Metro Sports Authority appoints financial liaison to work with the Nashville Predators
The Tennessean reports that Nashville's Metro Sports Authority has appointed one of its members, former Vanderbilt University CFO Lauren Brisky, to act as liaison for the board relative to the financial interest that the city has in the Nashville Predators.
To me, this would seem to be a positive step towards improving the relationship between the Predators and Metro. The initial choice for the role, board member Rusty Lawrence, has often seemed more interested in shaking down the Preds when given the chance, and his public statements wondering about the stability of the team, based on a series of newspaper headlines, were simply reckless.
Since the Predators adjusted Senior VP Gerry Helper's role to act as the team's liaison with city government, hopefully he and Ms. Brisky can work directly with one another to both anticipate and alleviate concerns on both sides.
In short, the city of Nashville has a legitimate financial interest to protect and monitor, and Ms. Brisky sounds well-qualified to oversee it, far more so than "Rusty".
UPDATE 2:
A natural question for observers to ask is, why is Metro concerned about the team going bankrupt?
This issue dates back to the renegotiated arena lease that was signed between the local ownership group and the city in 2008. Included in it was a requirement that the team owners had to submit yearly, certified statements attesting that their net worth met levels proportional to their share of the team, so that the city would have some financial recourse if the team went bankrupt, i.e. there would be some money to go after to recover the city's investment.
The owners have complied with this request, but the Sports Authority realized after the fact that part of each owner's net worth is their stake in the team. In other words, if the team did go under, would the owners' net worth go down the toilet too? In that case, the guarantee wouldn't be worth very much, would it?
This current endeavor appears to be geared towards providing some other avenue of assurance to the city that the team, and/or the owners, can back up the financial promises that have been made by each side. In essence, it's making up for a massive oversight on the city's part in crafting the guarantee requirement.
We do know that at least one member of the team seems to be doing OK; Herb Fritch, CEO of Healthspring, holds 3.78 million shares of the business as of a few days ago. Those shares bounced off lows early this year, and are currently valued at $65 million.
UPDATE: WPLN's report on this story seems to indicate that indeed this might lead to a more professional way of providing oversight:
Sports Authority member Lauren Brisky will review the Predators’ finances in private and report back to the board in January. She’s the former CFO of Vanderbilt University.
Board member Ralph Perrey says it seems like a good idea to avoid open meetings.
“When we speculate in public, that becomes news, not just here but in every NHL city.”
For her part, Brisky refused to answer questions after the meeting.
7 comments
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Comments
This is great news
Ms. Brisky obviously brings a wealth of experience to the task. At the very least she will be able to perceive a bigger picture than Lawrence, whose frequent public “questions” betrayed a woeful lack of grasp.
by Hockey Hillbilly on Dec 18, 2009 3:23 PM EST reply actions 0 recs
I like her already
“For her part, Brisky refused to answer questions after the meeting.”
Hope to see a lot more of that.
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by pwnicholson on Dec 18, 2009 4:19 PM EST reply actions 0 recs
Not sure if this has been correctly reported, Dirk.
Here is the city’s description of the guarantee mechanism, and it appears to be materially different than the way it is reported:
by Gerald on Dec 19, 2009 11:33 AM EST reply actions 0 recs
None of the reporting certainly goes into all of the details, but is there a particular aspect you’re referring to? As I understand it the point of contention right now is the bit in that document at the end of page 4/beginning of page 5, which talks about the guarantees that the owners have to make.
The WPLN story linked above talks about how the Sports Authority realized well after the fact that personal guarantees from the ownership without any detail aren’t worth very much in the event of a team bankruptcy, if a given owner’s wealth was mostly tied up in the team.
More fun than a stick to the face!
On the Forecheck is SB Nation's blog covering the Nashville Predators.
by Dirk Hoag on Dec 19, 2009 4:05 PM EST up reply actions 0 recs
Where to start?
The reporting appears to muddle up the idea of net worth and the personal guarantees. The net worth criteria relate to the net worth of the team, which is required to stay at a certain level. The personal guarantees are something else entirely.
THe guarantee requirement is for a collective $31.25 million, which is divided among the six (if memory serves) shareholders, including Boots at the time. For someone with a decent net worth, as is the case with every member of the ownership team, that is hardly an onerous requirement.
Here is the other thing. Given that the team is required to maintain a certain net worth, that in itself will guarantee that the team is worth something. Even if it were not so, as we have seen from the PHO episode, a team with a substantial negative net worth has an inherent value. As such, it is perfectly acceptable for the team value to be included within the guarantors’ net worth. That value may go up or down, but that is true with respect to all of the guarantors’ assets, whether it be stocks, bonds, houses or any other form of asset.
The filing of net asset reports is hardly anything new. It is pretty standard for guarantors, of course. You may recall that Boots had to do the same with all of the banks with whom he committed his fraud.
THe idea that the asset itself (owneship interest in the team) is included within net worth is neither here nor there, given the requirement to maintain the net worth of the team as a separate covenant.
by Gerald on Dec 20, 2009 8:41 PM EST reply actions 0 recs
Gotcha – one thing I see in the version of the lease that I have is that there is a clause in there that if the team’s net worth dips below the minimum, they can “promptly” bring in another party with sufficient net worth, that basically signs on as well to guarantee that the team will live up to its financial commitments under the agreement.
If, at any time during the Term, the Team Net Worth is less than the Minimum Net Worth Amount, then the Team shall promptly cause an Entity (or Entities (collectively,
the "Guarantor") having a net worth, when combined with the Team Net Worth, equal to or greater than the Minimum Net Worth Amount to execute an agreement, acceptable to the Authority in form and substance, under which such Guarantor unconditionally and irrevocably guarantees (i) the prompt, punctual and full performance by the Team of all of its covenants, obligations and responsibilities under this Agreement, (ii) the prompt, full and punctual payment by the Team of all amounts that it is required to pay hereunder, and (iii) the prompt, punctual and full compliance by the Team of all of the terms and conditions of this Agreement that are applicable to it.
I’m not sure how this agreement enables the Sports Authority to conduct their own investigation outside of the required documents that have been provided, but I do like the fact that they’ve chosen someone with a reasonable professional background (and some discretion) to do the work.
More fun than a stick to the face!
On the Forecheck is SB Nation's blog covering the Nashville Predators.
by Dirk Hoag on Dec 21, 2009 10:13 AM EST up reply actions 0 recs

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