Some say that Gary Bettman is overpaid but if things continue the way they have, he may well be in for a huge raise. On Wednesday a group of 8 investors (7 local) signed a letter of intent to purchase the Nashville Predators for $193 million. That's $193 million for a team in Nashville Tennessee!? A team near the bottom in league revenues that has been losing millions of dollars a year.
Many fans dislike Bettman's demeanor and tactics but it's pretty hard to deny that he seems to be very good at getting what he wants.
It's no secret that the Commissioner wanted the Predators to stay in Nashville, if at all possible. At the same time there has been rampant talk of a promise made to put a team in Kansas City. Major steps were made on Wednesday for both of these wishes to occur.
Richard Lawson of the Nashville Post wrote this evening that Boots Del Biaggio's ownership stake in this deal is over 40%. This is extremely significant and in my opinion could mean one of three things:
1) Boots just wants to be an owner of a team (any team) and have influence over operating decisions.
2) Boots is surely going to buy out the other owners in time and move the team to Kansas City.
3) Something is up.
To me, #1 and 2 just don't make sense. If Del Biaggio wanted to own a team in Nashville, why didn't he just buy it outright, instead of joining this partnership group? And if he was banking on getting the Preds to Kansas City, aren't there easier ways of bringing a team there, either through expansion or the purchase of another struggling club?
So what's my theory?
This local ownership group was an "extreme long-shot" at first. As I reported back on
June 18th, Mr. Freeman was trying to put together a group of eight total investors who would purchase the team for approximately $195 million - $125 mil in equity and $70 million in debt.
At that time the group had between $75-85 million committed among either three or four individuals. Mr. Freeman was to invest $50 million and two or three other investors had committed between $10-15 million, including Mr. Fritch.
Original Proposal:
$195 mil - $125 mil equity, $70 mil debt
Revised Proposal (estimate):
$193 mil - $145 mil equity, $48 mil debt
*based on approximately 25% debt as mentioned in the press conference
Without Del Biaggio the group was still a long-shot, especially since their progress had stalled in finding investors. But with Del Biaggio's money it became a slam dunk - if his stake is over 40%, his commitment is somewhere in the neighborhood of $80 mil. He joined the group very quietly and really did play a huge role in saving the day. And you can be sure that there are those in New York who took notice of this good deed.
Now all Boots has to do is wait. If the Predators struggle financially then I'm sure the other minority owners would be more than willing to sell - and the Preds would move to Kansas City. That is very much plausible but likely a scenario that even if it were to happen would take at least couple years at minimum, given what's been happening in Nashville over the last little while.
The alternative is that the Preds thrive in Nashville, riding the momentum gained during this crazy summer. If/when that were to happen I'm sure that Del Biaggio would be able to find willing buyers for his share in the team and I'm equally sure that the league office would be even more thrilled to help him get a team in Kansas City. Remember too that this whole deal came together in under 60 days. Given more time and a successful season, this will seem like a much better investment opportunity for interested parties.
I'm absolutely convinced that Del Biaggio is committed to Kansas City, not Nashville. This is just a great opportunity to gain exposure with the league and its governors, to come in and play the hero and to further cement the chances of hockey in KC in the very near future.
Why am I so sure? If he was interested in just being an owner and in keeping hockey in Nashville, he would have purchased the Predators on his own. But he didn't, because if the team started doing better financially, he would have been stuck with a team in a market he wasn't interested in.
Also don't forget this quote from AEG's Tim Leiweke from not too long ago:
"I believe Boots and his group will step up and get an expansion franchise if there is one to be had. In the meantime we're going to try anybody and everybody that ultimately is in trouble. We're willing to be used a little bit if that's the process it takes to get Kansas City a team."
Edit: These quotes from the Kansas City Business Journal very much back-up my theory:
"I will now be part of the Nashville ownership group, and I'm 100 percent committed to Nashville. Now the people of Nashville have a chance to make it work here. If it doesn't work and the team is no longer financially viable, the Nashville Predators will have to look at all their options."
"My hope is Kansas City will get expansion if and when the NHL Board of Governors looks at the issue."
"My answer to that would be, I'm very interested in being a majority owner of an NHL hockey team." (re: whether he may still be interested in an expansion team in KC)
This was the perfect scenario for all parties South of the border:
It works out for Bettman.
It works out for Del Biaggio.
It works out for Freeman and the other owners who are protected in this investment because of Biaggio's presence and willingness to purchase their shares if need be.
If certainly works out for the great fans of Nashville.
It may even help things work out for Mr. Bruckheimer, another person who has forged a strong business relationship with the league well before the next round of expansion. We could see a trend here - you work with us and we'll work with you in due time.
It also works out for Leipold who didn't quite land the $238 mil but still walks away with a very nice $193 mil and the chance to stay in Gary Bettman's good books.
Scott Burnside is now reporting that "Leipold wants to remain in the NHL and that plans are in the works for him to step into an ownership role with the Minnesota Wild after cutting ties with the Preds and when current Wild owner Robert O. Naegele Jr. decides to step away from the business."
All in all this couldn't have been scripted any better if it was coming out of an office in Downtown New York with help from Mr. Bruckheimer in Hollywood.
As for Mr. Balsillie? I have a feeling that we will be hearing of him in the not too distant future as there are several franchises that are still very much struggling. This was just another frustrating chapter in a story that I believe still will end with hockey in Hamilton. I was somewhat surprised by Leipold's comments during the press conference though, because it's not as if he pulled the plug on the deal as soon as he found out what Balsillie's true intentions were (if he didn't know all along what most suspected).
Most of all though, it was a great day for hockey in Nashville. I'll say it one more time - the fans there are incredibly passionate, I only wish that there were more of you. Let's hope that this season is the beginning of a new era for hockey in your city and that fans and businesses make the commitment to this team both short-term and long-term.
The future is now in your hands.
Embrace it. Enjoy it. Protect it. And hopefully years from now you'll be telling stories about the summer of 2007 when a group of local businessmen and a core of passionate fans all did their part to save a team, in a city where many would have bet their Boots that hockey would never last.
Danny -
[email protected] 
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