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Deals tie Rangers, Stars buyers to joint media venture
Published June 28, 2010
The future buyers of the Dallas Stars and Texas Rangers are obligated to pursue a joint media venture after the expiration of their current TV deals, according to terms of the Texas Rangers sale agreement that was made public recently as part of the club’s bankruptcy proceedings.
Both teams are owned by Hicks Sports Group, but HSG is selling the clubs in separate transactions. The teams have TV deals with Fox Sports Southwest that expire in 2014.
The commitment could tie the hands of each team’s buyer, experts say, and close off other media opportunities.
“It could become very complicated in terms of length of a deal, rights fees per game and how to treat sponsors,” said Mark Lazarus, the former Turner Sports executive who now is president of media and marketing services for Career Sports & Entertainment. “I wouldn’t want any restrictions on things I could do, to be burdened with another franchise’s issues.”
Under terms of the agreement that has Chuck Greenberg purchasing the Rangers, the buyer after closing shall “use commercially reasonable efforts to obtain a letter from the National Hockey League confirming that the agreement for the potential joint venture between Purchasers and the Dallas Stars regarding the media rights of the Texas Rangers and of the Dallas Stars hockey club … is in compliance with applicable rules and regulations of the National Hockey League,” the sales agreement states.
The agreement describes a similar requirement for the Stars’ sought-after buyer.
A “joint venture” could mean the joint selling of cable rights; it also could mean the formation of a regional sports channel. A source said that if a channel were to occur, the equity split under consideration is 70 percent for the Rangers and 30 percent for the Stars.
The commitment to go into business together may be more valuable for the Stars than the Rangers, Lazarus said. “It is a drag-along tactic,” he said. “Without it, the hockey team is out there to fend for itself.”
It’s uncertain if the media joint venture language would become part of any new agreement if the Rangers’ sales process were to be reopened and a new buyer emerges.
— Daniel Kaplan