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Nashville Purchase Finally Finalizing
by PuckStopsHere on 07/23/10 at 09:56 AM ET
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In 2007 the Nashville Predators were in a bad situation. Their owner was Craig Leipold, who wanted out. Jim Balsille made overtures about buying the team and moving it to Hamilton, but Leipold instead accepted an offer form $193 million (less than Balsille offered) from a local ownership group. As payment for not selling the team to Balsille, Leipold wound up as the Minnesota Wild owner, which is a team in a much stronger financial situation than Nashville.
It turned out that the local group was not in good shape. William “Boots” Del Biaggio, who held a significant minority share, turned out to be a fraud. The NHL had not investigated his background significantly and it turned out he did not have the money he claimed. Del Biaggio declared bankruptcy and went to jail, but the question of who owned his 26% share of the team remained a question looming over the team.
Finally, three years later it looks like we will have our solution. The local ownership group, currently lead by Tom Cigarran, will buy this share out of bankruptcy court for $15.2 million. If 26% of the Nashville Predators is worth $15.2 million, this makes the team worth only a little over $58 million. To be fair it is common to get a discount when buying items out of bankruptcy court. The bankruptcy court values 26% of the Nashville Predators at $25 million. In this case the team is worth $96 million. It is clear that the $193 million purchase price for the team in 2007 appears too high given these numbers.
This purchase will likely be ratified by the NHL in August.
In the Nashville Predators, the NHL has one of its weaker teams financially. They have done well to move up the food chain and no longer be the weakest one. They have done very well to be a playoff team most seasons, despite their limited financial resources. Hopefully the end of this ownership saga brings a period of relative stability, but it is too much to expect that Nashville becomes one of the stronger teams financially in the NHL. They are a team that is dependent upon transfer money form the other teams to make their budget. They have done well with a management team that has qualified them for playoffs five of the last six seasons. If hard times were to hit and the team were to fall out of the playoff picture it is not clear how well they could survive.
Nashville is no longer the NHL’s biggest financial problem. This is as much due to their success as it is due to failures in places like Phoenix and Florida. However they remain one of the weaker markets financially and it is not clear that there won’t be future financial issues.
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Tags: Boots+Del+Biaggio, Nashville+Predators, Tom+Cigarran,
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