The martyrdom of David Freeman

Sunday, April 11, 2010 at 10:45pm
David-Freeman-heart.jpg

Last week, with a playoff berth assured, Nashville Predators fans spent a lot of time wondering where the team will be headed in the postseason.

In 2007, those same blue-and-gold wearing die-hards were wondering if the team was headed to the then-largely unknown Canadian burg of Hamilton.

In the spring of that year, it seemed all but certain BlackBerry billionaire Jim Balsillie would buy the team from then-owner Craig Leipold, and Balsillie — whose name is hissed by Predators fans with vitriol usually reserved for the Detroit Red Wings — was unabashed in his intention to pack up the team and hustle them to Hamilton, going so far as selling pre-orders for season tickets.

Enter David Freeman.

A largely unknown local businessman who had never owned Predators season tickets, Freeman swooped in and ponied up the bulk of the cash needed to keep the team in Nashville. Perhaps fitting with his reputation — or lack thereof — Freeman looks exactly like what he is: a striving businessman. His hair is thinning, but he wears it close-cropped; he is tall but not overly so, with a strong figure suggesting a man who was once a pretty good athlete, if not a star. The smiles, when they come, are wide and toothy.

The Knoxville native, who had moved to and fallen for Nashville, didn’t want to see his home belittled because it failed to keep a pro sports franchise.

“I’ve said it several times before, that it would be a huge black eye for this city to lose a pro sports franchise, because they are so visible,” Freeman said. “Pro sports teams in most cities help define who those cities are to the outside world, outside of a few cities like New York, Chicago or Los Angeles. This would have been the worst of all worlds here. Not only would Nashville have lost a franchise, but it would have lost it under the accusation that Nashville wasn’t good enough, big enough or strong enough to retain it. And that wasn’t accurate.”

Freeman is a lawyer-turned-executive who built Commodore Medical Services from the ground up in the early 1990s before selling out to a larger competitor earlier this decade. Among a stint at Vanderbilt Law School, time at powerful Nashville firm Waller Lansden Dortch and Davis, and a career in health care, the quiet Freeman built the connections he needed to bring a solid group of local investors to the table, cut Leipold a check and send the team’s founder to start a new venture in Minnesota.

If that sounds like an oversimplification of what happened, Freeman said it’s not far from the truth.

“It was such a whirlwind,” he said. “There was absolutely no forethought that went into this. It was literally like walking down a street, seeing a house on fire and just doing what you do, which is what we did when it became clear what was going to happen to the Nashville Predators if Jim Balsillie bought the team.”

While a local consortium held all the controlling stock in the team, an outsider was needed to bridge the gap. This final puzzle piece would bring a lot of cash but have no controlling interest.

The group found their man.

It was the first trickle in a cascade that would roar to a tumult years later, pushing Freeman from his perch atop the Predators hierarchy.

Something ugly this way comes

William “Boots” Del Biaggio had previously made overtures to Leipold with the intent of moving the Predators to Kansas City. And Del Biaggio had cash — lots of it — so he seemed like a good plug for the local consortium’s gap. With some concessions, the National Hockey League was willing to let Del Biaggio in on the deal, despite his interest in Western Conference foes the San Jose Sharks.

But then Del Biaggio went boots up. After he filed bankruptcy, the Securities and Exchange Commission came after him in December 2008 — he had used the assets of customers at his brokerage as collateral for loans, including loans he took out to finance his stake in the Predators. Eventually criminal charges were filed, and Del Biaggio was sentenced to eight years in federal prison.

Del Biaggio’s 31 percent, non-voting interest in the team went to — and remains with — a federal trustee.

It was a nightmare, a disquieting distraction and a far cry from the local boosterism and esprit de puck of the summer of 2007, a summer when a rambunctious atmosphere culminated in sports-talk fixture and ultimate Nashville homer George Plaster drawing thousands of people downtown to buy season tickets to keep the team in Music City, and when Tennessee first lady Andrea Conte wielded a sign telling outsiders to keep their damn hands off her team.

