Documents leaked to the Vancouver PROVINCE show the Whalers
ownership group is in "fabulous shape" despite the state of the
franchise. Tony Gallagher reports details of the '94 purchase
agreement show that the Peter Karmanos-led group purchased the
team for $47.5M when it was worth "in the neighborhood" of $80M
in another market. The group put up $22M on closing and deferred
the rest -- including $10.5M due over 15 years, with the first
three years interest free and the rest at 4%. The final $15M is
to be paid at the end of Year 20, with similar interest
arrangements. But, the principal on that $20M is reduced by 50%
of cash operating losses. Gallagher notes that means every time
the Whalers loses one dollar, the purchase price is reduced by 50
cents. The state of Connecticut also loses, as it is the seller
(through public entity CDA). Whalers ownership bought the team
for $22M up front, but current losses are bringing the overall
purchase price down. At the same time the team's estimated value
has risen by nearly $30M. Gallagher notes ownership can only
move the team without the CDA's consent after losing $30M over
three seasons. While the Whalers are on pace to do that, GM Jim
Rutherford said they will stay if that is what the state wants
(Vancouver PROVINCE, 12/14).
