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SBD/November 28, 2011/FranchisesPrint All
The Ontario Teachers’ Pension Plan Friday confirmed that it has “pulled the plug on its auction process” to sell Maple Leaf Sports & Entertainment, according to Perkins, Robertson & Erman of the GLOBE & MAIL. Canada’s two largest telecommunications firms, BCE and Rogers, “teamed up on a last-ditch effort in recent weeks to buy” MLSE, but disagreements between the two “dissolved the alliance and killed the deal.” The companies “were prepared to pay between” C$1.3-1.4B for the OTPP’s 79.5% stake in MLSE, and would have “split the price down the middle.” Neither firm “wanted to gamble on a hefty takeover of MLSE, but neither firm was willing to risk letting the valuable assets go to their rival.” They knew that even if they could, “they faced another hurdle: Winning over [MLSE Chair] Larry Tanenbaum, owner of the remaining 20.5 per cent.” Dividing up the broadcast and Internet assets “would require his approval in order to change MLSE’s shareholders' rights agreement.” A number of private equity firms also “took a look at MLSE.” The OTPP is believed to have “had an unofficial asking price of about [C]$1.8-billion, and said from the start it would hold onto its stake if bids didn't meet expectations” (GLOBE & MAIL, 11/26). In Toronto, Alphen & Westhead cited sources as saying that the OTPP “would likely consider selling the stake again if someone stepped up with a blockbuster bid and could stickhandle around key obstacles.” A source said, “It’s off the market but the next announcement could be a sale” (TORONTO STAR, 11/25). Also in Toronto, Rob Longley noted unless someone “is willing to overpay, it won’t necessarily be happening soon” (TORONTO SUN, 11/25).
SKATING AWAY: In N.Y., Josh Kosman wrote Hockey HOFer Wayne Gretzky “has been shut out in his attempt to have his investor group gain control” of MLSE. A source said that Gretzky, “who fronted private-equity powerhouse Providence Equity Partners and its $1.5 billion offer … had their shot at NHL ownership slapped aside” by league Commissioner Gary Bettman. The source said that Bettman “would not bend the league rules that allow a team owner to borrow only up to 50 cents for every dollar of team value -- and rejected the offer.” However, another source said that it “was not the NHL that slapped away the Gretzky/Providence bid” (N.Y. POST, 11/26). Gretzky's agent, Darren Blake, yesterday said that Providence "never approached him and the other groups that did were 'people kicking tires.'" The GLOBE & MAIL's David Shoalts reports almost "all of the discussions -- and they were all informal -- about Gretzky taking a role with MLSE were with" Toronto-Dominion Bank, a company Gretzky endorses (GLOBE & MAIL, 11/28).
WHAT'S NEXT? In Toronto, Rick Westhead cited sources as saying that MLSE “is planning to move ahead and develop a regional sports channel that would show Maple Leafs, Raptors and Toronto FC games.” The “surest sign that Maple Leaf Sports is plotting a new network is the company’s hiring” of sports media consultant Ed Desser, who has helped Time Warner plan its own RSN in L.A. Several TV execs said that a Maple Leaf Sports channel "could expect to get about" C$1.50 per subscriber "at most in its first contract." While the channel “might show Maple Leafs and Raptors games during the winter … it’s unclear what the channel would broadcast during the summer months.” Meanwhile, sports industry execs said that “a search committee formed by Maple Leaf Sports to find its next chief executive is considering” former Canadiens President Pierre Boivin for the job. MLSE President & CEO Richard Peddie “will retire by year’s end” (TORONTO STAR, 11/27). The GLOBE & MAIL's Shoalts reports the "front-runner internally" is Exec VP & COO Tom Anselmi, who "will either be named acting president or assume Peddie’s duties and keep his title as COO in a sort of audition for the top job until a permanent president is named." The rest of the management team "will remain in place" (GLOBE & MAIL, 11/27).
Hockey HOFer Brett Hull "has expressed interest in being part of Tom Stillman's investment group that is seeking to buy" the Blues, according to sources cited by Jeremy Rutherford of the ST. LOUIS POST-DISPATCH. Hull is "not officially part of the group, but his intent has been communicated to the league and to Stillman, who is currently the Blues' minority owner." Sources believe that Hull "has a desire to become more than an investor in Stillman's group, and in fact, could have a role within the organization." Stillman "appears to be watching and waiting to see what happens" with Chicago businessman Matthew Hulsizer's bid for the franchise. Stillman "has made at least two offers to buy the Blues, but both were rejected." The addition of Hull "would add significant star power to what is already a well-known group of local investors" (ST. LOUIS POST-DISPATCH, 11/27).
WISHING UPON A STAR: The GLOBE & MAIL's Mirtle & Ebner wrote new Stars Owner Tom Gaglardi "has already helped to bring some good vibrations to a market that for years was considered the NHL’s shining success story in the U.S. sunbelt." Step 1 "was to rehire Jim Lites as team president." Step 2 "was reassuring players and fans that Gaglardi would spend enough to win, putting success on the ice and at the gate above the type of bean counting that has hurt the franchise the past few years under troubled former owner Tom Hicks." Gaglardi said, "This isn't a franchise that's never been up. It's been up for most of its existence, and it lost its way in the last three years. ... This market is too good for me not to get involved" (GLOBE & MAIL, 11/26).
