Just when it looked like another headache-filled summer for Gary Bettman, along came a little relief in the form of Matthew Hulsizer.
The Chicago businessman is taking a run at the St. Louis Blues in the wake of his withdrawal from the endless turtle race to buy the Phoenix Coyotes. He recently met Blues chairman Dave Checketts, took a tour of the Scottrade Center and is discussing a price of $165-million to $170-million (all currency U.S.) for a majority share of the team.
While this is a rare bit of good news for Bettman, should the NHL commissioner ever get time to relax on the back deck with his favourite beverage, the first song on his iPod’s summer playlist should be the old Fortunes hit, You’ve Got Your Troubles, I’ve Got Mine.
Hulsizer is in a good negotiating position with the Blues because a banking source says the franchise’s financial condition is not as wonderful as advertised. Checketts may have received an extension on his $120-million loan with Citigroup Inc., but the banking source says the investment bank has been trying to sell the loan at a discount to other financial institutions without success.
While Hulsizer wants to be the majority owner, he is interested in keeping Checketts, a respected sports executive, as a partner. One of Checketts’s associates said they would not comment on the situation.
Elsewhere, the New York Islanders’ future rests on a vote by Nassau Country taxpayers Aug. 1 to approve a financing plan for a new arena. In simple terms, the proposed deal is to finance the arena with a bond offering that will have a debt load of $26-million a year. Islanders owner Charles Wang will cover $14-million of that and also hand over 11.5 per cent of the revenue from all events at the new rink.
Depending on who’s doing the math, it is estimated the deal will add between $23 and $58 to each family’s annual tax bill. That sounds way better than what’s going on with the Coyotes in suburban Glendale but in the current political and economic climate there is no guarantee the voters will approve. It is also uncertain which way the lawmakers who rule New York State will go on the matter.
The Coyotes mess remains the NHL’s version of a migraine, of course. Since Hulsizer tired of the antics of the suburban Glendale politicians and bureaucrats, there is no clear indication Jerry Reinsdorf really is back in the picture as a buyer.
By the way, a source said in the last few days before he pulled out, Hulsizer offered to buy the municipal bonds that were the most contentious issue in the sale. The bond sale was supposed to provide a $100-million up-front payment to Hulsizer, who was to provide the other $70-million to meet the NHL’s asking price of $170-million.
Presumably, the offer to buy the bonds was an attempt to appease the Goldwater Institute, the public watchdog group whose opposition stalled the bond sale. If Hulsizer bought the bonds, a source said, Glendale would have wound up with $5-million in its coffers instead of nothing. Then again, the city once turned down an offer of $25-million from Jim Balsillie, no strings attached, when he was trying to buy the Coyotes.
Speaking of chronic problems, no doubt the NHL bosses are keeping a nervous eye on the Florida Panthers. General manager Dale Tallon just finished a $23-million buying spree to get the team’s payroll above next season’s minimum of $48.3-million.
Some of the players Tallon bought are of uncertain value, which is quite a gamble for the perennially cash-strapped team.
Something else which might tempt Bettman to put an extra splash of Scotch in his glass is the NHL’s appeal of an Ontario Superior Court ruling that struck down a $375-million sponsorship deal with Molson Coors that covered the U.S. and Canada. Judge Frank Newbould’s ruling said the NHL had to stick to a three-year deal with Labatt for the league’s Canadian rights, which is estimated to be a relatively paltry total of $75-million. Bettman and company are now waiting for a judgment from the Ontario Court of Appeal.
Finally, Hulsizer may solve a burgeoning problem for Bettman but it will not mean a big payoff for Checketts and TowerBrook Capital Partners, the private equity firm that owns 70 per cent of the team.
Equity funds generally look to sell investments after five years and move on, and the Blues did not prove to be a profitable investment thanks to the performance of the team and the onset of the recession a few years ago.
Checketts has not been able to find an investor to replace TowerBrook and said last March the entire team was now for sale. He received an offer from fellow minority owner Tom Stillman, which was rejected by the NHL.
Recent sales of NHL franchises have seen the actual cash portion to be around $100-million or less. Hulsizer just happens to have that amount sitting in an escrow account thanks to his pursuit of the Coyotes.