by PuckStopsHere on 10/04/08 at 08:17 AM ET
The Nashville Predators have had a tenuous financial existence for the last couple of years. The problems started in earnest when original owner Craig Leipold decided to get out of the financial losses. There was an offer by Jim Balsillie to buy the team and bring it to Hamilton. This was turned down for a local group (that offered less money - but has made it easier for the NHL to approve his purchase of the Minnesota Wild). The team was eventually sold to that local group, but they have never been on strong ground financially. In order to get the deal together, the Nashville group asked for and received concessions from the city.
Although that got things started, the group was not as financially stable as they had believed. A large minority partner, William “Boots” del Biaggio turned out to be a problem. Originally, Boots was working to bring an NHL hockey team to Kansas City on behalf of the Anschutz Group (Los Angeles Kings owners), who own the Sprint Center, which is the Kansas City arena. Boots realized that the easiest way to move the team was to get inside as a partner and buy them out when problems occurred in the future, so he bought into the Nashville Predators. With some backroom dealing, she ecured loans from Leipold and Anschutz which violates NHL policy, in order to buy his share. It turned out that all of his financial holdings were built on a “house of cards” and it led to his declaring bankruptcy and fraud accusations.
Del Biaggio’s 27% share in the Predators is now being held by a bankruptcy trustee, who is attempting to sell it. The story is that it is worth $20-23.5 million. This would make the entire Predators team worth about $75-87 million. That is a large drop from the $176 they paid to buy the team in the first place. It looks like the current owners are willing to pay 20 million for Boots’ share. It also appears Jim Balsillie is willing to enter the bidding.
The Predators Holdings LLC has petitioned the bankruptcy court looking after the del Biaggio case claiming that Boots’ actions cost them around $100 million.
The Predators have defaulted on a $40 million loan. Financially things are falling apart. Without a major change of direction, this could be the last year the team is in Nashville.
With the current problems in the US economy, there may be other teams with financial problems ahead, but none look in worse shape than the Nashville Predators.
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