Time running out for investors to finish $193M deal
NASHVILLE, Tenn. -- Time is running out on the $193 million deal that would keep the Predators in Nashville. The problem in negotiations isn't with owner Craig Leipold but between the investors and city officials over the arena lease.
Wednesday had been seen as the last day the Metro Nashville Sports Authority could schedule a meeting to hear and approve lease changes with further authorization also needed from the city council. The investors risk losing exclusive negotiating rights for the Predators on Oct. 31.
The investors' attorney issued a statement that they hope to conclude an agreement by Friday and then work through the authority and council on final approval.
But Nashville officials aren't ready to commit to more taxpayers' money for the team without the investors agreeing first to keep the Predators in town a few years longer.
"As the mayor said to me this morning, if we are going to commit additional dollars to the new owners, then they need to commit to playing hockey at the [Nashville Arena] longer than the current lease requires," attorney Larry Thrailkill said in a letter sent to the attorney representing the investors.
Attorney Chase Cole responded Wednesday night that the letter raised new issues that they want to discuss with the mayor Thursday.
"The local ownership group wants this team to stay forever," Cole said in a statement. "They are, however, working to ensure the team not only stays but succeeds, because it can't do one without the other."
The eight investors put down a nonrefundable $10 million deposit in August, and David Freeman, Herb Fritch and William "Boots" Del Biaggio met with the NHL's executive committee Monday in New York.
Cole said they agree with mayor Karl Dean that no one has a "silver bullet" to guarantee the team's success.
Thrailkill said in his letter that Nashville already pays for the costs of building the arena, which opened in December 1996, and spent $3.2 million in the fiscal year that ended June 30 for operating it.
That didn't count nearly $8 million spent recently for purchases including a new scoreboard.
Metro Nashville wants the eight investors to commit to keeping the Predators at the Nashville Arena for five years more in exchange for upping the money spent on the arena and $6.9 million for additional improvements.
The investors would like changes that include diverting $4.2 million a year in sales taxes and seat fees to the team and building out the arena's rehearsal hall, allowing for the space to be used for other events. They also want incentives to book more events into the arena to boost the earnings.
In Memphis, the NBA's Grizzlies have a non-compete clause in their FedEx Forum operating agreement that helps steer events to the new arena rather than The Pyramid or the Mid-South Coliseum.
Currently, the Predators could leave next June if they don't average 14,000 in paid attendance this season. That clause was triggered when they averaged 13,815 last season.
Thrailkill said city officials are hopeful the team will average the 14,000 paid attendance. But he pointed out Metro Nashville has a binding agreement to keep the team here and in the arena through the 2009-10 season.
If the new owners moved the team before then, city officials also want a guarantee that any new money spent subsidizing the Predators would be completely repaid to Nashville.
"Ultimately, our conversations with the mayor have always been based on the concept that the city and the local investors would work together to offer the community an opportunity -- a second chance -- to keep the NHL in town," Cole said.
"That opportunity will always require that at least 14,000 people also want to keep the team by buying tickets to every game," Cole said.
In the meantime, the Predators are focusing on hockey and not the investors' talks with city officials.
"Our deal is with the buyer, which has an Oct. 31 deadline," said Predators vice president of communications Gerry Helper. "That is what we are still focused on."
Copyright 2007 by The Associated Press
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