David Poile, vice president/general manager of the Nashville Predators, may have spoken for all local hockey fans yesterday when he said he was “relieved” that a local ownership group has taken the first of several steps to purchase the team.
Current Predators owner Craig Leipold was all smiles Wednesday afternoon at a press conference at the Sommet Center as he accepted a binding letter of intent and a $10 million check from the local ownership group headed by David Freeman, CEO of 36 Venture Capital.
Leipold announced that the local group had added one somewhat surprising outside investor — San Jose’s William “Boots” Del Biaggio III, who will have a minority stake in the team.
Del Biaggio was reported to be interested in buying the National Hockey League team and moving it to Kansas City, Mo.
“Boots is not a threat to Nashville,” Freeman said. “His interests and our interests are extremely similar. We all want to show that hockey can succeed in the heartland of America. We welcome him with open arms.”
The local group submitted a bid of $193 million for the team, three million more than Del Biaggio’s, but lower than the $220 million offered by Canadian billionaire Jim Balsillie.
While Del Biaggio withdrew his original offer to partner with the local group, Leipold halted negotiations with Balsillie after the would-be buyer angered Nashville and the NHL by accepting season-ticket vouchers from fans in Hamilton, Ontario, where he planned to relocate the Predators franchise.
Leipold on Wednesday flashed smiles and seemed much happier now dealing with just one suitor.
Freeman said the debt service on the local group’s offer is less than 25 percent. The addition of Del Biaggio helped to reduce the debt.
“The league will look at it as very favorable that the ownership group is willing to put this type of money in the deal,” Leipold said. “That percentage of debt would be one of the lowest in the league.”
Freeman said there will be eight members of the local ownership group, but he declined to name them all.
“I am going to wait a couple of weeks to do that,” Freeman said. “They are all local. They need a little breathing room.”
Herb Fritch, CEO of HealthSpring, is part of the ownership group and was present at the press conference. Sam Bartholomew, a local attorney, is also part of the group.
Freeman said the goal for the local group is to make the Predators financially viable and that might include discussions about the lease agreement between the city and the Predators.
“We are doing everything we can to set this club to be able to succeed,” he said. “Success to us will mean not just being able to survive financially. We want the club to win.
Fans will need to buy tickets and show up for games, Freeman added.
“The 14,000 paid attendance number affects the financial viability of this club. As a small market club, without revenue sharing, it is not viable,” he said. “To get revenue sharing from the league that 14,000 number is magical.”
The target for the local ownership group is closer to 16,000 paid attendance, a number they think they must reach to have any possibility breaking even with the team.
Leipold admitted Wednesday that he’d thought about being a minority owner too, but decided against it. He said he plans to go out and buy season tickets since he will have to give up the owner’s suite.
“It was time for me to exit,” he said. “The team needs the local ownership connections. It needs the political support to make it happen. As we have said before, 14,000 in paid attendance does nothing for the long-term viability of this franchise.
“I couldn’t make it work here. It was ready for somebody else to come in.”
The next step is to turn the binding letter of intent into a complete legal agreement between the two parties. That should be completed within the next couple of weeks.
While some acted this was a “done deal,” there are many steps to complete. The NHL Board of Governors meets Sept. 15 and both Leipold and the local group would like to have the sale completed by the end of September.
“There is an awful lot of work left to be done,” Freeman said. “There are a lot of difficult steps to take. This is our show of faith that we want to proceed on this path. We put our money where out mouths are and expect the best.”
Leipold added that the sale is an “extremely” complicated deal on many levels.
“We are much further down the road than we have ever been with any other group,” Leipold said. “But this deal has a lot of moving parts. There are a lot of people holding hands. This is a complicated deal because of the number of partners and the complexity of our operations.
“We have the NHL consent agreement. We have the Board of Governors vote which David should not have any problems with whatsoever. But with a deal as complex as this one anything can happen. There are still four to six weeks of pretty intense discussions. But clearly we have gone through the most difficult part of the process.”