Just when Predators fans were settling in for a comfortable summer of franchise building under stable, mostly local ownership, a scandal appears to be unwinding around William "Boots" Del Biaggio, the second-largest member of Predators Holdings LLC
, the group that collectively owns the team.
First, word broke that Del Biaggio is being sued
for obtaining a $3 million loan using a securities account as collateral that, in fact, wasn't his. The SEC is also apparently investigating. Here's one distressing snippet from that article:"he failed to make payment at the end of last month, citing significant financial and other problems."
For someone who is such a key portion of the Nashville ownership, not being in position to make payment on a $3 million loan is a matter of gigantic concern.
Then there's also the news that Boots resigned from Sand Hill Capital
, the firm he cofounded, for "personal reasons." Hardly a good sign, that.
This evening, a new piece up at the San Jose Mercury News brings a local perspective
, which includes word that "within the past several months, friends and associates say, he has separated from his wife and moved out of the [lavish] home on the hill."
The final words of the San Jose article surely sum up the concerns of Predators fans:
"Just how significant are those issues? Del Biaggio and those close to him won't return calls to say. His old office is dark. The gates at his family estate are closed. And many are left wondering what's to become of a man who always seemed to turn up on the town with a ready smile and a soft spot for a good cause."
Now, what might this mean to the Preds ownership group? Imagining a worst-case scenario that sees Del Biaggio financially wiped out, a buyer would have to found for his 32 percent stake in the team, and given the circumstances, that buyer (or buyers) might be able to leverage a discount. It doesn't appear that on an ongoing basis the group would have used Del Biaggio to help chip in to cover for operating losses, as they obtained a $20 million line of credit
to cover such losses as part of the financing of the franchise purchase. Now, is it possible that Del Biaggio's mess could result in some sort of default relative to that financing arrangement? Frankly, I have no idea, but hopefully someone like the Nashville City Paper's
Richard Lawson (whose reporting during the franchise sale last year left local and national competitors in the dust) can start digging. Much like that story, this Del Biaggio affair is a business & legal story, not a sports one.
While it wouldn't appear right now that this will impact the team's operations this summer, I have a feeling that we are in the very early stages of an unfolding drama. So stay tuned, but don't panic.
For further musings on this unfolding drama, see Tom Benjamin