Monday, October 20, 2008

The Mario-Boots relationship

"We have talked about it. I think Mario feels similar to the way I do. We feel bad about the situation because we trusted Boots and got along very, very well with him. Mario is a very bright man. He was as shocked as I was when this whole thing happened."
Another very good piece on the Del Biaggio situation from The Tennessean. Reporter Brad Schrade has done solid work piecing together what exactly Boots's relationship was with the NHL, and it seems he was very tight with former players and owners.

It also appears he was much closer to buying the Penguins than I'd thought previously.

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Friday, October 03, 2008

Preds blame Boots as losses mount

The Nashville Predators' ownership tangle has taken another twist with the startling admission the NHL team has defaulted on a $40-million (all currency U.S.) loan.

If that raises fresh questions about the franchise's viability, Nashville's owners say the blame should be laid at the feet of former minority owner William (Boots) Del Biaggio III, who declared bankruptcy in June.
I'm beginning to wonder whether the next lawsuit may be against the NHL itself for saddling the well-meaning local group in Nashville with an utter disaster of a partner. If this Del Biaggio business truly has made a mess of David Freeman and company's finances as is claimed, what a sorry situation that is.

In a lot of ways, this beleaguered group is Nashville's last chance, and if they bail while the losses mount, what then?

It's also becoming increasingly clear that Gary Bettman was offering bold-faced lies when it came to just how desperate the situation in Tennessee really was. Fast forward to the 6:25 mark here:

I don't know that the Predators are absolutely fine these days.

As an aside, Del Biaggio is back in court on Monday in what looks to be part of the bid by creditors to keep some of the info involved here out of the press. Stay tuned.

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Wednesday, October 01, 2008

Bidding for Boots's share

Herb Fritch, a minority partner in the NHL team, plus two other sources told The Globe and Mail Tuesday the Predators ownership group headed by majority owner David Freeman has bid for Del Biaggio's 27-per-cent share of the team, which is under the control of the U.S. Bankruptcy Court in San Francisco.
One source said the bid for the 27-per-cent stake is for $20-million. In Del Biaggio's bankruptcy filing, the share is said to be worth $23.5-million, and is his biggest single asset. Fritch declined to say how much the partners bid, but admitted it was at a discount to the stated value.
Twenty-seven per cent of the Predators is apparently not worth a heckuva lot these days. At that bargain-basement rate, the entire team would be worth only about $75-million — not the $176-million it was purchased from Craig Leipold for last year.

Ponying up another $20-million makes an awful lot of sense for the local ownership group here, given they'll "own 95.4 per cent of the team," an asset that has an actual worth potentially far higher than the cash they had to pay out.

Also apparently attempting to nab that 27-per-cent share is Jim Balsillie, who Stephen Brunt says may be the beneficiary of all the bad news down south this week. (Not that he's been immune.)

I haven't the foggiest how a bankruptcy court will attempt to sort this mess out, but one imagines that that laundry list of creditors would be after the greatest return for Del Biaggio's assets as possible. And to me that says that someone willing to pay well north of $20-million for a 27-per-cent share could just come away with that.

“I believe our group has to approve any sale of those shares, so we have some control over who gets them,” Fritch said, before adding he was not sure if that right would hold up in bankruptcy court.

“I don't care what the amount [of the bid] is, it's got to be approved by the powers that be,” he said. “I think the bankruptcy trustee has to take that into account.”
This may take a while.

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Saturday, August 23, 2008

Plot thickens in Boots's bankruptcy
NHL creditors want details kept under wraps

The Tennessean on Friday filed a brief in federal court in Northern California to keep the bankruptcy proceedings of Nashville Predators part-owner William J. "Boots" Del Biaggio III open to the public.
The unsecured creditors' committee filed its motion earlier this month to restrict access to some information, particularly as it relates to Del Biaggio's interests in the Predators hockey club. "The value of this interest depends in part upon relations with the National Hockey League and with the other owners of the team, both of which stand to be injured upon disclosure of Confidential and Privileged Information," the motion said.
The first question that comes to mind here? Given what we already know, what exactly is left to find out in this case?

