The long sad saga of "Boots" Del Biaggio and the Nashville Predators appears to be coming to an end, as team chairman Tom Cigarran is set to announce this afternoon that the local ownership group has filed a motion with Del Biaggio's bankruptcy trustee to purchase his 27% share of the team for $15.2 million, a healthy discount off the $25 million that Del Biaggio could have demanded under the original terms of his stake. This comes from J.R. Lind's comprehensive article at the Nashville Post:
The trustee in Del Biaggio's Chapter 11 bankruptcy case has requested a hearing Aug. 6 approving the sale of Del Biaggio's 27 percent share in the hockey franchise to the team's cadre of owners for $15.2 million.
Under the terms of the agreement, the ownership group will pay the trustee $5.2 million upfront with payments of $5 million for each of the next two years. In addition, $200 million in claims against Del Biaggio's estate by the National Hockey League, New York-based CIT Lending Services and the Nashville Sports Authority will be withdrawn.
Somewhere, David Shoalts just stroked his mustache and shouted "Curses! Foiled again!"
Follow after the jump for what this means for the next chapter of Nashville Predators history...
When the David Freeman-led group bought the Preds in 2007, they took on a substantial amount of debt to do so. That debt load has represented a drag on the team financially, and one of the first things Tom Cigarran talked about when he assumed the chairmanship was an interest in reducing that debt and strengthening the ownership group by bringing in new partners:
Will you be raising money and bringing more owners into the group?
The existing owners continue to put up capital, but we're going to bring in some new owners. ... When the team was originally financed, it was done in such a short period of time that [Freeman] had to cobble together whatever he could in an incredibly short period of time in order to save the team. This is not a criticism of what he did. It was remarkable that he got it done. But in doing it, there are all kinds of different securities and all kinds of issues with that basic balance sheet financing package that are not characteristic of a stable organization. We have to change that, and we will, and we know how to do it, ... and the idea is we want to have more equity in the team and lower debt.
In practical terms, a significant lifting of the debt burden would reduce overall team costs, and possibly make room for a modest increase to the hockey operations budget. Exact figures, of course, would depend on the particulars involved.
The most obvious candidate to join the group is W. Brett Wilson, a well-known Canadian entrepreneur and philanthropist who has publicly declared his backing for the Preds via Twitter for a couple years now. He has existing business relationships with David Freeman, and in response to a question I posed him in November, mentioned that the Del Biaggio bankruptcy was a holdup in his joining the group previously.
My only question is that if Brett does join the Preds, does that mean David Poile has to enter the Dragon's Den every time he wants to make a major acquisition?
UPDATE: The Preds just sent out the following press release:
Nashville Predators Chairman Tom Cigarran announced today that the Predators ownership group has signed an agreement with the bankruptcy trustee to acquire the entity (Forecheck Investments, LLC) containing ownership shares in the Nashville Predators held by the William "Boots" Del Biaggio bankruptcy estate.
The agreement has been approved by the creditor's committee and has been submitted to the bankruptcy court for final approval. Upon securing approvals from the bankruptcy court, the NHL, the team's lender, and the Sports Authority, the team expects to complete the purchase sometime in August. The shares are being purchased by Predators Holdings, LLC through funding from the local ownership group.
"This is a significant step forward to strengthen our franchise's financial position," Cigarran said. "We have worked with Todd Neilson (trustee for Boots Del Biaggio's estate) to arrive at reasonable terms. This transaction eliminates a significant future liability and allows the Predators to move forward. We are pleased that Warren Woo (who originally joined the ownership group through a minority investment in Forecheck Investments) will continue his involvement in our ownership group. He brings keen insight and knowledge of business and hockey to our group."
The Predators' ownership group is purchasing Del Biaggio's $25 million ownership stake for $15.2 million. In addition, the organization has agreed to withdraw its damage claims against the estate.
Upon completion of this transaction, Predators Holdings, LLC will consist of: Tom Cigarran (Chairman), Herb Fritch, Joel and Holly Dobberpuhl, David Freeman, Chris Cigarran, De Thompson V, John Thompson and Warren Woo. Predators Holdings LLC originally purchased the Predators in December, 2007.