In November 2007, the Nashville Predators franchise was sold for $172 million to a group of buyers. The purchase price included over a $60 million investment to cover the organization's debt. A group of locally-based buyers owns 73 percent, while minority partners own the rest. Last year, Canadian businessman W. Brett Wilson bought a 5 percent interest.
The group now faces an untenable situation with franchise player Shea Weber. It is easy in theory to say "We'll match ANY offer sheet" and quite another to actually come up with the money to do it.
Let's put it this way: If the Predators ownership group gives David Poile the go-ahead to match the offer, they will be on the hook for $80 million to Weber over the next six years. Add that to Pekka Rinne's $42 million over the same span, and the small market franchise would have to commit $122 million dollars --- 70.9 percent of their original purchase price of a debt-riddled franchise -- simply to keep TWO players on the roster over six seasons.
By the way, because so much of Weber's offer sheet is paid out in the front-loaded signing bonuses, the total value of his $110 million deal is not likely to go down very much in a new CBA.
Yes, Weber is a Norris Trophy caliber defenseman. Yes, he's the team captain. But as a business -- not a hockey -- decision, it's virtually a no-brainer that the organization should decline to match the Philadelphia offer. If there's a way to keep Weber and Rinne, put enough talent around them to remain a playoff team AND avoid sinking the franchise financially the process, well, it will be something of a miracle.
Nashville currently must spent nearly $14 million just to reach the temporary cap floor for the 2012-13 season. But the Weber conundrum is one of REAL dollars, not salary cap hits. While it could be argued that the spending requirement to reach the floor gives the Predators incentive to match the Weber offer sheet in real dollars -- knocking out $7.9 million of required cap spending in the process -- the team has yet another problem.
Currently, the Predators have only 18 NHL roster players under contract for next season, including just four NHL-level defensemen. In addition, they have nine forwards and two defensemen who are a year away from becoming RFAs (including Patric Hornqvist and promising young Roman Josi) or UFAs (Mike Fisher and Kevin Kline among them).
While keeping Weber is still officially and understandably the top concern right now, what sort of established talent can be put around him and Rinne? The Predators would have to spend -- again, in real dollars -- like they are a big-market, big-budget team for years to come if they keep Weber. That may please ticket-buying fans, but would it please the investers who care first and foremost about maintaining the bottom line?
From a hockey and PR perspective, losing Weber for draft picks (even four first-rounders) after losing Ryan Suter for nothing would be disastrous. No question about it. But the big-picture implications of paying out all that front-loaded money to Weber suggest that matching is not ultimately in the franchise's best interests.
What probably would be the smartest decision at this point is to have David Poile strike an agreement not to match the Philadelphia offer in exchange for an overlapping trade that sends NHL-level talent back to the Predators and returns a couple of the first-round picks to Philadelphia. This arrangement also would make sense for Philadelphia because:
1) The arrangement would ensure the Predators would not match the offer sheet. Philly didn't make the offer sheet to ruin Nashville financially. They made it because they covet a franchise defenseman in his prime.
2) The Flyers would ideally like to shed some salary if they take on Weber, and there would be a huge surplus of defensemen on the roster.
3) It would keep relations with Nashville more cordial for future dealings. The Predators and Flyers have always had a productive trading relationship up til the current situation.
4) It would get the NHL office off their back to some degree.
For these reasons, I think the most logical scenario for both sides is a "Gratton agreement." The Flyers would get their man and the Predators would be able to save a little face. Poile could say they made the best decision for the franchise under the circumstances; getting some immediate roster players in the short-term and leaving themselves in better financial position in the long-run to keep the team as a whole strong.
If no Gratton agreement can be reached, Philadelphia would sit back and call the Predators' bluff (if it is, in fact, a bluff) about matching any offer. While some folks interpreted Nashville's reaction statement to the offer sheet as a sign they will ultimately match, what I feel is that they left the door open for Poile to strike a Gratton agreement with Philly and cut their losses as much as possible.
We will find out next week.... stay tuned.
Coming tomorrow: How the Weber offer sheet affects the rest of Philly's off-season agenda, whether the player ends up a Flyer or not.
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