It's clearly either Wild owner Craig Leipold and/or the Anschutz Entertainment Group pushing to close the proceedings, even with the fact they both loaned considerable cash to Del Biaggio already out in the open.

We also know the intricate details behind Del Biaggio's designs on shipping the club out of Nashville ASAP.

You have to question the notion that the value of Boots's share of the team will be damaged by revealing the remaining details — but perhaps there's something buried there that we just haven't dreamt up.

Any damaged relations involving Leipold and AEG are of those parties' own doing, and I can't see how a new ownership partner in Nashville would be scared off by that.

Not that there aren't plenty of other reasons not to buy in at the moment.

The Forechecker has more.

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Friday, August 22, 2008

Predators set Radulov deadline

"We know he signed over in Russia but we are asking him to reconsider and to make a decision to come back … We feel Alex is a very, very good young player with a great future ahead of him. We feel he got some bad advice in this situation and hope eventually he will want to return to play with best players in the world in the best league in the world.

"But having said that, we don't want to force him to come back until he wants to come back. That is not good for Alex or for his teammates. As of Sept. 1, we're moving on."
Which means the speculation ends nine days from now.

I've said my piece in the past on how valuable Radulov is, and especially to this team, which now has a gaping hole in the right wing spot. There's been talk of bringing in Mark Parrish or allowing some of the team's youngsters to step up, but both options are significant downgrades over last season.

That said, Nashville still has some pretty solid depth, and if Dan Ellis is the real deal, they should be in the mix for a playoff spot again. A lot of people are writing this team off, but it's a plucky bunch, and some of the young talent on the blueline is finally starting to blossom.

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Thursday, August 07, 2008

Radulov's new look

Alexander Radulov was introduced by his new KHL team this week in Ufa, much to the chagrin of fans and management in Tennessee.

Last week, he spoke to about his decision to return home, something that his father apparently did not initially support but that his friends said would make him "a champion of Russia."

Radulov says he tries not to read the newspapers or negative press, and that the leaders of the Salavat team have assured him things will be fine given he signed the contract when there wasn't an agreement between the NHL and KHL.

He also indicates that he went to several other Russian clubs looking for a contract, but that Ufa had the best offer. He also seems pretty optimistic that the KHL is going to continue to improve.

As columnist David Climer wrote in The Tennessean this week: "With each passing day, it appears less likely that Radulov will be back in the NHL."

It certainly doesn't look promising for this coming season, but you wonder if he ever comes back given he'd have to take a sharp pay cut by playing out the final year of his entry-level contract. There may not be that warm of a welcome in Nashville, either.

Perhaps he's Радулов for good?

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Tuesday, July 29, 2008

Koistinen awarded $700,000

Predators defenseman Ville Koistinen was awarded a one-year contract at $700,000 as part of the NHL’s arbitration process. Koistinen’s arbitration case was heard by an independent arbitrator on Monday (July 28) in Toronto. Koistinen was a restricted free agent this summer and filed for arbitration prior to the July 5 player deadline.
Koistinen's not a well-known name, but he's a player on the rise, someone who can help fill the void left by Marek Zidlicky down in Nashville. That he went to arbitration after just 48 NHL games played, however, is a head scratcher.

Koistinen is 26 years old — old for a rookie — as he was never drafted and rose through the Finnish league system up until 2005-06. This is the third one-year deal he has signed in a row with the Predators.

For whatever reason, Nashville was deadly at even strength with Koistinen on the ice last season — although he didn't play big minutes or against top opposition. Still, he showed a lot of potential, picked up power play time and is probably a name fans will know better going forward.

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Sunday, July 27, 2008

Bank takes loss on Boots loan

The parent company of San Jose's Heritage Bank of Commerce says it may never be able to recover $5.1 million it loaned to Silicon Valley financier William "Boots" Del Biaggio III, who co-founded the bank in 1994.