Now one of those outsiders put the team in jeopardy. Again.

Freeman wasn’t comfortable with the spotlight — better to let the oft-bombastic Plaster bring the crowds to be surprised by the verve of the first lady. Freeman just wanted something for his city to be proud of.

There’d be no access to Boots’ dirty money and the team had to keep the lights on, had to pay the players. The local group had to pay up. Again.

“It’s unfortunate, it’s embarrassing to have him associated with us, but it really doesn’t affect the franchise at all,” Freeman said. “He was a minority partner with a non-voting interest. … All of the local guys … we all made some additional sacrifices that we hadn’t foreseen. We all made personal financial sacrifices, but we shared that in a way we’re all comfortable with.”

It’s still unclear how much each member of the group put up to keep the team above water, but it’s safe to say Freeman paid the most.

Despite the team turning a modest gain — it recorded a small profit in 2007-08 and took a small loss the next season — the owners, and mostly Freeman, took a hit to keep the team operating. But it was a hit his finances couldn’t take.

The fall

For the better part of the next two years, the largest disappointment from the Predators was the team’s inability to make the playoffs in the 2008-2009 season, breaking a string of four consecutive playoff appearances. The prognosticators did not have much hope the team would do any better this season, and whispers — quiet ones mostly from north of the border, from the almost laughingly skeptical Canadian press, always cynical about the NHL’s Sun Belt experiment — began that the nationwide economic meltdown paired with another non-playoff season would torpedo the Preds’ attendance numbers, giving the owners the chance to shop the franchise to a more traditional locale.

And then something unexpected happened. The Predators got in gear after a slow opening and started playing great hockey. Crowds came and stayed. The attendance figures looked solid despite the stirring late-season heroics from the Titans — the NFL franchise is frequently seen as the primary reason the Preds often struggle to sell tickets before January — and the still-woeful economy. People were excited about what was happening at the Sommet Center.

But something wasn’t right with the Sommet Center at all.

As if trying to hide the news, the Predators issued a press release the Wednesday afternoon before Thanksgiving, knowing many members of the media — and most everyone else — would work a short day to get a start on the four-day weekend.

It’s not an unusual public relations strategy. Putting out bad news when people are less likely to pay attention to it makes sense — it’s called “taking out the trash.”

The trash, in this case, was the termination of the naming rights agreement with the Sommet Group and a parallel filing in Chancery Court alleging breach of contract.

The Preds said the Sommet Group failed to live up to its part of the deal. The statement from Ed Lang, the team’s president of business operations, was vague, alluding to failed payments.

But then Sommet Group chief Brian Whitfield fired off the slapshot heard ’round the hockey world, exposing Freeman’s $3.3 million tax lien.

The quiet man who loved sports and his city was in trouble with the IRS for a not-insignificant amount of money — and by his account, just because he was trying to do the right thing. In an email to team leadership, Freeman said he fell into debt to keep the Preds solvent.

“I … loaned the Predators several million dollars on a ‘short-term’ basis in 2007 to complete the purchase of the team. Due to subsequent events eventually culminating in the bankruptcies of parties associated with the team, it has become appropriate for me to convert my loan into an additional permanent investment in the club,” the email read, in part. “Unfortunately, reacting responsibly to the acts of others in a manner most beneficial to the team created a short-term liquidity problem for me.”

He was so tied into the team he had come to love, so dedicated to its fan base, so eager for its success, he shelled out cash he needed for his personal obligations.

It’s a tale told time and again — a good man trying to do the right thing gets in over his head, gets into trouble, and those who owed much to him turn on him. In this case, the attackers were members of the Metropolitan Sports Authority, the Predators’ landlord.

The media smelled a story, too.

No Predators story was complete without a reference to Freeman’s tax lien. Fan blogs joked that newspapers were one step way from including the lien in game box scores:

Goals: Suter 1 (14). Tax liens: Freeman 1 (3.3 million).

Gallows humor aside, the sports authority had very real problems with what it saw as Freeman’s failure to keep up his end of the bargain.

