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If the Predators sale is scuttled, a fire sale will likely make them a shell of what they once were
Matthew Sekeres, National Post, With Files From Theresa Tedesco and Michael Traikos
Published: Saturday, June 16, 2007

If the Nashville Predators are not sold by June 30, which seems unlikely now, sources say club owner Craig Leipold is prepared to vastly trim his player payroll next season, even if it means dismantling a Stanley Cup contender.

The so-called scorched earth tactic, reminiscent of baseball's Florida Marlins, is designed to minimize financial losses next season, which will almost certainly approach US$10-million, and force the City of Nashville to buy more tickets if it wants to keep professional hockey in the Tennessee capital. It would also demonstrate to National Hockey League commissioner Gary Bettman, who doesn't want the team relocated to Hamilton, that Nashville is an unsustainable market, which Leipold has repeatedly said.

The city has pledged to purchase tickets for the 2007-08 season in order to reach the 14,000 paid-attendance threshold, which would prevent the team from exercising an escape clause in its lease next year. But sources say that Leipold is willing to make that as expensive as possible for the city, in a strategy that could also force the NHL's hand in approving a sale to Canadian billionaire Jim Balsillie.

Scuttling the ship is an extreme tactic for a sports franchise owner because it breaks the unwritten code with the fans to pursue competitiveness, if not championships. That said, it has been employed by several financially strapped Canadian Football League teams over the years and, most famously, on two occasions

by Major League Baseball's Marlins, who dismantled two World Series teams shortly after their championships, once in preparation for a sale (1998) and a second time to prepare for relocation (2006).

The Predators are considered one of the deepest organizations in the NHL but the fire sale could begin as early as July 1 when marquee free agents such as Peter Forsberg and Paul Kariya could be jettisoned. The club's depth could very well be tested should Leipold, who spent US$40-million on players last season, choose to scale back his hockey budget.

The Wisconsin businessman claims to have lost US$70-million since founding the Predators 10 years ago, including a staggering US$15-million last season and US$26-million in the last two years -- even while drawing from the league's shared-revenue pool. The Nashville business community has recently organized with a goal of selling 3,000 season tickets by October, but it remains unclear whether individual fans will support the team should they feel it is leaving town, or should the on-ice product significantly decrease in quality.

"I have come to the conclusion that I cannot make it work here," Leipold said on the day the sale was announced. "It's painful to say that. As hard as we tried, and as good a team as we had ? we are by far the lowest revenue team in the league."

In fact, he gave notice yesterday at a meeting of the municipal Sports Authority that the club would exercise its right to terminate the lease at the end of the coming season if the ticket conditions were not met.

The Predators sold roughly 9,000 season tickets last year, and a report in The Tennessean newspaper this month said the renewal rate is tracking at 66%. The average paid attendance last year was 13,815. Anything less than 14,000, and the Predators would be free to exercise an exit clause next spring after repaying a prorated portion of the US$25-million the city invested in landing the expansion franchise.

Leipold has often blamed a lack of corporate support for the team's financial shortfalls, and the Predators have become one of the biggest drains on the NHL's shared revenues, receiving more than US$10-million at the end of the 2005-06 season.

Leipold stands to make a small fortune on the sale of the team, more than US$40-million, with a US$238-million sale price that is roughly double the value of the franchise, according to estimates.

On Wednesday, Balsillie, the co-CEO of Research in Motion, was informed that his request to have his relocation application and purchase agreement considered by NHL governors would not be heard on June 19 and 20, meaning there is little chance the sale could close by June 30. Balsillie has made contingency plans to move the franchise to Hamilton.

Balsillie's lawyer, Richard Rodier, said on Wednesday the closing date was arbitrarily set so that Balsillie could gain control of the team before the free-agent signing period begins on July 1. He said some of the "fun" might be sapped for Balsillie, who wanted to be involved in the building of what many believe could be a contending club next year, but that it doesn't mean the deal will collapse.

Instead, Rodier said he had been told that NHL governors don't traditionally hold meetings during the summer and that he assumed the next available time would come in September. What that means is Leipold will be directing the club's hockey operations department and setting the budget for the forthcoming season.

General manager David Poile did not agree to be interviewed, but has previously stated that he has plans to suit each ownership possibility. Either way, it promises to be a busy off-season.

Of the 27 skaters who dressed for the Predators in 2006-07, only 12 have contracts for next season. The dozen represents much of Nashville's core -- goalies Tomas Vokoun and Chris Mason, forward Steve Sullivan and defenceman Shea Weber -- though top scorer Kariya, captain Kimmo Timonen, the club's ice-time leader, and hired gun Forsberg are all unrestricted free agents.

"I assume that there has to be some clarity with the team before players make their decisions," Don Baizley, Kariya's agent, said earlier this week. "In the short run here, it's wait-and-see for sure."

In a Stanley Cup-or-broke deal last February, Poile acquired Forsberg, a former Hart Trophy winner and scoring champion, for forward Scottie Upshall, defenceman Ryan Parent, both former first-round selections, and first-and third-round picks in the upcoming entry draft. The move backfired when Nashville dropped its opening-round playoff series in five games to the San Jose Sharks.

Now, the Predators enter next weekend's draft, traditionally a swap meet, carrying some rich contracts: Vokoun (US$5.3-million), forward Jason Arnott (US$4.5-million), Sullivan and defenceman Marek Zidlicky (both US$3.2-million). In all, the team has US$33-million committed for next season, not including 11 unrestricted free agents.



The story of the Nashville Predators has moved at a breakneck speed since word of the club's potential sale broke last month. Here is a brief look at how the Predators came to be and a synopsis of the developments since the deal to sell the club was announced:

June 1997 Nashville is awarded an NHL expansion franchise at a cost of US$80-million. Craig Leipold founds the club with the aide of US$25-million from the city.

October 10, 1998 The Predators play their first regular-season game, a 1-0 loss to the Florida Panthers, before a sellout crowd of 17,285 at the Nashville Arena (now Sommet Center).

April 2004 The Predators qualify for the Stanley Cup playoffs for the first time and lose in the first round, in six games, to the Detroit Red Wings. (The team has never won a playoff series, winning just four of 16 postseason contests.)

May 24, 2007 Leipold announces a US$238-million deal to sell the team to Kitchener-Waterloo billionaire Jim Balsillie, the co-CEO of Research in Motion, maker of the BlackBerry wireless device. Closing date for the sale is set for June 30 so that Balsillie can direct the team's off-season before the free-agent signing period begins on July 1.

May 25 Nashville's top attorney, Sue Cain, says the Predators cannot invoke an escape clause in the team's lease with the Sommet Center until after the 2007-08 season and only if the team fails to average 14,000 paid attendance per game. Leipold, and later Balsillie's representatives, both indicate that they believe the escape clause can be exercised by June 19.

May 28 NHL commissioner Gary Bettman says that he met with Balsillie and that the latter does not have intentions of relocating the team.

May 30 Balsillie reactivates an agreement with the City of Hamilton for exclusive rights to negotiate a lease for Copps Coliseum.

June 5 The National Post reports that Canada's Competition Bureau is believed to have launched an inquiry into the NHL's relocation policies.

June 9 Nashville's business community announces "Our Team," a campaign to sell 3,000 season tickets for the 2007-08 season.


1,229 Posts
Well with the departure of two of the teams core in Timonen and Hartnell for the return of their 1st rd pick, 23rd overall it may be the beginning of this fire sale, if this team ever does leave to Hamilton, Balsillie might have paid a lot of money for an expansion franchise.

Rumour has it this team may be masquerading as the Philadelphia Flyers next season...;)
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