The decision to write off two loans to Del Biaggio was the primary reason for a $3.1 million loss in its second quarter, the company said in a statement, after earning profits of $1.7 million in the previous quarter and $4 million in the second quarter of 2007.
Sad, really. The Del Biaggio news has been sparse lately, but that will change once some of the bankruptcy proceedings move along.

There are a lot of interested parties.

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Sunday, July 20, 2008

Radulov suits up in KHL

Predators forward Alexander Radulov participated in his new Russian team's training camp Friday even though his contract was suspended by the International Ice Hockey Federation.

Continental Hockey League President Alexander Medvedev said the international federation can't keep Radulov off the ice during domestic competition or camp.
Not a surprise. Off-season training begins much, much earlier overseas than in the NHL, and players like Jaromir Jagr and Ray Emery are likely to already be in camps.

All this is is confirmation that Radulov fully expects to play in Ufa this season.

As for those that believed the NHL will allow him to slink into the night, think again:
"We have made it very, very clear that if Radulov isn't returned, if his contract isn't voided and he isn't returned to Nashville, we have no interest in sitting down at the table, no interest in cooperating, no interest in doing anything with the KHL," NHL deputy commissioner Bill Daly told the Associated Press.
What that would mean, naturally, is that the informal agreement between the two sides — which remains unsigned — will go out the window entirely, and players in both leagues will be up for grabs.

That's a better situation for the KHL than the NHL due to the fact the North American league has some 700-plus players under contract that could potentially be vulnerable. Far fewer Russian league players under contract are going to be of interest to NHL teams.

Radulov's the keystone here — he's the one to watch. The NHL knows that if he's allowed to play for the KHL while under contract with Nashville it potentially opens the door to other shenanigans. The Russian side, meanwhile, is aiming to gain as much leverage as possible from the fact they have him under contract and willing to defect.

In the KHL's perfect world, immense transfer fees would be paid to club teams for young Russian players, something the NHL's obviously trying to avoid.

No one can force the two sides to come to any sort of agreement, which leads me to believe that the NHL will head into 2008-09 without one — and without one of its burgeoning young stars.

The Columbus Dispatch and the New York Times' hockey blog Slap Shot have more.

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Thursday, July 17, 2008

Boots the braggart

"Boots bragged to me that he was able to convince Bettman's office to overlook the need for his audited financial statements because it was too much work."
Why on earth one would want to broadcast that news, I haven't the foggiest.

The Tennessean presents yet another interesting piece looking into the Boots Del Biaggio fiasco, with some of the most intriguing bits relating to Gary Bettman's chumminess with the minority owner.

The structure of the Predators' ownership agreement, whereby Boots would potentially be able to move the franchise, is also a key talking point:
Bergeron said Bettman spoke as though he was familiar with Forecheck's arrangement, although he never specifically mentioned the slideshow or the portability of the team.

"We didn't talk about mobility, per se, but we talked about the unique structure of the Forecheck agreement with the other owners," Bergeron said. "Gary said, 'It's a great structure that we put together, and Boots should be happy, because it was my idea.' "
The Forechecker has more.

UPDATE Here's Stephen Brunt on Bettman: "In any other walk of life, in any other business, bad judgment on that scale would get a chief executive fired."

One league governor, however, says Bettman has a long, long career as commissioner still ahead of him. "The truth is Gary Bettman has tremendous support among the owners and will probably, by the time he's done, he'll be the commissioner of our league for 30 years."

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Alex Radulov: A rising star

I have to say I'm a little surprised at some of the reaction in the wake of the news Alex Radulov has signed to play in Russia next season.

For one, many observers, in my opinion, vastly underrate what he brings to the table.

Of Radulov, The Hockey News' Ken Campbell says he "hasn't even scored a total of 50 goals in his two NHL seasons and he’s prone to long periods of low productivity." Spector called the whole saga "a minor irritant," while Puck Daddy asked "Why have a massive fight over a kid who's a poor man's Alex Semin?"

I disagree.