Jazz CEO Greg Miller Wednesday said his family has "absolutely no intention of selling the team," according to Brian Smith of the SALT LAKE TRIBUNE. Miller, responding to a recent report the Jazz could be sold, said, "I get frustrated whenever I see that. Because my Dad [the late Larry Miller] has said since he bought the team in 1985 that the Jazz will be a part of the Salt Lake landscape and the Utah landscape as long as they're not a burden on the other businesses that we depend on to keep our employees employed and feed our families and so on." He added, "I'm going to echo what my Dad said: If it ever gets to the point where it's a burden, then we'll reserve the right to do what we need to do to protect our other interests. But we're not even in the realm of consideration of that right now. And I must add that is due primarily to wonderful support from our fans and wonderful support from our sponsors" (SALT LAKE TRIBUNE, 11/27).
PLAYING A NEW TUNE: In Utah, Randy Hollis noted the Jazz "will benefit greatly from a more generous share of the BRI" under the NBA's new CBA. It will give a small-market team like the Jazz a "huge financial boost which will help offset the type of losses the franchise was forced to endure last season -- reportedly around $17 million." Adding in the CBA's "new-and-improved salary cap restrictions/luxury tax penalties along with its revenue sharing possibilities, it should not only make the Jazz franchise increasingly solvent and profitable, but help put Utah's front office in a better position to make the team increasingly competitive in the future." All of these factors "would help improve the league's competitive balance and serve to give a team like the Jazz an enhanced opportunity at possibly winning an NBA championship" (DESERET NEWS, 11/27). Also in Utah, Kurt Kragthorpe wrote, "Utah needs the Jazz to play basketball, beyond any economic factors. The team is a unifier, a rallying point" (SALT LAKE TRIBUNE, 11/27).
In Sacramento, Bizjack & Kasler wrote the potential resolution to the NBA lockout “comes at a key moment” for Mayor Kevin Johnson’s effort “to finance a downtown arena to replace aging Power Balance Pavilion and persuade” Kings Owners the Maloof family to keep the team in Sacramento beyond this season. The NBA and the Kings have given the city “until March 1, 2012, to put an arena financing deal together or risk seeing the Kings move.” Johnson and the City Council on Dec. 13 “are expected to discuss whether the city can contract to have a private company run the city’s downtown parking operations in exchange for upfront cash to jump-start arena financing” (SACRAMENTO BEE, 11/27). Also in Sacramento, Ailene Voisin wrote the "tentative labor agreement reached in the wee hours Saturday gives the Kings another chance ... to compete again." But the small-market owners "arm-wrestled their bigger colleagues for a reason: This is their league, too" (SACRAMENTO BEE, 11/27).
A WIN FOR THE SMALL MARKETS: When asked if a new CBA would make the Hornets "more financially attractive" to a potential new owner, Tulane Sports Law Program Dir Gabe Feldman said, "I think there's no question. I think it makes it more attractive for all owners, but particularly an owner for the Hornets. I think first of all the fact that the lockout is now almost over, and revenues will start coming in. And there is a system that does make it easier for a team for like the Hornets to compete on and off the court" (NOLA.com, 11/26). In Indianapolis, Bob Kravitz wrote with the new deal the Pacers "have won," and so have "all the league's small-market, small-revenue teams -- the Hornets and Bobcats, the Kings and the Bucks and several others." Kravitz noted, "We will have a reconstituted NBA that gives the little guys a better chance to compete with the L.A.s, New Yorks and Bostons." The small-market "excuse -- 'we just can't compete when Mark Cuban is paying all that money' -- is going to ring more hollow than ever" (INDIANAPOLIS STAR, 11/27). In Memphis, Geoff Calkins wrote any deal "that reduces salaries, shortens contracts and makes it harder for big spenders to compete for free agents -- all things that this deal should do -- is ultimately good for the Grizzlies" (Memphis COMMERCIAL APPEAL, 11/27). Memphis Mayor AC Wharton said, "I want to encourage every Memphian and every Grizzlies fan to get behind our team and support them during this abbreviated season" (Memphis COMMERCIAL APPEAL, 11/27).
DEEP-POCKETED TEAMS: In L.A., Mike Bresnahan writes the Lakers "were one of the teams targeted by small-market owners and NBA officials in the proposed" CBA. The club faces "an incredibly steep tax designed to instill more league parity and less spending by deep-pocketed teams." The Lakers' payroll last season "was $91 million, the NBA's largest, and they paid an additional $21 million in penalties because they were that far over the tax threshold." In two years, a $91M payroll "would cost the Lakers a staggering $68 million in additional taxes." Under the new agreement, teams that cross the tax threshold "four times in a five-year span will also be hit with a 'repeater tax,' an additional dollar-for-dollar penalty on top of any existing penalties" (L.A. TIMES, 11/28). In West Palm Beach, Ethan Skolnick wrote Heat Owner Micky Arison "had a different agenda than many other owners." That does not "diminish from the brilliance of his positioning during the lockout." Plenty of players, especially veterans, "around the league were paying attentions, and they now know for sure that he's friendly to their cause" (PALM BEACH POST, 11/27). In Miami, Dan Le Batard wrote if making money was his goal, Arison "would have been better off with the previous, broken system than he is with this one." He is going to have "to share revenue now." He is going "to have to pay a luxury tax." But Arison "isn't in this game for money. He is in it for fun, for sport, a fan like the rest of us" (MIAMI HERALD, 11/27).