Authority members raised questions as to whether Freeman’s lien resulted in the abrogation of the team’s lease with the city. It gave the authority a strong bargaining chip — do what we want or we’ll go to court, invalidate the current (and quite frankly, very Predators-friendly) lease and make you swallow a bitter pill indeed.

The power play spelled the end of Freeman’s tenure as chairman of the Predators board.

In a last-ditch effort to hang onto control of his team, Freeman turned over financial statements to the sports authority, submitted certification he had made a payment to the IRS in an effort to get released from the lien (to date that lien is still in effect, pending the federal agency’s thumbs-up that Freeman has paid enough). It was, by and large, acquiescence to the demands of the sports authority, a pre-emptive strike to curtail what everyone saw coming. Despite Freeman giving them everything they would eventually ask for, they weren’t satisfied.

There was blood in the water.

Days later, the team announced Tom Cigarran, a man who owns 4.2 percent of the team — paltry compared with Freeman’s one-third stake — would take the reins as chairman. The avuncular, if gruff, Cigarran is a different man than his predecessor. Much more open, much more direct.

For starters, he’s a lot more direct about the first cause of Freeman’s downfall. After the latest agreement between the sports authority and the team was OK’d, Cigarran said he wanted to take the lead on getting Del Biaggio’s ownership share out from under the bankruptcy trustee. He’s entertained the possibility of getting the current owners to chip in, officially taking on the equity, or of bringing in a new investor — a local one. The trustee said he’s open to the idea.

Since then, Cigarran has become the public face of the franchise. It was he who ceremonially pushed the button changing the name of the team’s facility to the Bridgestone Arena. It’s he who can be seen — recently with former Del Biaggio business partner Warren Woo — waving to fans from the owner’s box. Freeman, by contrast, never seemed comfortable in the role.

At sports authority meetings, Freeman was happy to let Ed Lang do the talking. When he did talk, it was in a near-whisper. Cigarran, judging by his first appearance, will do his own talking.

There’s another way Cigarran is different from Freeman. To many fans — and certainly to the always-smelling-a-relocation-story sharks in the Canadian hockey press — the most interesting thing about Freeman was what he refused to say.

Not once did he commit to keeping the Predators in Nashville forever. When asked the direct question, he demurred. He’s a man who has bought sports teams before — he’s part owner of an English soccer team and has an interest in the Jackson, Tenn., minor league baseball team the West Tennessee Diamond Jaxx, plus he’s rumored to be part of a group looking to buy the NBA’s Detroit Pistons. He knows the sports business, and maybe he knows it’s best not to be unequivocal on a team’s future, especially one like the Predators, whose existence and viability have been in doubt from Day One.

Cigarran, on the other hand, has out and out said the team is staying in Music City, that above all else that is the primary goal of the ownership.

Sacrifice enough

And that’s a good thing. Like newspaper ownership, owning a sports team is one part vanity exercise and one part civic duty. It’s no part moneymaking enterprise.

“The bottom line is: This is not a good financial investment,” Freeman said. “This was absolutely not done for a financial return. This was something that we saw as important from a community standpoint, but also important from a business standpoint — not the hockey business, but just the overall economic engine of Nashville, Tennessee.”

And perhaps that understanding of what sports ownership is ultimately led to Freeman’s demise. He knew — better than the sports authority, better than the media, better perhaps than even his ownership partners — that keeping the team solvent trumps all other interests, even personal.

The man in the arena knows what those outside of it can never know. And Freeman is standing in the arena still, though at its corners. A substantial part of his personal fortune is still the substantial part of the team’s capital.

Looking back on that email, the short come-clean missive, maybe Freeman knew what his fate would be all along.

“Stabilizing the Predators was never envisioned as an easy task, a quick task, or a task without personal sacrifice,” he wrote.

And certainly David Freeman has made sacrifice enough.