Two factors that one has to consider, first and foremost, in evaluating Radulov's 26 goal, 58 point sophomore season:
  1. He was 21 years old

  2. He played primarily on the second-unit of one of the weakest power plays in the league
Keep those in mind as I get into the stats here.

Scoring 26 goals as a 21-year-old is quite a feat these days, something that's been done almost exclusively by the NHL's elite. In the past decade, only 26 different players have scored 25 or more goals at 21-or-under (using ages as of Feb. 1).

Here's that list, sorted by peak number of goals in a single season:
  1. Alex Ovechkin (x2)
  2. Evgeni Malkin (x2)
  3. Eric Staal
  4. Ilya Kovalchuk (x3)
  5. Rick Nash (x2)
  6. Sidney Crosby (x2)
  7. Joe Thornton
  8. Mike Comrie
  9. Simon Gagne (x2)
  10. Anze Kopitar
  11. Patrice Bergeron
  12. Jeff Friesen
  13. Nathan Horton (x2)
  14. Marian Gaborik (x2)
  15. Marian Hossa
  16. Jordan Staal
  17. Jarome Iginla
  18. Paul Stastny
  19. Alex Tanguay
  20. Nikolai Zherdev
  21. Dany Heatley
  22. Alex Radulov
  23. Ryan Getzlaf
  24. Vinny Lecavalier
  25. Patrick Marleau
  26. Sergei Samsonov
It's a pretty nice list to be on, even at the low end. In general, producing as many as 25 goals at such a young age is an excellent predictor of future success.

Then there's the matter of just how Radulov put together such a remarkable season.

Playing 16:24 a game, he managed 58 points while putting up just four goals and two assists with the man advantage, making him one of the league's most prolific players at even strength (15th in the NHL).

On a per-minute basis, Radulov was the ninth-highest scoring player in the league at 5-on-5 last season. At 21.

The real wonder is that he didn't get more time on the first power-play unit.

During one especially strong stretch last season, Radulov produced 17 goals and 30 points in 30 games from Christmas until March 1. All but one point came at even strength.

In fact, if you take all 158 players who had 40 or more points last season, Radulov rates way up at the top of the list for percentage of points scored at even strength, with nearly 90 per cent of his points scored without the benefit of a man advantage:

Name Tm GP Pts PPP PP% EVP EV%
1 David Booth FLA 73 40 2 5.0% 38 95.0%
2 Alex Radulov NAS 81 58 6 10.3% 52 89.7%
3 Wojtek Wolski COL 77 48 5 10.4% 43 89.6%
4 John Madden NJD 80 43 3 7.0% 36 83.7%
5 Jochen Hecht BUF 75 49 7 14.3% 41 83.7%
6 Brandon Dubinsky NYR 82 40 7 17.5% 33 82.5%
7 Robert Nilsson EDM 71 41 8 19.5% 33 80.5%
8 Viktor Kozlov WAS 81 54 11 20.4% 43 79.6%
9 Andrew Cogliano EDM 82 45 7 15.6% 35 77.8%
10 J.P. Dumont NAS 80 72 16 22.2% 56 77.8%

By comparison, Alex Kovalev scored just 41 per cent of his points at even strength last season (the full list is here).

Part of the problem is definitely that Radulov simply wasn't effective on the power play in 2007-08, but I'd be good money that would change going forward as he (a) was given more plum ice time and (b) matured into a top line role.

Radulov's pedigree is incredible, and he is probably the best European import player to ever play in the Canadian junior leagues. At 19, he had 61 goals in 62 games with Patrick Roy's Quebec Remparts, scoring 152 points in the regular season and then 55 more in 23 playoff games.

If he in fact does play in the KHL next season, the Predators are losing quite a player, someone who could easily score 35 goals and close to a point a game next year in a larger role.

Nashville can't replace that from within — no team could. And the NHL might be down a burgeoning superstar.

For a Nashville perspective on all things Radulov, The Forechecker is your man: "If this indeed pans out," he says, "it is obviously a crushing blow to the Predators organization."

