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Update on Tom Hicks' Ownership Situation With the Texas Rangers

This comes via the great Adam J. Morris at Lone Star Ball, who you should be reading daily as it is anyway. If you really needed a reason, it's because Adam has done such a solid job of covering not only the Rangers' ownership bidding process but also why the Rangers, and now the Stars, have been hamstrung by Hicks' financial problems.

First things first, you probably heard a few weeks ago that Hicks was putting together an investment group that included Roger Staubach and Nolan Ryan in the hopes that he'd be able to maintain control of the club. That appears to have been step one in that process. Step two involved negotiating an extension with Fox Sports Net, which holds the cable rights to the Rangers until 2015.

That extra step would have allowed for an immediate cash infusion to help pay down Hicks Sports Group's debt, but would have also allowed for the possibility of lowered television revenue down the road. Which is something MLB clearly didn't like, so they put the kibosh on those talks according to Evan Grant at The Dallas Morning News.

According to Grant, MLB's intervention here all but guarantees Hicks won't be able to maintain control of the club.

Now why is this important from a Stars' angle?

Star-divide

For one, Hicks Sports Group owns both the Rangers and the Stars. In spite of the insistence by Hicks that all of his teams (Rangers, Stars, and Liverpool FC) are run as separate organizations with the finances of one club having no effect on the other, I can't help but think that it does.

Especially after AJM pointed out the Rangers' debt-to-value ratio skyrocketed between April 2006 and April 2007, a time period during which Hicks partnered up with George Gillett to purchase storied Liverpool F.C. Hicks has been a cheapskate when it comes to financially supporting the Rangers. The last few years, their payroll has been closer to the bottom third of major league teams even though Dallas/Fort Worth is the fifth largest media market in the United States.

The Stars had become immune to all these struggles in part because of the post-lockout salary cap. But last off season, they got burned when Hicks announced their offseason budget would be about $10 million below the cap.

That's the bad news. As for the good news?

Now I'm not a sports economist by any means. But up until last season, the Stars had spent up to the cap every year since the lockout. That's despite having debt-to-value ratios that have hovered between 70 and 80 percent after the lockout. Last year, the DTV was 81%, in part because the value of the franchise went down.

Get the Rangers and their debt off the books and that figure ought to go up, thus freeing up some much needed cash in time for the next off season.

Unless Hicks decides to do something crazy like use that freed up credit to help build a new stadium to replace Anfield.

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Ugh.

He’ll use any money he frees up for whatever he feels is the better investment. If he thinks a new stadium will generate more revenue than pumping extra money into the Stars >> thus, playoff revenue….then he’ll do it, and we get screwed.

by Brad Gardner on Dec 3, 2009 10:05 AM CST reply actions  

So no big-name D then?

Here’s hoping the money is freed up for all of the promising young talent going RFA and UFA after this season…

by jabudi on Dec 3, 2009 11:33 AM CST reply actions  

OK here's the cap numbers...

http://www.capgeek.com/cap_calculator.php

I just see no way that the Stars can:
1) Pay Neal what he’ll be worth
2) Re-up Turco’s contract for the same or similar money
3) Pay Brunnstrom anything
4) Keep Trevor Daley
5) Keep Grossman by paying him decent

They can do a combination of several of those, but if you pay Neal like a top 6 forward, that leaves about 4 million WITHOUT returning Modano, Lehtinen or Auld. If you give Turco, say, a 1-yr $3 million contract while we get Krahn ready, you pretty much can’t pay the others anything.

I’d say yes to Grossman and Neal, trade Daley and Brunnstrom and take your chances between the other backup goalies. Thoughts?

by jabudi on Dec 3, 2009 11:50 AM CST reply actions  

That would be...

Keep Turco and the other backup goalies…

by jabudi on Dec 3, 2009 11:53 AM CST up reply actions  

They have to re-sign Grossman.

And Neal. Those are musts for me. They’re both RFA’s, so you’d hope they can get it done.

Brunnstrom I send a basket of mini-muffins and my best wishes.

What you do with Turco should be largely based on what happens this year, what players you’re able to keep, which ones WANT to come back (Modano? Lehtinen?) And what your goal is for next season.

Should the team figure it out, play well, get to the 2nd round, and get a little more cash to spend from Hicks, then maybe, maybe I would consider re-signing him. Only if they’re thinking that 2010-2011 might be “the year.”

More likely, the team will miss the playoffs or be dismissed early from the first round. The money will continue to be restricted, and some players like Ott and Neal will be lost. In this scenario I can see the team trying to use a combination of Auld/Climie/Khran and hoping that Beskorowany will be ready a year after that or something if they can’t find someone else.

by Brad Gardner on Dec 3, 2009 1:48 PM CST reply actions  

Keep Neal at all costs...

…as long as he snaps out of his post-suspension funk.

Trade Turco, Brunnstrom, Daley, and Niskanen before the deadline to get one solid D man and some cash.

I know, I know. A guy can dream though.

by Mike Russo on Dec 3, 2009 2:21 PM CST reply actions  

I just have this sneaking suspicion...

That ALL of those guys will end up being brilliant wherever they end up.

by jabudi on Dec 15, 2009 2:58 PM CST up reply actions  

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