SBD/June 16, 2011/FranchisesPrint All
Mets Senior VP/Marketing & Communications David Newman said that a Forbes report claiming prospective investor David Einhorn could gain control of the team in three years for $1 "wasn't accurate," according to Mark DeCambre of the N.Y. POST. Einhorn's agreement to buy a minority stake in the Mets for $200M included "an option to increase" his share in three years, and the report indicated that the "option price is $1." But Newman said, "Like many other media reports related to the terms of a potential agreement, (this one) is again simply false." Newman declined to elaborate on "what in the report was false." A spokesperson for Einhorn declined comment, but sources said that the $1 price is "off-base without offering details, because the negotiations are still in flux" (N.Y. POST, 6/16). In the original report, FORBES' Mike Ozanian noted Einhorn's deal with the Mets calls for him to "pay $200 million for a one-third stake in the Mets and would have the right to obtain a 60% interest in three years unless” team Owners Fred Wilpon and Saul Katz “returned the $200 million to Einhorn but allowed” him to retain his 33% ownership. A banking source said the "strike price" for the 60% stake is $1. Ozanian wrote while the deal is "not final and is subject to the approval of MLB, its terms underscore the desperation of Wilpon and Katz" (FORBES.com, 6/15).
CONFLICTING NUMBERS: In N.Y., Andy Martino cites sources as saying that Einhorn's agreement, "expected to be finalized before the All-Star Game," allows him to "double his 33%, $200million stake to 66% if Fred and Jeff Wilpon and Saul Katz do not buy him out for his original investment within five years." If the Wilpons and Katz "do buy him out, Einhorn will pay $1 to retain a one-sixth stake in the team," not the 33% that has been reported (N.Y. DAILY NEWS, 6/16). ESPN N.Y.'s Adam Rubin also cited a source as saying that Einhorn "would still retain one-sixth of the team" if the Wilpons and Katz return his $200M initial investment. Additional sources said that Einhorn “is shielded from any obligations should the Wilpons have an unfavorable resolution in the Ponzi scheme case” (ESPNNY.com, 6/15).
Cubs Chair Tom Ricketts addressed the media yesterday "after weeks of conspicuous public silence in the face of rising heat over his management team and team finances," and he said that GM Jim Hendry's job "is safe and the team's debt won't preclude signing free agents," according to Gordon Wittenmyer of the CHICAGO SUN-TIMES. The Cubs reportedly are one of "nine teams not in compliance with Major League Baseball debt-service rules," but Ricketts said it is a "non-story." He added that the debt-service rule issue is a "function of the terms" of his purchase of the Cubs and that the commissioner's office "is satisfied with the Cubs' financial condition." Ricketts: "What every fan should know is that nothing in the capital structure, in the balance sheet or any of the debt will in any way limit our ability to put a good team on the field." Wittenmyer notes Ricketts "refused to get more specific than that about the player-spending issue, saying the decision to commit a multiyear free-agent contract at eight figures a year is up to" Hendry. He "declined to say whether payroll would be cut for the third consecutive winter." Meanwhile, Ricketts responded to MLB Network and NESN analyst Peter Gammons recently calling Wrigley Field a "dump." Ricketts said, "Obviously we don't believe it's a dump. ... That said, we know that it can be improved. We know we've got a lot of work to do to preserve it and improve it for the fans." Ricketts added of the team's drop in attendance, "There are a couple of factors -- obviously the economy and obviously the weather, but the most important thing is I'm not worried about the attendance because if we win, we'll be full" (CHICAGO SUN-TIMES, 6/16). ESPN CHICAGO's Sahadev Sharma notes the Cubs have "nearly $40 million in expiring contracts coming off" the team's payroll at the end of the season. But Ricketts said, "Even if we knew where (payroll) was going, we wouldn't talk about it. We don't talk about payroll" (ESPNCHICAGO.com, 6/15). In Chicago, Paul Sullivan notes some have argued the Cubs "need to bring in a seasoned baseball executive to replace President Crane Kenney at the top of the front office and oversee Hendry." But Ricketts said, "I've never bought into the (idea) that I should have a baseball guy to watch my baseball guy and his baseball guys" (CHICAGO TRIBUNE, 6/16).