I couldn't agree more.

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Sunday, July 13, 2008

'Nashville's last chance'
Boots's plans for Preds revealed

From Day 1, when Boots Del Biaggio's name appeared as part of the "local" group's purchase in Nashville, it was clear he was a snake in the grass — which is why it comes as little surprise that The Tennessean has unearthed documents outlying his intentions to move the team.

But who knew that there'd be a handy PowerPoint presentation behind it all?

In a document entitled "Nashville Predators: Discussion Materials," Del Biaggio used "Portability Value" as a key selling feature in an attempt to bring investors onboard with his minority purchase in the team.

At one point, the piece states that "the NHL has already indicated that this is Nashville's last chance."

In short, the "value" in the Predators franchise was in its ability to be "flipped." A bidding war was what Boots was after, with "Hamilton, Kansas City, Las Vegas, Oklahoma City, Seattle, Winnipeg, among others" listed as likely candidates to "bid hard to attract an NHL team."

According to the presentation: "These cities will offer exceptional arena deals for an NHL team and potentially superior corporate support and fan base than Nashville."

("As an example, Kansas City has already made a very compelling offer.")

Wink, wink.

Bankrupt Boots saw the Predators as one thing: "A portable team." That made them an asset, especially when he could come in at the ground floor, take on very little risk and buy in without any real test of his financial mettle.

The final page of the brief presentation offers a grim portrait of what the financial situation would look like in Nashville should the team's attendance settle on 13,000 a game. It includes an annual $2-million payment to Del Biaggio's group, Forecheck Holdings:
2008-09 projections
Team Revenues: $55.4-million
Arena Revenues: $10.1-million
Total Revenues: $65.5-million

Team Expenses: $68.1-million

EBITDA: -$2.6-million

Interest Expense: $3.7-million
Payment to Forecheck: $2-million
Total Interest: $5.7-million

Deprec. and Amort.: $13-million
Net Profit: -$21.3-million

Net Cash Flow: -$9.8-million
Under Cumulative Net Cash Flow, the figure balloons from $15.7-million in the red after next season to $50-million by 2011-12.

A sinking ship, in other words.

One other note of interest from that page, by way of blogger Dirk Hoag, is that in 2010-11, Del Biaggio's projections make an allowance for a one-time $15-million expansion fee as part of team revenues. The figure would be the equivalent of a $450-million windfall divided among the 30 existing franchises.

This wasn't the only Boots-related news of the weekend, either.

The Tennessean reported on Saturday that Nashville's local group, led by David Freeman, has offered up nearly $10-million to cover Del Biaggio's guarantee to the city. Freeman also said his group has offered to buy Boots's $25-million stake in the team "at a reduced price."

As for a scenario involving a new investor purchasing that share via a bankruptcy trustee, Freeman said they would do so without the extensive privileges Del Biaggio was granted.

On Sunday morning, meanwhile, the San Jose Mercury-News continued its coverage of the saga by picking through the latest allegations against Del Biaggio. In addition to more legal trouble, he may owe nearly $1.5-million to three casinos, one source said.

Additionally, the paper reported, "interviews and court records show Del Biaggio risked large sums on some very speculative deals that haven't paid off."

I imagine the Predators are on that list.

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Friday, July 11, 2008

Expect NHL to fight for Radulov

“We would view any signing, from either side, of a player under a valid contract, who does not have any legally valid out-clause, to be a clear violation of the mutual understanding and existing principle. It would potentially be punishable with suspended national team eligibility and suspension from all competition or activity organized by the IIHF or any IIHF member national association. This would include events like the Olympic Winter Games, the IIHF World Championship or international club competitions like the Champions Hockey League."
And that, in part, is why I don't expect that we'll see Alex Radulov play a game in Russia next season.

The NHL has flexed its muscle already, working out a transfer agreement yesterday that really only benefits the North American side. Under those terms, NHL deputy commissioner Bill Daly has already asked that the Radulov deal be nullified.

