPNLA.com, 4/10).
The Lions have "made plans for cost-saving measures" due to the ongoing NFL lockout, according to Carlos Monarrez of the DETROIT FREE PRESS. Lions President Tom Lewand: "Immediately there were no staffing changes, no salary reductions, no furloughs and those kinds of things. As this goes on, those become more and more likely, and we do have plans in place for some changes that will occur." Lewand added that "everyone in the Lions' organization -- from the top of the top -- would be affected by the cost-saving measures" (DETROIT FREE PRESS, 4/10).
PLANNING AHEAD: Eagles President Joe Banner Friday said that "right now, the team is preparing for a normal spring and summer, including training camp, as unlikely as that might seem with the NFL in lockout limbo." Lehigh Univ. AD Joe Sterrett last week said that the school "would like to know by around June 1 whether the Eagles are coming for training camp this year." Banner said, "If we got so late, and then a resolution came, that we couldn't do it at Lehigh, we'd just do it" at the team's NovaCare Complex. However, Banner noted that an agreement the Eagles "made with the city and the surrounding neighborhood when the practice facility was built would preclude having the public attend." Banner added that the Eagles are "ready for whatever happens," though he said that the team has been given "no direction from the NFL about what rules would be in place" if the lockout is lifted. Banner: "You're almost running, 'If it goes like this, you do it this way; this, you do it this way.' There's no shortage of work for anybody. Whatever ends up, we'll deal with it" (PHILADELPHIA DAILY NEWS, 4/9).
DEADLINE APPROACHING: In Dallas, Jeff Mosier noted Cowboys season-ticket holders "have until May 1 to pay for their seats, with or without a lockout." Cowboys Dir of Corporate Communications Brett Daniels: "We're moving forward business as usual. We're going to continue to do all of our planning and preparation for the season." Daniels added that he "didn't have details about how the Cowboys' approach compared with other teams" (DALLAS MORNING NEWS, 4/10).
GETTING TOGETHER: Cowboys LB Keith Brooking in an interview with ESPN Radio 103.3 Dallas said that the team's players "plan to hold unsupervised team workouts during the lockout." Brooking added that "fans 'can be assured' the players will be ready for the season even if the lockout eliminates training camp" (SAN ANTONIO EXPRESS-NEWS, 4/9)....Jets QB Mark Sanchez "has invited teammates to the West Coast for workouts near his home in Mission Viejo, Calif." The workouts are "tentatively scheduled for the first week in May" (ESPNNY.com, 4/9).
Pro teams are “promoting more fan days involving religious groups,” and with “more seats to fill during the course of a 162-game season than other sport, Major League Baseball teams are at the forefront,” according to Michael McCarthy of USA TODAY. The A’s will “hold their first Jewish Heritage Night” on May 17, and the Giants are “planning Fellowship (Christian), Jewish Heritage and LDS Family (Mormon) nights.” The Rockies later this season will host “their seventh annual Faith Day for all faiths.” Other MLB teams, including the Marlins, Royals and Phillies, are “planning similar fan days.” In the NBA, the Warriors “held their first Jewish Heritage Night on Sunday, including a Q&A” with Israeli native and Kings F Omri Casspi. But “some question whether these are appropriate in the public arena of sports.” Council on American-Islamic Relations National Communications Dir Ibrahim Hooper “objects because there are no plans for a Muslim Family Day.” American Atheists spokesperson Blair Scott said that “religion and sports is problematic -- not because it's not illegal but … unethical.” But MLB VP/Business PR Matt Bourne said the league has "confidence in our clubs to conduct ballpark promotions that are appropriate in tone and content" (USA TODAY, 4/11).
George Shinn is scheduled to return to New Orleans today "for the first time since he transferred ownership" of the Hornets to the NBA in December, and ahead of the visit he chatted with the TIMES-PICAYUNE's Jimmy Smith about "why the expected sale to minority partner Gary Chouest fell through, why the team accumulated such long-term debt, and the future of the NBA in New Orleans." The following is a portion of the Q&A:
Q: For a long time it seemed that the sale to Gary Chouest was going to go through. Can you tell the fans what happened and why did the deal fall through?
