Jul 30, 2011, 9:00 AM EDT
Vancouver businessman Tom Gaglardi has been the front-runner to purchase the Dallas Stars for quite some time. Friday, Gaglardi took the next step in his quest to buy the Stars from a group of lenders led by Monarch Investments by submitting his proposal to the NHL for approval. By no means does this mean the sale is a done deal—but it’s a necessary step in the process for Gaglardi to finally acquire the team. If no news is good news, then this is great news.
Unfortunately, the sale isn’t as simple as a seller and buyer agreeing to terms and exchanging cash. If it were that easy, the deal would have been done in April when he first acquired the exclusive negotiating rights for the Stars. As Mike Heika of the Dallas Morning News explains, there are plenty of people who are owed money and want a piece of the pie:
“With more than 40 lenders who have legal rights to the Stars, one of the key contentions of the sale will be who gets paid what, as well as who gets paid first. The sale price is not expected to cover the debt, so some lenders will not get paid back.”
“’In a traditional sale, you have a seller who is trying to negotiate with a buyer, and you have traditional sale practices. But this isn’t a traditional sale,’ said one source. ‘You have a group of sellers who have different opinions, and that really means you don’t have a seller, per se. Into that vacuum has stepped a lot of lawyers, and that has made the process very complicated.’”
First, let’s reiterate that this is good news for people who want to see a deal get done. Once the Stars’ sale is behind the organization, they’ll be able to look to the future, set a realistic payroll budget, and once again focus on winning games on the ice. Over the last season, assembling the best team possible has taken a backseat to the ownership issues that have dictated the team’s direction (most notably with Brad Richards). This is a small step forward in the right direction.
At the same time, the situation is looking at a bunch of attorneys and debtors looking to get as much money as possible and a proposal that does not plan on paying all of previous debts. If the NHL approves the proposal, the next step is for the 40 lenders (and their lawyers) to fight in bankruptcy court to receive the best return on their previous investment possible. If the Phoenix Coyotes situation taught us anything, any time “NHL” and “bankruptcy court” are mentioned in the same sentence, it’s best to proceed with caution. Obviously, this is a very different situation—but there are still plenty of moving parts and interested parties for the NHL to appease.
Another point to consider within the context of the bankruptcy hearings is that all other potential ownership groups will be able to submit bids over the course of the proceedings. No matter what figure Gaglardi’s proposal includes, whenever there are names like Texas Rangers CEO Chuck Greenberg and Dallas Mavericks owner Mark Cuban involved (among others), there are bound to be a few fireworks if they’re still interested in the NHL franchise.
Just what the NHL needs: more court cases and legal actions surrounding one of their teams. For the sake of every Stars fan alive, hopefully today’s announcement is the beginning of the end of this drawn-out sale.
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