Let's face it, there's not a great worry by the Continental Hockey League that its veteran players are about to be poached. What the Russian teams really want is compensation for when their top youngsters — like Blue Jackets prospect Nikita Filatov — sign overseas, and that wasn't part of what was hammered out.

Because Radulov has an NHL contract for another season, however, the NHL's in the right here, and unless Fasel was bluffing last month, the IIHF is about to throw the book at the young Russian. If faced with a potential ban from the 2010 Olympic Games, which Radulov would surely be a part of, my guess is he'll return to Nashville.

The question then, however, is what happens when his contract runs out on July 1, 2009.

It's clear from this Q&A over at FanHouse that Radulov is very interested in playing close to his hometown, Nizhny Tagil, which is only about 350 kilometres from Ufa. Nashville's a world away.

This idea that none of the game's young stars will choose to stay home is misguided, especially when the money, at least compared to an entry-level deal, is far better overseas.

NHLPA director Paul Kelly spoke yesterday to the potential benefits of having the KHL bid against the NHL for free agents going forward:
"It gives some of our guys another place to play," Kelly said. "It gives them some leverage they might not otherwise have, which is to present to their NHL teams that they have a competing offer from a KHL team and maybe improve their bargaining position."
Underpaid for now, Radulov will command a contract in the neighbourhood of $4- to $4.5-million a season as an restricted free agent beginning in 2009-10, a deal that might be more difficult for the KHL to match. If money's not the issue, however, and he still wants to return home after 2008-09, there's very little the NHL can do about it.

Radulov's not Alex Ovechkin, but he is one of the league's up-and-coming stars. For now, however, he's got a contract, and it strikes me as exceedingly unlikely that he'll be allowed to breach it.

Even if the courts have to get involved.

UPDATE The Hockey News' Ken Campbell has a discussion with Radulov's agent.

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Monday, June 23, 2008

Predators lock up Weber

Nashville Predators President of Hockey Operations/General Manager David Poile announced today that the club has signed defenseman Shea Weber to a three-year, $13.5 million contract.

“Shea has evolved into one of our core players,” Poile said. “He is both a player and a person that every team covets. He is big and strong, skates well, and possesses a booming shot. Shea has also been a part of championship teams from the Memorial Cup in 2004 and the World Junior Championship in 2005, to the World Championships in Russia last summer.”
>> team release
Still only 23, Weber's one of the most underrated players in the league. His season last year was derailed by an awful knee injury, but he's going to be a great one.

With Ellis, Suter and Weber locked up, the Predators will have a club that looks a lot like the one that made the playoffs last season.

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Sunday, June 22, 2008

Lucky Luc mixed up with Boots

A Southern California bank is trying to determine if tarnished Silicon Valley financier William "Boots" Del Biaggio III was obtaining loans under false pretenses as far back as 2004, according to new court filings.

Separately, the bank said that Del Biaggio and retired hockey great Luc Robitaille are in default on a $2 million loan they took out together in 2006. Robitaille is not accused of wrongdoing.
The story also gets into the connection between Boots, Robitaille and AEG, the ownership group of the Los Angeles Kings headed by billionaire Philip Anschutz.

Boots owes AEG $7-million related to the Predators purchase, which the Kings group financed apparently as part of a bid to put an NHL franchise in Kansas City. AEG is now suing Del Biaggio.

Where's the relationship begin?
Del Biaggio, a longtime hockey fan and investor, told the Kansas City Star in 2006 that he met Robitaille when Del Biaggio owned a minority stake in the San Jose Sharks. The newspaper said Robitaille introduced Del Biaggio to executives with AEG, a sports and entertainment conglomerate that owns the Los Angeles Kings.
Robitaille has a sterling reputation in NHL circles, but he certainly picked poorly in choosing a business associate. I don't see any of this coming back on him, other than perhaps impacting his wallet, but his relationship does shed light on how Boots became involved in the AEG/Kansas City/Nashville fiasco.

