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Balsillie to Buy Predators for $220m
25/05/2007 |
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Research In Motion Ltd. Co-Chief Executive Officer Jim Balsillie agreed to buy the National Hockey League's Nashville Predators for $220 million, owner Craig Leipold said yesterday.
Leipold, who paid an $80 million expansion fee to join the league in 1997, said he lost $15 million this season and $70 million during the 10 years he owned the team. In the one year in which it was profitable, he said the franchise made $640,000.
``That's real money,'' Leipold said of his losses during a press conference at the Sommet Center and broadcast on WGFX-FM, a Nashville radio station. ``I have come to the conclusion that I can not make it work here. It's painful to say that.''
The team has until June 19 to exercise a clause in its arena lease agreement that allows the owner to relocate if the Predators don't average 14,000 in paid attendance next season. It would owe the city an $18 million exit fee, according to The Hockey News. The city also has the option of making up the shortfall in ticket revenue and forcing the team to stay in Nashville.
Balsillie was unavailable to comment, the Predators said. Calls to his assistant and spokeswoman were not immediately returned. The sale is scheduled to close June 30, Leipold said at the press conference.
Two parties were interested in buying the team, which pushed up the purchase price, Leipold said. Efforts to boost corporate interest in the organization failed, he said.
``Local businesses weren't interested, local investors weren't interested,'' Leipold said. ``I was disappointed we couldn't get other people to step up and say they wanted to be part of what were doing.''
Earlier This Year
Leipold said that he and Balsillie began talking in January and February about a possible sale of the team that culminated in the letter of intent announced today. At that time, Leipold said that he was confident that if ``we had a team that went to the conference finals or the Stanley Cup finals, things would change.'' Instead, Nashville was eliminated in the first round of the playoffs by the San Jose Sharks.
Marc Ganis, president of Sportscorp Ltd., a Chicago-based sports industry consulting firm, said the price may show that Balsillie is considering moving the team from Nashville, where it's average home crowd of 15,260 ranked eight from last in the 30-team NHL in attendance this year. That figure includes both paid and complimentary tickets.
`A Very Big Number'
``This is a very big number for a team in Nashville,'' Ganis said of the sale price. ``There might be something more here.''
Balsillie, whose company is based in Waterloo, Ontario, and makes BlackBerry mobile e-mail devices, may be weighing a move, Ganis said. Cities that have expressed interest in NHL teams include Kansas City, Las Vegas, Seattle, Portland and Winnipeg. The NHL Board of Governors has to approve the sales of teams.
Leipold was on the owners committee that negotiated the contract to end the labor dispute that forced the cancellation of the 2004-05 NHL season. The deal imposed the league's first salary cap, instituted revenue sharing among teams and tied players' pay directly to league sales.
NHL revenue is projected to increase 7 percent to a record $2.4 billion this year, according to Commissioner Gary Bettman, and the league set a regular-season attendance record with 16,961 fans a game.
Still, the league has fewer television viewers than it had before the lockout. An average 160,134 households watched NHL games on Comcast Corp.'s Versus Network during the 2006-2007 season, according to Versus. That's 38 percent of the 416,000 households Walt Disney Co.'s ESPN network said the NHL drew during the 2003-2004 regular season.
NHL on Versus
The NHL was watched in 116,852 households last season, its first on Versus. ESPN can be viewed in 93.5 million U.S. households, while Versus is only in 72 million households, the networks said.
The new collective bargaining agreement ``is not a cure all,'' Leipold said. ``The market still has to support the team. And while my heart tells me we can still be successful, the facts suggest otherwise. I've reach the only possible conclusion.''
Balsillie dropped a $175 million bid for the Penguins in December after reaching an impasse with NHL officials over demands that included a promise to keep the team, which was seeking a new arena, in the city. Penguins owner Mario Lemieux took the team off the market and threatened to explore relocation, then reached an agreement with government officials for a new building.
Balsillie a Triathlete
Balsillie, a triathlete who graduated from Harvard Business School in 1989, joined Waterloo, Ontario-based Research In Motion in 1992.
Leipold founded Ameritel Corp. a telemarketing firm that specialized in business-to-business sales contracts. He later bought Rainfair Corp. a maker of protective clothing and footwear. He also formed Powers Management Corp in 1997, which manages the day-to-day operations of the Sommet Center where the team plays.
The Predators finished the 2006-2007 season at 51-23 with eight overtime losses.
``Hopefully Jim can bring some different ideas, some new energy, some new contacts,'' said Leipold, who became emotional during the press conference. ``I can tell you I have not been able to make it work.''
(Source: Bloomberg.com)
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