This afternoon the Dallas Morning News (the incomparable Mike Heika) reported that the people who run the Dallas Stars these days are considering hiring an interim team President to help with the business side of things while the sale of the team is still pending. Former Stars president Jeff Cogen left in the summer when his contract with the Stars had expired. He now works in Nashville with the Predators organization.
First, click on over the Mike's post and read the whole thing. There's a lot of information there.
Did you read it? Really? Excellent.
Now let's talk about some more of the interesting points. First, when we say "the people who run the team" what do we mean these days? It's not Tom Hicks. Please don't think that when you buy a ticket to a Stars game, Tom Hicks is going to see a nickel from the sale. Do we mean the NHL? Does the league run the Stars? Despite what you may have heard on the radio around town we don't think it's the case. No, the financials of this team are controlled by "the lenders," the entities who are owed money by HSG and who will reap most or all of the benefit from the sale of this team whenever it happens.
I'm glad we got that out of the way.
A lot of people will look at a long post like Mike's and say "I'm not reading that, what does this mean for the sale of the team?"
They are considering hiring a team President because (and this is the speculation that is out there) they are expecting the sale to drag on and team needs direction in the mean time. Heika's source told him, however, "it's more a matter of doing what's best for the Stars in the event a sale does not happen."
To me this says "buckle in, it's going to be a LONG while." We've gone from "this summer" to "by the start of the season" to "by the end of 2010" to "who the heck knows?" now. The marketplace and unique circumstances surrounding this mess continue to protract this ordeal and hold the team's future hostage, not to mention that of Brad Richards.
Let's look at some of the more interesting sentences from this report...
I was just thinking the other day how nice it's been to focus on the team and what's happening on the ice. I had almost forgot about this mess. I think most of us were content to think that it was going to fade into the background indefinitely until some manner of GOOD news was to be had. Wrong.
Is there news of the actual sale of the team here?
Several people close to the sale say that open dialogue continues every day but that neither side is close to finding a price that makes everyone happy.
Every day. They talk every day and nothing is happening. That's a little disheartening.
The Stars have been running on the monies collected in the summer through ticket sales, advertising and television revenue, but those monies could run out in December.
This is something I ponder in my seat at the AAC. I wonder "is this terrible economic environment and economy going to squeeze the lenders into selling this team sooner? Is the poor attendance actually a good thing in terms of moving this thing along?" Sounds reasonable, right? Like maybe they'd be driven to cutting their losses and getting the heck out of here...? Mike Heika goes on...
The Stars have talked to the NHL about getting an advance on future money that is normally collected by teams after the season, but the lenders could have to be prepared to start covering potential losses as soon as December.
December is coming pretty quick, folks. How far apart are the negotiations, I wonder? At some point the losses endured during the season outweigh holding out for $10 more million. $20 million...$30 million...who close are they?
...some estimates are as high as a $20 million loss if the team does not increase sales and does not make the playoffs.
$20 million dollars. Are the lenders willing to bet $20 million dollars that the Stars will make the playoffs and that attendance and all the revenue streams associated will upswing dramatically this year? Or is this an indication of truly how far apart the bidders are from the price being sought? Just how "low ball" are these bids (or conversely, how much are the lenders looking to overcharge?)
Here is perhaps the most interesting little tidbit from this report for people who think the completion of this sale will solve everything instantly...
In addition, buyers believe they will have to fund losses for at least a couple of seasons, and they are figuring those losses into the price of the team.
Buyers believe they will have to fund losses for at least a couple of seasons. This is where fans need to be brought back down to Earth a bit. Once again this tells us not to expect large expenditure increases in payroll dollars when the sale is complete. The team will not be sold and then immediately start making moves. It might even be several seasons before payroll can increase.
This begs the question: Why does it even matter then if the sale gets completed or not if payroll is going to stay so near to the salary cap floor??
Two words: Brad Richards.
We've been holding out hope that a deal gets done before the All-Star break in order to give Richards' agent and the Stars time to talk about a contract extension before the trade deadline comes. If the Stars are out of the race and a deal is not in place, a trade for assets must be given heavy, heavy consideration by Joe Nieuwendyk (and presumably whoever this potential interim president is.)
That's how we have gotten to where we are, and that's why the lenders are seriously considering putting a person in charge of the team who will look at the immediate budget and also look at ways to increase revenue (or value) for the future.
This president's job would be to find ways to increase profitability, by the sound of it. Perhaps it's like one of those shows on HGTV where people are trying to sell their house and they're not getting the offers they want. Someone comes and takes a look at it and says "Do this, do that, do this, do that and your house will sell for a lot more." Or not.
How anyone could, pardon the expression, "shine up this turd" is beyond me. It certainly seems to we the fans that the players and coaches have more to do with it than anything else, and the last thing these guys need is the pressure to win to make themselves look good through the store window.
If they continue their strong start to the season, however, it would help things out enormously.
The things that we should take away here is this: Tom Hicks is not involved. He's not getting your money. Don't stay away from the AAC because you're waiting for this ownership situation to get sorted out before you go back. Butts in the seats is what this is all about.
Staying away is not phasing the lenders, evidently. They are content to wait. Hiring their own interim president is like taking their proverbial shoes off. They may be deciding to "stay a while."