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Friday, June 20, 2008

Mason dealt to St. Louis

St. Louis Blues President John Davidson announced today the team has acquired goaltender Chris Mason from the Nashville Predators in exchange for a 4th round draft choice, 111th overall, in the 2008 Entry Draft.

“Acquiring Chris really solidifies our goaltending position which was one of our goals going into this weekend,” said Davidson. “We are looking forward to a big day today at the draft.”
>> team release
The most important detail here is that Dan Ellis has re-signed in Nashville, making him the starter heading into next season.

Moving Mason's $3-million cap hit for next season is a big bonus for a Predators team that didn't want to get stuck shelling out $6- or $7-million on netminders alone, and the team already has an up-and-coming youngster to fill the backup role in Pekka Rinne.

Another very good trade for David Poile.

The Blues, meanwhile, made no bones about wanting another goaltender heading into 2008-09, meaning youngsters Hannu Toivonen and Marek Schwarz aren't in the immediate plans. Mason didn't have a great year last season but will split time with Manny Legace, who at 35 probably shouldn't play more than 50 games anyway.

Legace had a pretty strong campaign for St. Louis last year.

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Wednesday, June 18, 2008

As the Predators turn

I took a 10-day hiatus from following Boots-gate, but the unfortunate tale of the Predators minority owner has continued unabated ever since we learned that one of his main creditors was AEG, the owner of the Los Angeles Kings:
And the search is on in Tennessee to try and find a replacement for his 27-per-cent stake in the team.

The situation has put the team's local partners, led by David Freeman, in an awful predicament. The Predators have an agreement with the city where $50-million is guaranteed in the event of a relocation, but Boots was on the hook for close to $10-million of that.

With that money no longer in play, the team's plum deal is in jeopardy.

Which comes back to this:
Vanderbilt economist John Vrooman, who specializes in the business of sports, said the NHL is "behind the other leagues" when it comes to checking the backgrounds and financial status of its owners.
You don't say?

Freeman has said all of the right things in the interim, but this is a headache he and his local partners didn't deserve. And I guarantee they've been rethinking their "partnership" with the NHL.

In the meantime, we've heard very little (re: nothing) regarding the fact AEG had essentially purchased a share in the Predators via Boots, a situation that likely was legal under the NHL constitution only because the amount was so small (i.e. under 5 per cent).

If that is the case, one would expect clarification from the league to be forthcoming.

Del Biaggio criminal probe looks at NHL deal
San Jose Mercury News


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Sunday, June 08, 2008

Boots owes Anschutz money

When I'd linked to Boots Del Biaggio's bankruptcy documents late last week, I should have taken a closer look at the creditors section.

For one, it tells us that he owes American Express $85.

More importantly, there's a $7-million "business debt" from AEG, Anschutz Entertainment Group, the parent company that (a) owns the Los Angeles Kings and (b) had been the driving force financing Mr. Del Biaggio's pursuit of a team in Kansas City, where AEG has an empty building:

The AEG connection is puzzling given we'd heard they had cut ties with Boots and that the Nashville buy was not connected to a relocation to Missouri:
Del Biaggio, along with partner Warren Woo, owns almost 32 percent of the Predators, making him the second-largest investor in the franchise. When the club was for sale last summer, Del Biaggio severed his ties with AEG and joined a consortium of Nashville-area businessmen and bought the Predators.
The San Jose Mercury News, which has been following the saga with almost daily updates, broke down the list of Boots's creditors, saying of AEG: "It is unclear why Del Biaggio owes the company money."

The obvious question to ask is if one red cent of that $7-million was used in the purchase of the Predators. If so, it's an apparent case of the owner of one franchise buying into another in the hopes of relocating it to a building operated by the first franchise's ownership group.

And that's tricky business indeed.

Tom Benjamin called similar dealings with Boots, AEG and the Penguins "incestuous" in January, 2007, but his money quote with regards to Del Biaggio came a little later in the post.

"According to the Pittsburgh papers he has deep pockets, but I've got doubts."