ON THE BRIGHT SIDE: Ricketts on CNBC yesterday said, “The commissioner came out and the league is completely comfortable with our debt structure. The Cubs are an investment grade credit. The important thing people have to know is that nothing in our debt structure and nothing in our balance sheet is in any way affecting our ability to put a team on the field. It's really just a technicality driven by the structure of the transaction and nothing more than that. There's nothing to worry about.” Meanwhile, Ricketts said, “Obviously, the Cubs do have one of the highest payrolls in the National League and one of the highest payrolls in all Major League Baseball and we haven't gotten the kind of performance on the field that we were looking for.” He added, “We’re working on the organization as a whole,” investing in Spring Training facilities in Arizona, development facilities in the Dominican Republic and “doing everything to build a better organization” (“Closing Bell With Maria Bartiromo,” CNBC, 6/15).
NOT A CAUSE FOR AMUSEMENT: In Chicago, Melissa Harris reports after a "routine audit that covered years when" Tribune Co. owned the Cubs, Cook County notified the team that it "owed as much as $1.5 million in back amusement taxes, plus interest and penalties." Sources said that the dispute "centers around amusement taxes on Wrigley Field's approximately 65 luxury suites." Cook County reduced its request to "about $570,000 and is awaiting a ruling from the bankruptcy judge." The county has also "begun an audit of amusement tax payments under the Ricketts regime." The Bears have "encountered the same problem" with the 133 suites at Soldier Field. Sources said that the team is "protesting its larger amusement tax bill and is awaiting a ruling on the dispute from an administrative law judge." Harris notes a county ordinance states that "admission-related fees are subject to the amusement tax." But what is in dispute is "when parking, food and other amenities are included in a luxury suite bill -- as they sometimes are at Wrigley and Soldier fields." Cook County "contends they are" subject to the tax (CHICAGO TRIBUNE, 6/16).
MLB Commissioner Bud Selig's office "has extended its investigation into the Dodgers beyond the scrutiny of financial documents by soliciting interviews with former team executives," according to sources cited by Bill Shaikin of the L.A. TIMES. The league's investigation "is now nearing its conclusion, bringing a possible end to the ... questions about whether Dodgers owner Frank McCourt will make payroll." The sources indicated that "at least some of the interviews with former McCourt employees have included questions about Dodger Stadium security." It is unclear "how many former McCourt employees were asked to speak with investigators and how many agreed to do so." Shaikin notes McCourt "generally requires employees to sign a confidentiality agreement that prevents them from discussing the Dodgers' business even after they no longer work for the team." Meanwhile, McCourt and his ex-wife, Jamie, are set to return to court today "for the final scheduled session of divorce settlement negotiations" (L.A. TIMES, 6/16).
YOU'VE GOT A FRIEND IN NEED: YAHOO SPORTS' Tim Brown noted in the "midst of unsightly malfunctions of franchise and marriage, leading to Selig’s seizure of the Dodgers’ financial operations almost two months ago, McCourt has engendered the public sympathy of some principals in the African-American and Hispanic communities." Twenty L.A.-area ministers, "many African-American, sent a letter recently to the commissioner’s office in support of McCourt." Political advocate Antonio Gonzalez and a "handful of Latino leaders have done the same." Gonzalez, President of the William C. Velasquez Institute, said that McCourt "forged a relationship with the Hispanic community, partly by refurbishing 13 mostly inner-city sandlot fields while also supporting programs run by his and other agencies." Gonzalez said that the Dodgers "understand his neighborhood for the first time in generations" (SPORTS.YAHOO.com, 6/15).
WAITING IN THE BULLPEN: ESPN MLB analyst Orel Hershiser earlier this month revealed he had joined a prospective ownership group, led by fellow former Dodgers star Steve Garvey, that said it is "researching opportunities that could arise or already exist." ESPN L.A.'s Ramona Shelburne noted Hershiser essentially was "letting everyone know that he's willing to play the role Nolan Ryan so ably played for the group that bought the Texas Rangers last year." Since revealing his role in Garvey's group, Hershiser's phone "has been ringing off the hook." He did not "expect the kind of heavy-hitters with the capital to fund a realistic ownership bid, to track him down so quickly." Hershiser: "There are tremendous people that have a tremendous amount of money that have a heart for the Los Angeles Dodgers." Shelburne wrote the Dodgers "clearly haven't worked under McCourt's ownership," and Selig "has already come out to the mound." Shelburne: "But so far, no call has been placed to the bullpen to get the team out of this wretched jam" (ESPNLA.com, 6/15).
