Tom Hicks is having trouble selling the Dallas Stars because of an all-too-familiar problem.
The owner of the NHL team is in the same boat as a lot of homeowners in the United States - the money he owes is greater than the value of his asset. As a result, prospective buyers are slamming on the brakes, the latest being Calgary oil man Bill Gallacher, although he is said to have his own issues.
Hicks's asset in this case is the Stars and a 50-per-cent interest in the American Airlines Center. The Stars and his baseball team, the Texas Rangers, went on the block when Hicks's company defaulted on $525-million (all currency U.S.) in bank loans last April. Hicks is also in the glue for a similar amount with Liverpool, the soccer team he co-owns with George Gillett.
According to a couple of insiders, the sale of the Stars and the arena has become bogged down because Hicks is demanding too much money for them. He is holding out for more than they are worth (one source said $450-million is a number being bandied about) because he needs to pay off his bankers.
The trouble is, the recent sale of a few NHL franchises is not helping the Stars' price tag. The NHL bought the Phoenix Coyotes out of bankruptcy for $140-million and Jeffrey Vinik scooped up the Tampa Bay Lightning for $100-million in cash.
Where those involved once expected the sale to be done by the start of the NHL season, January is now more likely.
At this point, it is not clear just who is left among the bidders, aside from Vancouver businessman Tom Gaglardi. Gallacher was recently reported to have dropped out but a Stars source said Tuesday he could resurface. Gallacher did not respond to a request for comment.
A couple of sources said Gallacher has some problems that could put a dent in his financial health. One is the launch of Athabasca Oil Sands Corp., which he founded and which was supposed to be a big score.
It was flying high in early April after the initial public offering brought in $1.35-billion (Canadian) with shares selling for $18 each. But when the company went on the public markets, the share price fell into a crater. By last Tuesday, shares were selling for $10.90, as a lot of the original investors dumped their shares when the price failed to rise above the IPO.
Doug Miller, who owns a Dallas oil and gas company and the Allen Americans, the Stars' Central Hockey League affiliate, was said to be head of one of two local groups vying for the team. He also came close to buying the Stars in 2002 when Hicks briefly put them up for sale. But Miller said Tuesday that "I'm not even looking at it." He said the prices he was hearing were too high for one thing and for another, few banks are willing to finance the purchase of sports teams these days. Miller also said partners with real money are scarce.
Not all of the business news about NHL teams is bad. Word came out Sunday that Detroit Red Wings and Detroit Tigers owner Mike Ilitch is negotiating to buy the NBA's Detroit Pistons from Palace Sports and Entertainment Inc.
This would help Ilitch's plans to have a new arena built in downtown Detroit. With the Pistons as a second tenant, local governments might be more willing to pay for an arena, although in Detroit's case the city is the municipal equivalent of Glendale, Ariz., the city where the Coyotes are based.
Finally, if I were a hockey fan living in Quebec City, I would begin studying the Atlanta Thrashers. NHL types are officially mum on this but there is a lot of stuff going on behind the scenes. It is a good bet the Thrashers will wind up in Quebec, although at this point it cannot be said when.