Remember that story I wrote last month stating how the sale of the Dallas Stars would not come anywhere close to the disaster that was the sale of the Texas Rangers? Well, Mike Heika's report last night pretty much blows that theory out of the water as he goes into detail on the multitude of factors that has slowed the sale process of the Stars to a crawl.
I'm not going to be completely rehashing his report so I suggest reading his post in it's entirety here before continuing on. I'm going to be expanding on a few of the revealing news items he's uncovered and much of this will have to do with the future of Brad Richards with Dallas, and even the direction of the team itself.
The most important factor in all this is the confirmation that Tom Hicks has essentially lost all control of the Dallas Stars. Monarch Investment Group and Galatioto Sports Partners, for all intents and purposes, now own the team and are the ones running the sale of the franchise. This is exactly what we didn't need to happen because with the lenders in direct control of the sale they'll be holding out as long as possible to get the value they want out the team, even if the market value is much, much lower than what they're asking for.
It's the worst case scenario and one that is likely to lead to a prolonged holdout: the lenders overvaluing the franchise (no thanks to Forbes) while the buyers significantly undervaluing the franchise. As Heika points out, the recent sales of the Tampa Bay Lighting and Atlanta Thrashers, as well as the bankruptcy process of the Phoenix Coyotes, has significantly lowered the overall value of hockey franchises in the NHL. It's tough for buyers to see southern teams like Tampa Bay sold for $170 million yet have the lenders asking for -- reportedly -- in the neighborhood of $250 to $275 million for the Dallas Stars.
Complicating matters is the uncertainty of future television broadcast contracts and the fact that any new owner will be guaranteed to lose money the first few seasons of their ownership as the build the team back to where it needs to be, rebuilds relationships with the fans and finds a way to make hockey exciting once more. In the buyers' eyes, this lowers the current value of the team yet the lenders are fighting to make sure they get the absolute maximum out of this sale that the can.
The worst and most disturbing part of Heika's post is the reveal that since the lenders are essentially owning the team anyway, they'll be more than willing to extend credit to the Stars once the current funds essentially run out in four months or so. This means that the incredibly restrictive $45 million internal budget the Joe Nieuwendyk is operating with will likely not be lifted before the trade deadline unless a sale completed, miraculously, before February.
This is the doomsday scenario we all had prayed would not happen. Using creative contract structuring, Nieuwendyk has been able to hold onto each and every one of the young and promising players the team couldn't afford to lose, backloading the contracts in order to keep the current payroll under the internal budget restraints. Yet next season, when the larger yearly salaries begin to take effect, Nieuwendyk will be in a much tighter position for personnel decisions unless a sale is completed.
While the cap hits are still manageable the actual payroll numbers will go up and with only three players with significant salaries set to become free agents -- this could cause serious trouble for any moves the Stars had hoped to make either at the trade deadline or over the summer. The biggest worry in all of this, of course, is the effect this will have on the negotiations on a contract extension for Brad Richards.
Let's make this perfectly clear: despite the up and coming Jamie Benn, James Neal, Tom Wandell, Aaron Gagnon or even the continued presence of Mike Ribeiro and Brenden Morrow, the Dallas Stars need Brad Richards. He's the catalyst for the offense and the leader on the power play and he's one of those rare players that makes everyone around him instantly better. He's entering the final season of his contract and he's in that window where an offensive player like him is likely hoping for his one last big long-term contract.
If there is no new ownership in place as we get closer and closer to the trade deadline, there is close to a zero chance that Richards stays with the Stars past February. The picture that Heika paints as far as negotiations at that point -- "it would probably take a meeting between people from the Stars, the lenders, Hicks Sports Group and the NHL to decide exactly what kind of offer could be made and how it might be structured." -- shows a scenario that a contract signing through that method would be near impossible.
That would leave Joe Nieuwendyk with one of the top offensive players in the NHL on his plate at the trade deadline, one whose contract is bound to expire as he tests the waters via free agency and looks for the deal the Stars couldn't afford to make. We've seen this scenario before and usually this ends with the veteran playmaker sent to a contending team for a handful of decent players and -- hopefully -- a decent prospect.
As undesirable as trading him is, it gets even worse when you consider the possibility of losing him for nothing. His cap hit is so large and prohibitive to trade that the scenario of getting nothing is a more realistic one than we care to consider at this point.
The Stars have a good, solid nucleus of young players but need those skilled veterans to round it out. The loss of Richards -- combined with a continued drawn out process of the sale of the team -- would likely place the Stars into actual rebuilding mode. The "treading water" method that Nieuwendyk has used the past year would no longer be viable without Richards and the Stars would almost certainly be better off in the long run by starting fresh and building around Jamie Benn, James Neal and Loui Eriksson.
All of this can be avoided if the sale is completed sometime in the next four months, but currently that doesn't appear to be a possibility at this point. It's unlikely that a buyer will suddenly decide to pay above market value for a team that hasn't made the playoffs in two seasons, has a television broadcast contract expiring in three years (and is no longer tied to the Rangers) and one that has lost money as fan interest has waned. Consequently, the lenders have apparently dug in and are prepared to wait it out until they receiver the value they want for the Dallas Stars.
Perhaps Nieuwendyk could hold out hope the sale is completed before next summer, opt not to trade Richards and work on a new contract then. The risk then, of course, is losing a top ten NHL forward for nothing via free agency.
It's depressing when you realize just what position Tom Hicks' financial missteps have placed this franchise in. While the Texas Rangers were able to not only survive, but actually improve while the team was in bankruptcy and make the playoffs, the Stars won't be able to be in that same position. The MLB is structured differently than the NHL and the Rangers were able to take advantage of teams' abilities to take on cash and salary as part of any deal that is made; the Stars won't have that luxury.
So while the Rangers certainly paid a hefty price for the drawn out sale process, they ended up with a great owner, an incredibly lucrative television contract and an A.L. West title. The Stars meanwhile, until this sale is completed, are stuck in limbo without the ability to truly improve a team that will already struggle to make the playoffs.
With fan interest at an all-time low and the team fighting to show any form of excitement for the coming season, this unfortunate nature of this sale couldn't have come at a worst time.