"We have no concerns about the Stars' ability to carry on," --NHL Vice President Bill Daly, trying to put out the latest brush fire among NHL franchises...
While the NHL is suggesting that there’s nothing to worry about, the details of the financial troubles of Dallas Stars owner Tom Hicks are sending a few shock waves around the NHL this weekend.
Friday’s announcement came out of the blue, as the NHL was forced to acknowledge that the reports from a financial website known as FINaleternatives.com were correct that the owner of the Dallas Stars was in default on some 525 million of American dollars in loans.
In that report, the website broke down the distress of Hicks sports as such, with the company failing to make interest payments on a $350-million bank term loan, a $100-million second-lien loan and a $75-million revolving credit facility. While the loans interest payments were being missed, Hicks himself outlined that he was presently in the process of trying to renegotiate the interest terms on his loans, which involve 40 banks.
FINAlternatives followed that story with a review of the situation on April 4th, in which the news making developments were described by the Hicks group as just a business strategy in which they “decided to withhold last week’s interest payment” in an effort to renegotiate some loan terms and covenants
Dallas is just the latest of NHL franchises to suddenly find itself more of interest to the financial pages than in the Sports section. Phoenix of course has been a financial page mainstay for most of the season and it was only a few weeks ago that the Montreal Canadiens became story 1 in Quebec with talk the George Gillet was looking for a buyer for the storied original six franchise.
Ongoing melodramas have been playing out in Nashville, Tampa Bay and Atlanta to name a few of the more high profile ones, with whispers about other locations as well suffering from attendance woes and financial troubles associated with the current recession.
Dallas however, like Montreal takes the concerns to a whole new level for those involved with the NHL from the league office, through the teams and on to the fan base.
A Stanley Cup champion and one of the success stories of the push to the southern states, up until this news came out many had thought of the Stars as one of the blue prints as to how to run a hockey franchise.
The NHL is expressing little concern over the state of the Stars at the moment, expressing their confidence in Hicks to settle things down, and he himself has said that there is little worry about the banks gaining control of any of his sports franchises (he also is an owner of the Texas Rangers of MLB and co-owns Liverpool of the English Premier League with George Gillet) and has stated that he will continue to pay for the operation of the Stars and the Rangers, though he is looking for like minded investors looking to join him.
While the NHL is officially remaining steadfast in their belief that all is well, the increasing frequency of less than favourable financial information must be starting to be raising eyebrows amongst the other owners, who may see the values of their franchises drop as the economy continues on into recessionary times and once strong franchises begin to shake under the stresses
Much like the world economy of the day, which has government after government seeking a blue print to lead the way out of the difficulties, there seems to be a growing need to see that the NHL is preparing to address these growing problems within the league.
They can say that they’re not worried and that all is well, but the troubling signs are starting to multiply, it would be nice to know if they have a plan in place to address them and head off any future problems, before the events of the day surprise them like they did on Friday, and more importantly for the league to show that they are on top of the situations before the events of the day overtake them.
Globe and Mail-- Stars owner in financial trouble
Dallas News-- Hicks negotiating with lenders over Rangers, Stars debt
ESPN-- Hicks dismisses claims over stateside teams
Fort Worth Star Telegram-- Tom Hicks' sports group misses interest payment