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Friday, June 06, 2008

Nashville group speaks

"Here’s the bottom line for the citizens of Nashville and fans of the Predators: regardless of how many lawsuits are filed against Mr. Del Biaggio, regardless of the amounts of the claims, regardless of the details of the allegations, Mr. Del Biaggio’s problems are personal. Mr. Del Biaggio is a minority owner. His minority ownership stake and its final disposition will not impact operation of the club. It is my hope and anticipation that the club will be even stronger once this saga reaches its logical conclusion and Mr. Del Biaggio is no longer associated with the club."
"These boots are made for walking, and that's just what they'll do ... one of these days these boots are gonna walk all over you."

Thus ends the tenure of Mr. Boots as an NHL owner.

Freeman had welcomed his new investor with open arms last August, saying "we want to tap into his contacts and his experience."

Now? "Obviously, I cannot and will not comment on Mr. Del Biaggio’s personal situation."

Then? "If the opportunity ever presents itself in the future, where through NHL expansion he happens to get presented with an opportunity, then we will buy him out and shake hands and wish him the very best of luck wherever else he might go," Freeman said.

Best of luck, Boots.

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Boots turns to Balsillie

It wasn't all that long ago that Boots Del Biaggio and Jim Balsillie were seen as in competition for the same entity, two well-moneyed (or so we heard) investors looking to purchase the Nashville Predators.

Now, with Boots in trouble — and is there ever a heap of it — we learn that he turned to Balsillie to get him out of a jam.

After all, if you're facing financial difficulties, what better way to pull out of a hole than to sell to the highest bidder. And, as we've seen previously, Balsille sets the standard in that department:
Mr. Del Biaggio, a California-based financier who is facing fraud allegations and is reportedly under investigation by the U.S. Department of Justice, tried to sell his 27% preferred equity stake in the Tennesse-based NHL franchise and that of his business partner to Mr. Balsillie during a meeting on May 22.

According to sources familiar with the events, a tentative deal was arranged that would have seen Mr. Del Biaggio's combined one-third minority interest, with an estimated book value of US$30-million, transferred to Mr. Balsillie for a "significant premium."
We've seen this story before. And it has a similar ending this time around:
However when an advisor to Mr. Del Biaggio ... informed NHL Commissioner Gary Bettman of the discussions, sources say the 40-year-old investor was discouraged from proceeding with a deal.
This is a story that's been developing over the past few days, one that Toronto radio personality Bob McCown has been following closely but that I didn't hop on due to the ongoing finals. McCown had Balsillie's advisor, Richard Rodier, in studio Wednesday to talk about what Mr. BlackBerry's next step would be, and Rodier dropped some plum hints that this was headed back into the limelight.

Then, last night, McCown revealed that Del Biaggio will file for bankruptcy as soon as today, and broke down some of the backroom shenanigans that have gone on thus far.

When Boots bought 27 per cent of the Nashville franchise with his funny money, several key sections of the agreement would have allowed him to later move that team to Kansas City:
  • he could buyout other partners if the team lost significant cash
  • he could sell his stake if the team was stable
  • he assumed no risk but would claim profits if there were any
A nice deal, all in all, but one that would reportedly not be extended to Balsillie if he took over Boots's share:
...Mr. Del Biaggio delivered a message to Mr. Balsillie's camp on May 23 that the league would not give it blessing to confer the same rights, which had been approved for the troubled U.S. financier, to the Canadian billionaire...
Here's what Rodier told McCown on Wednesday:
"I think it will become apparent in the next week or so that the commissioner's view is that there are no circumstances under which he wants Jim Balsillie in the league if there is a scintilla of chance that he might be able to apply for a relocation of the team to Southern Ontario within seven years."
Nevermind next week — it took less than two days.

And now there's absolutely no question what Balsillie's facing from the league offices.

One more pertinent point here: Rodier also indicated Wednesday that he believed Balsillie could put together a deal for an NHL team by September.

Rodier also seemed to suggest that the difficulty at that point wouldn't be getting the board of governors' approval; it'd be getting to the board vote at all.

Stay tuned.

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