The next step in the Dallas Stars sale process is complete. The team announced on Thursday that they have filed a prepackaged chapter 11 plan in United States Bankruptcy Court to aid in the team’s sale. Lenders have worked with the team to put together the plan that would sell the team to Vancouver businessman Tom Gaglardi for an estimated $230 million—yet the sale is still subject to higher bids within the context of the bankruptcy proceedings.
Straight from the Dallas Stars’ press release:
To facilitate the sale, Dallas Stars, L.P. has commenced a voluntary chapter 11 bankruptcy case in the United States Bankruptcy Court for the District of Delaware in Wilmington, including the filing of a “prepackaged” chapter 11 plan. The chapter 11 process has the support of the National Hockey League and the Dallas Stars’ lenders, who voted to accept the prepackaged plan prior to filing. The prepackaged plan provides for a court-supervised auction of the Dallas Stars Club and other hockey-related assets. The purpose of the sale is to allow for a smooth transition in ownership, while ensuring that the Dallas Stars continue to play at the American Airlines Center in Dallas. The Plan provides that the Dallas Stars will pay and perform all of its obligations to its fans, players, employees, and vendors.”
It’s important to note that this is merely a procedural step in this particular sale. People will see the word “bankruptcy” and automatically assume that the Stars are yet another NHL team that is in financial dire straits. That’s not the case. In the Stars circumstance, there are various lenders who are owed debts that were incurred under the previous regime. In order to handle the debts within the context of the settlement, a prepackaged plan in Bankruptcy court is a viable solution to address all necessary parties. Still, there will be those outside the hockey world who will see “bankruptcy” and make the leap toward financial instability within the sport. That may or may not be true in other markets—but not in Dallas.
The news comes as the Dallas Stars’ players and coaches look to start the 2011-12 season on the right foot. Fortunately, the team’s sale should not affect the players on the ice or the inhibit GM Joe Nieuwendyk from doing his job. President Tony Tavares explained that it will be business as usual for the players starting training camp this week:
“This is a significant step toward completing the transition in ownership. We are pleased that our lenders have shown substantial support for the plan and the sale process, but the Dallas Stars are focused on one thing: hockey. The players and coaches begin Training Camp on Friday and we are all excited to start the new season.”
This season is shaping up to be a year of renewal for the Stars. Between the sale and a new coaching staff led by Glen Gulutzan, the team will look to create a new identity and get back to the playoffs for the first time in three seasons. A young coach leading the young players on the ice will help—but solidifying stable ownership will be the most important thing the team accomplishes this season.
Maybe the Stars will be able to start spending money once again? We should find out in late November.
After months of haggling with the city of Glendale and the Goldwater Institute in attempts to purchase the Phoenix Coyotes, Matthew Hulsizer has finally moved onto a new potential franchise. David Shoalts of The Globe and Mail in Toronto is reporting Hulsizer is taking a “serious look” at the St. Louis Blues. The Blues have been looking for investors for nearly two years. In May, Dave Checketts announced the team was officially on the market.
There’s a team on the market. It’s pretty well established that Hulsizer’s in the market for a team as well. So what took these two so long to find one another? Here are the specifics from Shoalts’ article:
“A source familiar with the Blues situation said Hulsizer is discussing a price in the range of $165-million to $170-million (all currency U.S.) with Checketts. The Blues chairman said earlier this week he was given an extension on a $120-million loan with Citigroup Inc., that would give him more time to sell the team.”
It’s important to note the differences between this situation and the failed deal in Phoenix, Glendale. In Phoenix, Hulsizer was working towards an arrangement where taxpayers would pay him for operating Jobing.com Arena (which is owned by the city of Glendale). In essence, the city was subsidizing Hulsizer for buying the team.
He’s not going to get the same sweetheart deal in St. Louis. There will be substantially less bureaucratic red tape to deal with—but the trade off is that he’ll have to pay much more money out of pocket for the honor of owning an NHL team. At least we know the NHL would approve Hulsizer in the event of a future purchase.
This is only the first step for Hulsizer—he’s interested. Next, he and Dave Checketts will have to work towards a financial deal that makes sense for both sides. If they can do that, then they’ll get to start the actual sales process. The good news is that the Blues have finally found someone who is interested and has deep enough pockets to make the deal happen.
Hopefully their isn’t a Goldwater Institute satellite office in Missouri.
La Presse in Montreal is reporting that the Ontario Teachers’ Pension Plan is looking to sell their 66% share in Maple Leaf Sports & Entertainment (MLSE). The huge news could mean real estate mogul Larry Tanenbaum will be able to add to his 20.5% interest as he contractually entitled first right refusal to any interest. Additionally, TD Capital will also be able to add to their current 12% interest in the entertainment group. No matter who ends up with the available interest, it could change the direction of the most polarizing team in Canada.
The first step of the sale would be for the Teacher’s Pension Plan to find investors interested in the 66% stake. Accordingly, it’s being reported that they’ve contacted Morgan Stanley for the purpose of finding interested parties and to get an idea of the realistic selling price. From there, they would go to Tanenbaum and/or TD Capital with a bid and either accept their offer or move to the parties who are willing to pay a higher premium.
Any potential deal will include more than just the Toronto Maple Leafs and the Air Canada Centre. MLSE seemingly owns the entire sports landscape in Toronto—so purchasing a part of MSLE means purchasing a part of all Toronto sports. La Presse breaks it down (English translation):
“The Teachers’ Fund is seeking $1.3 billion for its share of MLSE (Maple Leaf Sports & Entertainment), the largest sporting group in the country. MLSE owns the Toronto Maple Leafs (NHL), Raptors (NBA), Toronto (MLS), and the Toronto Marlies in the AHL. It also has networks Leafs TV and Raptors TV; and venues Air Canada Centre, Ricoh Coliseum, and BMO Field, which would also be part of the transaction.
If it’s completed, this sale will be the largest in Canadian professional sports history.”
A few months ago, it was rumored that Rogers Communications was interested in MLSE. We’ll soon find out if those rumors held any water, but purchasing an interest in the Leafs would be huge for Rogers and their subsidiary Rogers SportsNet.
Update: Per Hockey Night in Canada, Ontario Teacher’s Pension Plan Statement:
“The Ontario Teachers’ Pension Plan today stated that it will explore the possibility of selling its 66% majority share of the Maple Leaf Sports & Entertainment, and will be making no further public comment on the matter.”