SBD/August 12, 2013/Franchises

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  • Harris' $240M Deal For Devils Awaiting Approval From NHL Owners, Creditors

    Creditors, including the NHL, are owed more than $60M from the Devils

    76ers Majority Owner Josh Harris “agreed to the price tag” of about $240M for the Devils, but approvals “still need to come” from NHL owners as well as creditors, according to sources cited by Wolff & Giambusso of the Newark STAR-LEDGER. A source said that the deal “could be finalized in the next week.” Wolff & Giambusso note the package “includes the right to run the Prudential Center and reap the benefits of a full slate of concerts and other events.” The balance sheets “could not have looked too attractive” with a $161M debt to the banks and two loans that enabled Devils Owner Jeff Vanderbeek to "meet basic expenses over the last several months.” The organization owes the NHL $34M and another $30M to Philadelphia attorney Andrew Barroway, who also was “trying to buy the team” (Newark STAR-LEDGER, 8/11). In New Jersey, Tom Gulitti reported Vanderbeek “might still end up with a minority share but will no longer be the one in control after years of fighting to keep the cash-strapped Devils afloat under a growing debt.” Vanderbeek had “hoped to remain the principal owner by bringing in new minority partners with an infusion of capital,” but when that plan “fell through, financial concerns forced his hand into seeking buyers for a controlling interest in the team." The '12-13 NHL lockout and the fact that the Devils missed the playoffs last season were "the final blows," as the team was denied "much-needed postseason revenue” (Bergen RECORD, 8/10).

    END OF AN ERROR?
     In Newark, Craig Wolff wrote Harris is “arriving to rescue an organization steeped in its own financial troubles.” It was “widely reported that the loan established Barroway as the favorite to buy the team, but talks between Vanderbeek and Harris apparently intensified" last week. The sale to Harris would “close an eight-year chapter for the Devils with Vanderbeek as the majority owner -- a period that began with audacious dreams of transforming an organization, successful on the ice but seemingly adrift, playing in the Meadowlands, without a real identity.” Vanderbeek “fulfilled his ambitions, bringing the Devils to Newark, building the Prudential Center and adding a buzz to the city’s downtown.” But he "squabbled with city officials over just about everything" (Newark STAR-LEDGER, 8/10).

    Print | Tags: Franchises, New Jersey Devils, NHL
  • Wilfs' Legal Issues Could Jeopardize Public Funding For Vikings' New Stadium

    Minnesota Gov. Mark Dayton’s “harsh review” of the legal issues surrounding Vikings Owner Zygi Wilf and others in his family is “igniting fresh concerns about the state’s agreement with them and threatens to complicate” the team's new downtown stadium project, according to Ragsdale & Meryhew of the Minneapolis STAR TRIBUNE. The "sudden blowup is emerging" as Minnesota Sports Facilities Authority board members and team officials are "finalizing a critical menu of details, such as who will control stadium construction, pay for cost overruns and set terms for the seat licensing deals for fans." All details "must be worked out over the next two weeks, before the state sells taxpayer-backed bonds to pay its share." MSFA board member Duane Benson said, “Everybody is on high alert that this is going to be looked at under a fine microscope. The governor is not going to, nor are we going to, treat this lightly. A lot of legislators will be watching this very closely, as well we should." Dayton on Friday said of the Wilfs' lawsuit, "The judge’s decision means the stadium authority’s legal counsel and their financial advisers need to renew their due diligence and really go back and review the representations made by the team and by the owners. It’s very distressing.” Ragsdale & Meryhew noted the Wilfs and the NFL are “working to assure the state that the project is on track.” The Wilfs are asserting that the legal troubles "have no bearing on the stadium agreement or their ability to fulfill their financial commitment.” Some lawmakers, who were “already skeptical that the state drove a hard enough bargain, are renewing calls for state leaders to walk away -- or at least take time to cool off and take a tougher look at the stadium agreement” (Minneapolis STAR TRIBUNE, 8/11).

    Print | Tags: Franchises, Minnesota Vikings, NFL
  • Rays' On-Field Success Not Translating To Big Numbers At The Gate

    This season's tight AL East race has done little to help the Rays' attendance

    The Rays are averaging the second-worst attendance in MLB this season, and there is "no ready-made solution on the horizon," as the team is "locked in a lease" with St. Petersburg to play at Tropicana Field through '27, according to Scott Cacciola of the N.Y. TIMES. The team "depends heavily on ticket sales to subsidize player payroll," and that has "cost them." The Rays' $62M payroll is the lowest in the AL, so they "have to be spot on with their personnel decisions." While the Rays began today just three games out of the AL East lead, they continue to draw "small crowds." It is a "continuing battle," and the Rays’ marketing department "has done yeoman’s work" (N.Y. TIMES, 8/11). Meanwhile, in Tampa, Stephen Nohlgren noted if TV ratings "maintain their present pace, Rays viewership for 2013 could finish among the top third" in MLB. But what is "less clear is whether the Rays will ever be able to cash in on that popularity." Bevilacqua Helfant Ventures co-Founder & CEO Chris Bevilacqua said that the Rays "remain on the outside looking in." Bevilacqua noted the Rays have several years left on their current TV contract, which was signed in '08 before "TV revenues exploded." He said, "Now they have an under-market deal and they have to compete with all these teams that have five times the resources." Nohlgren noted Fox remains the "only sports network with cable and dish channels throughout the region." It is "like the Rays have a rare antique to sell, but only one person might be buying" (TAMPA BAY TIMES, 8/11).

    Print | Tags: Franchises, Tampa Bay Rays, MLB
  • SBD/SBJ Countdown To Top Minor League Market: No. 1 Toledo

    SBD and SBJ today unveiled our biennial ranking of the country’s top minor league markets among more than 225 communities nationwide. It is a project that takes into consideration more than 400 teams and close to 50 leagues as well as almost 250 million fans in total minor league attendance over the past five seasons. The countdown to No. 1 is complete, with Toledo, Ohio claiming the top spot. 

    HOLY TOLEDO! Overcoming obstacles, rebounding from difficult circumstances, responding to challenging times -- all of that is part of the pathway to No. 1. Such is the case, too, for Toledo, Ohio, which stands atop our 2013 ranking of the nation’s Top Minor League Markets. Despite the economic challenges of the market, total minor league sports attendance in Toledo has increased 35 percent over the past five years, and fans have filled a combined 79 percent of all available seats. Triple-A Int’l League Toledo Mud Hens President & GM Joe Napoli said the Mud Hens’ season-ticket base is around 3,000, or one-third of the seats at Fifth Third Field. ECHL Toledo Walleye season-ticket holders make up about one-quarter of the capacity of 8,000-seat Huntington Center. Adding to the strength of the marketplace is the fact that the teams’ operating group is a nonprofit entity, and the Board of Lucas County Commissioners is the beneficiary of 100 percent of the net proceeds of the clubs. The baseball history of Toledo dates to 1883. Although the Mud Hens are clearly the anchor of Toledo’s sports world, hockey has enjoyed a mostly successful history in the market. The Walleye debuted with the arena in 2009, and the team has averaged 223,172 in attendance over its first four seasons, a 25 percent increase over the market’s previous best hockey season, back in 1977-78. The Walleye also led the ECHL in merchandise sales in 2011-12, said Todd Merton, director of marketing and licensing for the league.

    Print | Tags: Franchises
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