Devils investor Ray Chambers is "in talks to sell his piece of the team" to majority Owner Jeff Vanderbeek, according to Josh Kosman of the N.Y. POST. Chambers controls 47% of Devils Arena Entertainment -- which owns the team and operates Prudential Center -- and a source said that he is in talks with Vanderbeek "on a deal that is likely to be priced at less than $200 million." Chambers "put his stake on the market back in February and was seeking about $250 million," but sources indicated that "there were no takers at that price." A source said that there is a "clause in the deal between the two sports investors that could force Vanderbeek to buy Chambers' stake at a given price," but the two "hope the current talks make enforcing that clause moot." Vanderbeek "does not have the money to finance the purchase of Chambers' stake," and sources said that he has "brought on board outside investors to help close the deal." Kosman notes in the FY ending July 1, Devils Arena Entertainment is "expected to report a modest" profit. That would be the company's "first year in the black in its four-year existence" (N.Y. POST, 6/16).
Heat F LeBron James and Liverpool are "at the center of a push" by Fenway Sports Group to "increase its commercial revenue around the world," according to Tariq Panja of BLOOMBERG NEWS. Both James and the EPL club are "heading to Asia on promotional tours in the coming weeks." Liverpool will play exhibition games in Malaysia and China in July "before James’s four-city trip across China, where basketball’s popularity outstrips soccer's." FSG signed a deal in April to rep James, and Fenway Sports Management co-Managing Dir Billy Hogan said, "The reception we’ve had from companies and corporations has been extraordinary over the last couple of months of our partnership with LeBron." Panja noted Liverpool is FSG's "latest acquisition and the one that’s needed the most attention." The club's management has been reorganized, with the promotion of Commercial Dir Ian Ayre to Managing Dir Hogan said that the "focus is on getting sponsorships" such as the team’s jersey deal with Standard Chartered. Rival Manchester United "has been successful in getting sponsors after expanding its sales office in London," and Liverpool is "trying to mimic that success." FSG also is "trying to increase American fans’ awareness of Liverpool." Hogan revealed that a U.S. tour next summer is "being discussed although details can’t be completed until next season’s baseball schedule is known." Hogan also said that Liverpool "may consider selling naming rights to its proposed new stadium" (BLOOMBERG NEWS, 6/15).
FOXSPORTS.com's Alex Marvez wrote the Dolphins are "no longer the ruling franchise in South Florida sports." While the Heat lost in the NBA Finals, just reaching the championship "spurred impromptu street celebrations and a mania the Dolphins haven’t seen in decades." In addition, TV ratings "dwarfed what the Dolphins usually draw even against archrivals." South Florida "has embraced the Heat and will pay the same kind of close attention to their offseason personnel moves that was once given to the Dolphins." Dolphins CEO Mike Dee: "One team’s success does not have to come at the expense of another team’s success. We have to take care of what we can take care of. That’s putting a quality product on the field, marketing aggressively and making Sun Life Stadium a desirable place to come" (FOXSPORTS.com, 6/15).
ACE IN THE HOLE: In N.Y., Micheline Maynard notes Tigers P Justin Verlander is the team's "biggest drawing card, providing a reason for fans to climb into their cars and drive hundreds of miles from across the state and other parts of the Midwest to watch him on the mound." Verlander is second in the AL with eight wins and first in strikeouts, and Tigers fans "turn up in bigger numbers on nights when he pitches than when he doesn’t." In his seven home starts this season, the Tigers have "averaged 26,981 fans; in the 27 without him, the team has averaged 21,844" (N.Y. TIMES, 6/16).
JUST THE WAY YOU ARE: The Toronto City Council yesterday "iced any support for a second NHL team." The Council "faced off on a recommendation from the city’s economic development committee asking to send a letter to the National Hockey League expressing City Hall’s support for another hockey franchise in Toronto" in the wake of the Thrashers moving to Winnipeg. City Council member Josh Colle argued that "his motion was Toronto’s chance to make a powerplay for a team which would be an economic win for the city and not hurt" the Maple Leafs (TORONTO SUN, 6/16).
IF IT SUITS YOU: Jaguars coach Jack Del Rio last night said that he "might wear a suit on the sidelines again this fall, especially with two home Monday night games on the schedule." Del Rio "did that a few years back and then abandoned the idea" (FLORIDA TIMES-UNION, 6/16).