Time For Interested Buyers to Get their Bids Ready
Blues Chairman Dave Checketts was in town on Wednesday happily announcing a partnership between the Peabody Opera House and BJC Hospital. The Opera House is set to open October first with a show featuring Jay Leno and the Queen of soul Aretha Franklin.
Checketts shed some light on where things stand in regard to the St. Louis Blues sale process, predicting a deal will be completed before the start of the season. Hearing these soft deadlines is nothing new to Blues fans who’ve been down this road before. But eventually something has to give and it appears we’re closing in on this point. Having an agreement in place before the season is doable but in terms of the deal closing and having it approved by the NHL Board of Governors, that could take several more weeks
Anyone who knows Dave Checketts understands he’s a man that likes to manage and operate his businesses. He’s never come across as a guy looking to work under the umbrella of someone else. This is why it was strangle to read in the Globe and Mail that he could be staying on board with a different owner.
“That didn’t come from me,” said Checketts.
Game Plan LLC as well as Checketts has confirmed on multiple occasions that 100% of the team is for sale.
Here’s where things stand.
At some point next week Game Plan LLC is expected to select a deadline date in which all interested groups must formally submit their offer as well as what they will need to include with their bid.
Once all parties submit an offer, Game Plan along with Checketts and the NHL, can proceed and identify the group/individual they’ll sign a negotiating agreement with. The deadline to submit offers should allow the necessary time to get a deal completed before the start of the season.
Who’s involved in the group, the source of equity capital, and how much debt the group has are just a few of areas that will impact each group’s ability to strike a deal. This isn’t a case of who bids the highest has the best crack at signing an agreement. A high number doesn’t mean squat if you can’t stand behind it.
Checketts is facing some pressure as the bank wants to be paid back for a loan that exceeds $100 million. Word is the bank has given Checketts a deadline that he is working off of.
I’ll be interested to see what the Blues actually sell for. Checketts wasn’t interested in justifying a sale price that multiple sources tell me is in the neighborhood of $200 million. That $200 million number is still around $50 million short of what the Dallas Stars are expected to be sold for. Sources familiar with both the Blues and the Stars finances say the financial performance of the Stars is well short of where the Blues currently are. With that being said, one could argue the revenue potential in a market like Dallas exceeds St. Louis.
Whoever buys the Blues will also inherit ownership of the Scottrade center compared to just 50% of the building the Stars play in.
Shortly after Checketts took over the Blues back in 2006, his group paid off the bonds on the arena which means future owners won’t be inheriting any debt on the building. There will be a considerable amount of debt owed to the holding company but not on the actual building. The city currently owns the land the Scottrade Center sits on but the actual bricks belong to the Blues Owners. There is a very, very long management lease but these land leases are not considered unusual.
Game Plan LLC and Checketts are in the process of deciding whether or not they are willing to allow a group to try and work out a an agreement without going through the formal bidding process. As recent as Wednesday, two groups have asked to bypass the formal bidding process and get right down to business. That decision has not been made.
There’s been a lot of talk of three groups already making formal offers but the truth is the formal process has not actually begun. There are a few groups that have suggested what they’d be willing to pay.
In other news Checketts confirmed his days as a Detroit Pistons consultant are over saying he was only assisting in the search for a new Head Coach. I also asked Checketts if he expects to land back in the NBA where he has strong roots as a sports executive, “Someday, yes” he responded. In a conversation Checketts and I had back in March, he expressed how much he missed the NBA.
When you consider where the Blues are today compared to 2006 when Checketts took over, it’s safe to say things have gotten better. When asked how hard it will be to walk away when the team seems to be ready to win he responded, “I’ll be a Blues fan forever.”
More to come,
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