WELCOME RELIEF: In Toronto, Ryan Wolstat wrote the Raptors "needed a season." With attendance "sinking like a rock and on the heels of an uninspiring 60-loss campaign, the team could not afford to alienate the many casual basketball fans it will need to get back on board in order to get attendance back up to snuff." The hardcore, dedicated hoops fans "will always return, but the thousands of harder sells might have balked at paying top dollar in 2012-13 if the lights remained dark" (TORONTO SUN, 11/27). Meanwhile, in N.Y., Tom Spousta wrote "few NBA cities viewed the news of a labor agreement with more welcome relief" than Oklahoma City. The Thunder sent letters "to its approximately 4,000 season-ticket holders (representing 14,000 seats) and offering a choice to leave their money on account at 5 percent interest or receive monthly refund checks." About 85% of those fans "reportedly chose to let the Thunder hold their money" (N.Y. TIMES, 11/27).
RECONNECTING: In Milwaukee, Charles Gardner cited a source as saying that Bucks officials and members of the team's sales and marketing departments "were scheduled to meet Sunday to begin the process of reconnecting with season-ticket holders, reaching out to potential new fans and coming up with new marketing ideas to ignite interest after a long layoff." The source said the Bucks had a "30-day plan ready to be put in place to get ready for the beginning of the compressed season." Bucks staffers yesterday took "calls from fans who have questions about their season-ticket packages or are considering renewing their ticket packages" (MILWAUKEE JOURNAL SENTINEL, 11/27). In St. Paul, Tom Powers wrote, "I think the public will give [the T'Wolves] the benefit of the doubt." If the team looks "halfway decent, the love train could continue to roll." If they look like "the same old Wolves, people will turn away quickly" (ST. PAUL PIONEER PRESS, 11/27).
SAC Capital Advisors Founder Steven Cohen is "planning a bid" for the Dodgers, according to sources cited by Futterman & Zuckerman of the WALL STREET JOURNAL. Sources said that Cohen "has been discussing the bid with" Allen & Co. Managing Dir and former MLB Deputy Commissioner Steve Greenberg, who is helping broker the sale. Cohen has "close ties to the leaders" of MLB. Federal court documents indicate that Cohen's firm has "surfaced repeatedly in a wide federal investigation into insider trading." But there have been "no accusations of wrongdoing against either Mr. Cohen or SAC Capital Advisors." Sources said that normally "any link to such an investigation, no matter how peripheral, could spell trouble for a bidder under MLB's approval process." Sources also said that MLB plans to "size up potential bidders during the next six weeks." Bid books "are scheduled to be distributed shortly after Thanksgiving, with the first round of bidding planned for early January" (WALL STREET JOURNAL, 11/25).
TV TALK: Fox Sports Wednesday argued in a court filing that if outgoing Dodgers Owner Frank McCourt "wants to boost the sale price of the Dodgers, he ought to include the Dodger Stadium parking lots in the sale instead of tearing up an existing contract with" the RSN. In L.A., Bill Shaikin noted Fox again "urged the U.S. Bankruptcy Court to deny McCourt's proposal to market the team's television rights as part of the sale process." The creditors' committee on Wednesday "supported the Dodgers' bid to market their television rights." When McCourt initially proposed an early auction of the Dodgers' television rights, "he was opposed by his ex-wife, the creditors, Major League Baseball and Fox." Now that McCourt "has agreed to sell the Dodgers, he has neutralized all of those parties except for Fox" (L.A. TIMES, 11/24).
The Buccaneers "announced sweeping changes Wednesday in the pricing and structure of the team's 2012 season tickets," according to Stephen Holder of the ST. PETERSBURG TIMES. The team said that prices on 80% of the seats at Raymond James Stadium will be "reduced next season while others will remain flat for a fourth consecutive season." The Bucs are "taking steps to increase attendance at their home venue, where sales have been sluggish during the past several seasons." General admission tickets for kids that "currently sell for $17.50 will be reduced to $15, and some adult general admission tickets that currently cost $35 will be reduced to $30." Discounts for season tickets versus individual games "will be larger, in some cases as much as 45 percent." Some lower-level end zone seats, "which currently cost $89, will be reduced to $75 per game." In addition to reduced prices, there will also be "perks the team hopes will appeal to fans, including meet-and-greets with players, free wireless Internet access and exclusive events limited to club-seat purchasers." The food and beverage discount offered to season-ticket holders will "increase to 15 percent from 10 percent, and the 10-month payment plan returns for a second straight year." (ST. PETERSBURG TIMES, 11/24).