Shinn: I can’t really respond to what was going on in Gary’s mind, because it wouldn’t be fair for me to do that. ... I suppose the timing was just not right for him. But the timing was right for me. I’m just trying to look forward to my future, doing things with my foundation. After going through this cancer scare, I just made the decision that this was something I had to do to help my kids get their life in order, put together a trust for them so they could get their lives going instead of all of us clinging to the team.
Q: Did you have offers from other suitors during that period? It has been reported that Oracle CEO Larry Ellison wanted to buy the team and potentially move it to the West Coast.
Shinn: Larry made a public statement that he had made an offer for $350 million. And that’s true. He did. I still have the offer signed, but I just couldn’t do it. I could not sell it to him. I could have gotten $50 million more for the team. But I just couldn’t do it. I knew his goal was one thing. He wants a team, but he wants it in California.
Q: As things were breaking down with Gary, did he articulate to you any reasons as to why he was changing his mind?
Shinn: The final deal I got with the NBA, Gary turned that offer down. I cannot even begin to say why. But I know there were a lot of things on his plate. It would be unfair for me to speculate. I’m grateful for Gary Chouest. If it hadn’t been for him, and him buying part of this team, I probably would not have had the money to move this team back.
Q: Do you think this team can survive here given the right set of economic circumstances?
Shinn: I believe with good marketing, New Orleans would support this team. You have to make some right decisions, get good partners and you could make this work. I firmly believe it can make it. I know there’ve been remarks about the size of the market, and after Katrina it has been damaged. But when we came back, the year we had our best record ever and won our division, it was great. It just proves it can work. It will work (New Orleans TIMES-PICAYUNE, 4/10).
In Atlanta, Chris Vivlamore noted the Thrashers' game against the Penguins yesterday could have been "more than the last game of the season; it could be the final one for the franchise." The Atlanta Spirit ownership group "has stated publicly it would prefer to keep the Thrashers here and is first looking for a buyer who will stay," but "relocation is a serious possibility." There have been "non-disclosure agreements signed between ... interested entities and the investment company, the Raine Group, hired by the Spirit to search for potential buyers or investors," but there have been "no serious negotiations beyond that preliminary step to date." Sources confirmed that the process "has not moved past that stage," and Vivlamore wrote there is a "big difference between expressing interest and having the financial ability to reach an agreement." Some groups have "expressed interest in buying" the Thrashers, Hawks and Philips Arena from Atlanta Spirit, but the "possibility of the sale of all three properties, the most likely scenario for the Thrashers to remain in Atlanta, has been described as 'one in a million' and 'one percent'" (ATLANTA CONSTITUTION, 4/10).
RETURN OF THE BEAR: The Bruins have launched a "new ad that aims to crank up the fan base" ahead of the team's appearance in the Stanley Cup Playoffs. Titled "Where Do Bears Go?," the ad "features the Bruins mascot and some tasteful rest-room humor." The spot was created by Boston-based Mullen, which has "done recent work for the Bruins" (BOSTON.com, 4/11).
SURPRISING EXTENSION: In Ottawa, Wayne Scanlan reported the Senators announced a contract extension for GM Bryan Murray Friday at a "hastily called media conference." There had been talk of Owner Eugene Melnyk and Murray "hashing things out, or Murray accepting some lesser role away from the front lines." But if there was an "internal struggle between Murray and non-hockey management types with the Senators, Murray won the battle" (OTTAWA CITIZEN, 4/9). In Boston, Kevin Paul Dupont noted "betting around the league for months has been that the Senators would turf" Murray "at the end of this season, if not sooner." But Melnyk, "as he is wont to do, surprised everyone" by extending Murray's contract (BOSTON GLOBE, 4/10).
TALE OF TWO CITIES: In St. Paul, Tom Powers writes under the header, "No Quick Fixes For Down-And-Out Wild." Powers: "There are more non-sellout nights than sellout nights. The salary cap has risen. The team isn't good enough to raise ticket prices. There are no revenue-producing playoff series on the horizon." The franchise also is "cutting corners," as Owner Craig Leipold recently "ditched five employees from the business side of his hockey-arena operations in an effort to cut expenses" (ST. PAUL PIONEER PRESS, 4/11). Meanwhile, in L.A., Steve Galluzzo noted the Kings' final regular-season home game against the Ducks Saturday marked the team's "18th straight sell out and 35th of the season." The Kings averaged a "franchise-best" 18,080 fans this season at Staples Center (LATIMES.com, 4/9).