12 Comments on this post:

By: richgoose on 4/12/10 at 1:09

This was a very good human interest story. Ice hockey in Nashville got a real boost financially by making the playoffs. Unfortunately ice hockey in Nashville is a tough sell. It is not as difficult as selling health care reform to the wealthy that will ultimately have to pay for it. It is however (as the Canadian press knows) an anomaly to most of the citizens of Davidson County who are footing a substantial part of the bill.

I spend very little time in Nashville during the winter months but I always enjoy going to the ice hockey arena two or three times a season. The hot dogs and hamburgers are great. The ice hockey fans are fun to watch.

By: govskeptic on 4/12/10 at 5:32

Story was a little short on info concerning the taxpayers
of Davidson Co. and their FIVE (5) Million dollars PER YR.
subsidy for this franchisee. It's a heavier burden to "buy"
our "BRAND" for the city of Nashville, than it was for Mr.
Freeman's gamble on his Predator's purchase.

By: TITAN1 on 4/12/10 at 9:00

Frank, can you be any more sarcastic? BTW, why did you let "The Real Frank Brown" make you change your screen name?

By: Alphadog7 on 4/12/10 at 9:22

GovSkeptic If there even is a 5 million a year subsidy for this franchise (I can't find one), its more than made up for by tax revenues that the Preds bring in. The benefits to this city having this franchise here are huge. If you want to cut 5 million, getting rid of the Preds would not even be on the list of logical choices.

By: TITAN1 on 4/12/10 at 9:32

The Titans and Preds are great for this city! But according to idgaf they cost us $25 million per year! He still has not explained where that figure came from.

By: Blanketnazi2 on 4/12/10 at 10:05

Commodore Medical was shady at best. Freeman's ethics are not exactly stellar.

By: jasonweaver on 4/12/10 at 10:07

Nothing new here... Waste of space. Work of a rookie trying to get update to date on a story. He couldn't even get obvious info correct. Freeman doesn't have close cropped hair. He's bald, shaves it. And he must be about 6' 3" which is indeed tall. Whitehouse already had written a good bit of this just in a different way, actually better than this.

By: modern4life on 4/12/10 at 11:00

"This was absolutely not done for a financial return" Cry me a river. When Freeman sells his stake or the team, come back to me then and try telling me this.

By: MusicCity615 on 4/12/10 at 11:46

THANK YOU DAVID FREEMAN!!! You are a saint in my eyes!!

The Predators, and Titans, are GREAT for this city. They play in so much revenue for the city, and the local ownership group also has booked more non-hockey events for Bridgestone Arena than compared to any other time.

Tough opponent in the plyoffs, but we can beat the hawks! GO PREDATORS!!! PLAY YOUR "A" GAME!!!

By: MusicCity615 on 4/12/10 at 11:47

"They bring* in so much revenue for the city"

By: mr.justice on 4/12/10 at 12:53

i found this statement concerning Del Biaggio's situation interesting:
"he had used the assets of customers at his brokerage as collateral for loans, including loans he took out to finance his stake in the Predators"

My question is who loaned him the $$? rumor has it a large chunk of the cash was from other NHL owners(including former Preds owner Craig Leiopold and L.A.’s Philip Anschutz?) when they needed a "mole" to help uproot the team and move them to K.C. And who owns the big,empty Sprint Center in K.C., you ask? Well,it's not the people of K.C. if that's what you thought. It would be the AEG group (as in Anschutz Entertainment Group Inc. )

Had the Commish done 1 ounce of his due diligence, Del Biaggio would have never made it into the group. From what i understand there is an obvious paper trail connecting “Boots” ,Leiopold and the L.A. owner. and the commish has never addressed it. not once. pretty greasy.

By: BigPapa on 4/12/10 at 2:36

The Commish will lie, cheat or steal if it means perserving the southern expansion teams. If they fail, it's a 100% reflection on him. He's the one that pushed for expansion into the non-traditional markets, so it's up to him to make it work.
For an example see Phoenix.

I'm sure when CL decided to bolt The Commish promised him ownership in the Minn. franchise IF he didnt sell to Mr. Blackberry. Thereby keeping the Preds in Nashville.