News analysis: Predators could be a mess with or without sale

Jim Balsillie has officially begun testing the interest for a team in Ontario, but seeking to move could end his bid -- and the Predators would still be in a pickle, with issues to be resolved

Email | Print By Richard Lawson

06-14-2007 6:42 AM — Jim Balsillie, Canadian billionaire and would-be owner of the Nashville Predators, must have a good deal of confidence that he can move the team to Hamilton, Canada.

Last night, the Hamilton city council approved a deal to house the Preds in an arena there. Balsillie has started a season ticket drive to gauge interest, according to a Canadian wire service. Hamilton is roughly 41 miles from Toronto, where the NHL's Maple Leafs play.

So now we have a city in Canada effectively recruiting the team from here, while folks here are basically recruiting to keep the Predators in Music City.

Oh Canada, the problem is, the deal isn't done, eh. And with all this talk of relocating, it could be that the sale falls apart for Balsillie that same way the one did for the Pittsburgh Penguins late last year – over a stipulation that the team couldn't be moved for seven years. This would be the same stipulation in the deal for the Predators.

If the deal does fall apart and Leipold retains ownership, it doesn't mean that everyone can sit back, wipe his or her brow and say, "Boy that was a close one. We're safe now." Leipold could move the team himself.

Although he has said he wants to keep the team here, he also said he can't make it work in Nashville without substantial corporate sponsorship and ticket sales.

What's more, even if the ticket sales increase to keep the team here, that may not be enough to stem losses, leaving Leipold and the NHL in quite the dilemma – a money-losing team with an owner trying avoid more losses stuck in a long-term lease. The team needs corporate sponsorships in addition to tickets sales to survive.

Simply put, this whole thing could get just plain messy.

While Balsillie reportedly has asked the NHL to relocate the team, there's still that pesky little problem of a lease at the Sommet Center. The NHL isn't in the habit of breaking leases.

There's an out, of course, the much discussed default clause. The city would have a year to get the average paid game attendance to 14,000 if current owner Craig Leipold invokes the default clause early next week. If that isn't accomplished, the lease is broken and the team can move.

Leipold has pleaded to get the corporate community to become more involved. It had helped get the team here in the first place. But the support waned. The team couldn't seem to draw the corporate ticket sales that nearly every other professional sports team in the country can get, even after the team made the playoffs for three straight seasons and had the third best record in the league this past season. He couldn't even get interest from anyone here to buy an ownership interest in the team.

Leipold said enough after $70 million in losses over the 10 years, $15 million last season alone. Balsillie offered $220 million and Leipold thought that was best since the billionaire could handle losses much easier. He thought he found a buyer that would give Nashville a chance. It turns out that he might be wrong about that.

It took Leipold finding that buyer, though, to send a wake up call to the corporate community. Just as a husband realizes that he has been taking his wife for granted for years as she's about to walk out the door on him, the corporate community has realized that the city could lose something that has helped make it what it is today – a professional sports town. The team was, after all, here before the Tennessee Titans. The Predators have been one of the amenities in attracting companies and people here.

Now, the corporate community is paying attention and trying to drum up support. Will it be enough? The money hasn't yet started flowing into the team yet. But the effort only kicked off last Friday with a press conference. Only time will tell if it's more talk than action.

So let's say the deal falls apart and Leipold retains ownership for now. He invokes the clause, giving the city time to get the average attendance to hit its mark. That doesn't mean break-even.

He could be a cold hard businessman and simply gut the team, pay players the league minimum and save money but drive fans away with a loser team and move the Predators himself. Leipold doesn't seem like that kind of guy. But business is business. and every businessman in Nashville who has restructured a business to cut losses to regain profitability should understand.

Of course, Balsillie could just close on the sale with the NHL's relocation stipulation in place and do the same with the team to ensure he could move it to Canada.

Perhaps there's another avenue for keeping the team here, however. If Leipold can't entice Nashville's billionaires and multimillionaires into forming an ownership group to buy the team or at least invest, maybe he could make a quick call to a billionaire who it seems will make the Nashville area his home.

Todd Wagner, a buddy of Dallas Mavericks owner Mark Cuban, recently bought 207 acres in Brentwood on which he apparently plans to build a palace to call home, not to develop into McMansions. Cuban and Wagner started Broadcast.com and sold to Yahoo for more than $5 billion at the height of the Internet bubble. A few years ago, Wagner kicked the tires on buying the NHL's Dallas Stars.

If so inclined, Wagner could curry favor with his new neighbors quite nicely by buying the team himself. Maybe he would sit in a booth in the The Palm's bar after the game for some wine and dinner, just as Leipold does. Then again, billionaires probably don't play that way — but still…