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St Louis Financial Issues

To paraphrase former US presidential candidate John Edwards, there are two NHLs.  In one NHL, big market teams make millions and millions of dollars a year.  These teams drive the NHL’s revenues and have no problem paying salaries that are as close to the salary cap as possible.  These are the teams that hire full-time capologists to try to find loopholes in the NHL’s salary cap that they can use to their advantage.  The other NHL is a growing group of teams that are dependent upon revenue sharing to stay afloat.  These are teams that routinely lose money and often struggle to have payroll that meets the NHL salary floor.

One team that finds itself in the poor group this season is the St Louis Blues.  An investment group led by Dave Checketts (former Madison Square Gardens president) bought the Blues in 2006.  This investment group was backed by TowerBrook Capital Partners, who held as much as 75% of the club ownership.

TowerBrook is backing out of their ownership in St Louis.  They first announced their desire to do so in May, at the conclusion of the Blues 2009/10 NHL season.  The TowerBrook group claims that they have lost money every year they have been involved with the St Louis Blues.  This leaves Dave Checketts looking for an investor to keep the St Louis Blues afloat.  At this point, TowerBrook says they are not backing out entirely until new owners are found. 

However, it is clear that St Louis is not in a situation to take on an increase in payroll.  Last year’s team has lost the salaries of Keith Tkachuk (who retired), Paul Kariya (who will miss this season due to post-concussion syndrome) and Chris Mason (who left via free agency).  Their lone major addition is Jaroslav Halak, who might help the team move forward in the standings this year and will likely prevent any regression.  CapGeek lists St Louis as the team with the fourth lowest payroll in the upcoming season.

St Louis is another example of a team with financial problems in the NHL.  They join Phoenix, Atlanta, Florida, NY Islanders, Columbus, Nashville and others.  Some of these financially troubled teams are in worse shape than St Louis, but the Blues are not in good shape.  The weak half of the NHL including the Blues is in bad shape.  This is one of the legacies of Gary Bettman.

The St Louis financial issues have not been well reported around the NHL.  Here is one of the better articles on the situation.  The lack of reporting of the St Louis financial system follows a well-established pattern that NHL financial problems do not get significant mainstream media attention unless they become so significant that they cannot be ignored (as in Phoenix).  The St Louis Blues are clearly a team with financial issues.

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Comments

EDJ's avatar

Finally, a break from those statistics.

Posted by EDJ on 09/12/10 at 02:14 AM ET

Bleed_Blue's avatar

This article lacks a lot of information.  Namely two things.  First, Towerbrook knew they were going to “back out” on their share of Blues ownership.  They stated when they bought 75% of the team that they would be an investor in the franchise for about 4-5 years.  Well, it has been that 4-5 years, so this is no surprise to the Blues franchise or the fans.  This was NEVER going to be a long term committment from Towerbrook.  Second, Checketts has announced that he has 3 investors that have expressed interest in buying the 75% Towerbrook is “backing out” on, which also was lacking from this article.  Towerbrook is not “backing out” of anything, they are doing what most all investment firms do…..invest in a product for a short time period, then move on to something else.  Also, Towerbrook has stated that they will not go anywhere until Checketts and company find a majority shareholder.  To lump St. Louis in with teams like Phoenix, Atlanta and Florida when talking about “financial issues” is comical at best.  Yes, they aren’t spending to the cap, but part of that is because they have a smart management/front office group, which they have lacked in the past, ESPECIALLY under the Laurie ownership.  They want the youngsters to show what they can do on the ice before they commit to any big dollar contracts, AND they know that they are looking for someone to replace Towerbrook’s 75%.  The Blues are NOT in dire financial straits.  The Blues, specifically Checketts, have stated that the team will have a new majority owner to replace Towerbrook by the end of the calendar year.  So, that is the ACCURATE information that the article was missing.  But, Blues fans already knew that.  Besides, this article is being ripped apart in Blues fan forums due to it’s lack of information and professionalism.

Posted by Bleed_Blue on 09/12/10 at 10:53 PM ET

PuckStopsHere's avatar

Bleed Blue

I think your biggest point you want to make is The Blues, speicifically Checketts, have stated that the team will have a new majority owner to replace Towerbrook by the end of the calendar year., which in this financial climate strikes me as likely a wishful thinkinf statement.  In the same way, you can find NHL quotes that suggest that the Phoeix Coyote situation would be solved by the start of the 2009/10 season.  It comes in the I will believe it when I see it pile.

St Louis may not have the weakest financial situation in the NHL, but they are a have not team and the potential exists that things could get worse soon if things go wrong.

I understand that the fans of a market want to see theior team portrayed as well as possible in the media and on the internet, but I do not understand the need to circle the wagons and attack the messenger whenever there is bad news to be broken.  If you do a google search you will find Phoenix fans trying to refute the Globe and mail reports of their financial problems before their bankruptcy and Nashville fans trying to refute their problems as Boots del Biaggio was arrested.  If St Louis fans wish to play the same game, that is their perogative, but it won’t change reality.

Posted by PuckStopsHere on 09/13/10 at 12:24 AM ET

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imageThe Puck Stops Here was founded during the 2004/05 lockout as a place to rant about hockey. The original site contains over 1000 posts, some of which were also published on FoxSports.com.

Who am I? A diehard hockey fan.

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