A morning spent poking around in the financial part of the NHL yielded a few tidbits about stories that have the blogosphere and Twitter worlds humming.
First, a couple of things reported by The Hockey News about the Tampa Bay Lightning and the Dallas Stars resulted in strong denials from those close to both situations.
Someone close to Lightning co-owner Oren Koules insisted that Boston money manager Jeffrey Vinik did not demand a $30-million (all currency U.S.) discount on the purchase of the Lightning to account for Vinnie Lecavalier's contract. Lecavalier's deal has 11 years left to run for a total of $85-million with a cap hit in each year of $7.73-million.
The Hockey News reported that Vinik was going to ask Lecavalier to waive the no-trade clause in his contract in order to get rid of the big tab. But then he realized what a backlash that would create with the fans and asked for the price of the franchise be dropped from $170-million to $140-million. However, an NHL source strongly denied this.
At this point, it is not clear what the sale price will be, only that Koules and fellow owner Len Barrie will take a big loss on the $207-million they paid for the Lightning in June, 2008. Also up for a haircut is former owner Palace Sports and Entertainment Ltd., which financed about $100-million of the deal and guaranteed a loan of about $30-million from Galatioto Sports Partners, a New York investment banking firm, to the Lightning.
It is also not clear if Koules will be able to hang on to a piece of the team. The consensus of those keeping an eye on the negotiations is that he will not. It was a foregone conclusion that Barrie, who has ongoing financial issues with his Bear Mountain golf resort near Victoria, B.C., would not be kept on as a partner.
In the meantime, negotiations continue in New York between NHL commissioner Gary Bettman, Koules, representatives from Vinik, Palace and Barrie.
As for the Dallas Stars, a banking source disputes another Hockey News report that said CIT Group is going to force Tom Hicks to sell the team. The source said CIT is no position to do so because even though it is part of the group of 40 lenders Hicks's company, which owns his sports holdings including the Stars and baseball's Texas Rangers, defaulted to on $525-million worth of loans, it is not even the senior lender.
The Globe and Mail reported last October that once the sale of the Rangers was completed - it is now in the final stages - the bankers as a group will probably force Hicks to sell the Stars to clean up the rest of the mess. This was denied by Hicks, but our banker friend thinks otherwise. The banker admits Hicks could pull a new partner with money out of the woodwork to hang on to the Stars but says at this point it looks like he will have to sell.
There will be no trouble selling the Stars because they come with a half share of the lucrative American Airlines Arena and the market has shown it will support a decent team. Still waiting patiently in the wings with his cheque book is Calgary oil tycoon Bill Gallacher.
Finally, Daryl Jones from the Ice Edge group of investors said Thursday that the purchase of the Phoenix Coyotes is still grinding along with no news to report.
Given that the NHL closed its $140-million purchase of the Coyotes in late October and it's costing the league a minimum of $5-million a month to cover the team's losses while it negotiates with Ice Edge, it's a good thing Bettman convinced the NHL governors in December that it will all turn out well.
Further to our item about the possible sale of the Dallas Stars, the team has now announced it might be sold by owner Tom Hicks.
The Stars hired one of its creditors, Galatioto Sports Partners, to study the franchise and advise it on what to do next.
"While a sale is not a certainty, it is a possibility," Stars president Jeff Cogen said in a statement released by Hicks Sports Group. "Mr. Hicks has received numerous inquiries about the team. Those potential investors recognize that the Stars are a success story."
Galatioto Sports Partners is a New York investment banking and sports advisory company operated by Sal Galatioto that has been involved in dozens of financing deals in all of the major professional sports. In addition to being one of the Stars' major creditors, Galatioto is also a major creditor of the Tampa Bay Lightning, which is in the process of being sold to Boston money manager Jeffrey Vinik.
One person interested in buying the Stars, which will come with a 50-per-cent interest in American Airlines Arena, is Calgary oil man Bill Gallacher. He was in contact with Gary Bettman months ago and expressed his interest in the Stars.
Hicks Sports Group, which owns the Stars and the Texas Rangers, defaulted on $525-million (all currency U.S.) in loans to 40 banks last year. The sale of the Rangers is awaiting approval from Major League Baseball and the banks. After it is completed, the fate of the Stars will be determined.
After The Globe and Mail reported last October the sale of the Stars was likely because of their financial situation, Hicks denied he would sell the team. But sources said he would not have enough financial muscle to hang on to the team once his creditors were satisfied.Report Typo/Error