DOGTOWNB&R wrote:^On the flip side, I don't think it is time to celebrate or even be cautiously optimistic. The St. Louis Blues franchise has been held back for decades, due to unstable ownership situations. From the days of the Soloman's, Ralston, Kiel Partners to the Lauries. The previous ownership, the Lauries, did not have an easy time selling this franchise. That is why Bill L. had so much time to run the team into the ground, while trying to sell. The Pronger deal still haunts the Blues. Regarding the obvious, the economy suks, the NHL is not a good buy right now. The NHL depends strictly on gate revenue, due to the fact they have no TV package. If you buy a team, you have to be willing to lose money because you'll have to spend money to win or your attendance will dwindle. The NHL is no easy sell. I understand the Blues have loyal fans and will support a winner. However, the end of the Laurie era and the first few years of the Checketts era show you that this fanbase will dwindle if there is not a winner on the ice. From first hand experience, I was, on some nights, 1 of maybe 15 people in a particular section, during those lean years. It is no sure thing for any potential investor,especially one that will have to front a ton of money. I hope that someone steps up and stabalizes this franchise once and for all.
Go Blues and Go Checketts!
Why I feel better than you do on this:
1. I don’t see this as any time to be pessimistic. For all the boo-hooing that goes on with this site over short-sightedness, it seems to be contagious here. I don’t have any slight thought of the Blues being in danger of moving or shutting down or any other peril.
2. We are dealing with a multibillion dollar private equity firm here, not a family that inherited a buttload of Sam Walton’s stock dividends. These people are in the business of managing successful, boutique businesses, and especially turnarounds. They succeeded, and now they have to diversity into other interests. That’s what the Private Equity business is all about.
3. I see the NHL as a quality buy for a major investor. It’s all about sustainable streams of revenue. With the Blues, you’ve got that and then some, including from seats, concessions, branding, broadcast rights, luxury boxes, merchandising, package deals, etc. Note: Not sure if there is any forms of profit-sharing within the NHL framework.
4. “If you buy a team, you have to be willing to lose money because you'll have to spend money to win or your attendance will dwindle.” You have that with every business investment, risks and the need to recapitalize. The only time when one buys a business like this and does not need to reinvest capital immediately is when the whole package is already set perfectly, in which case the buyer pays a strong premium for the value drivers.
5. The franchise itself is stable. I do not fear doom because the outside source of quick-time revenues have seen their investment goals met. Honestly, that they’re ready to move on bodes strongly to other interests of the Return on Investment apparent from ownership of the Blues.
Why are they selling if they’re making good money? Because Private Equity firms enter deals with two objectives:
1. Return on Investment, and
2. Finite time horizon of investment.
They’ve met both. Now they have to exit, as per the mandates within their limited partners’ private operating memorandums. That’s it. Pools of capital like this need to diversity and rebalance on a quasi-regular basis; the selling of their private shares does this. I’ve been a consultant to Private Equity firms in the last few years and have seen how they operated, so I have a good understanding of what I’m saying when I say that this is not freak-out time.
And not only all that, but Checketts has recently been talking with how many other private investors to buy the Rams? Including prominent StL business leaders like Andy Taylor and Rodger Riney? And don’t forget that big player in Texas who was ready to front the bulk of the cash.
Hops this helps to assuage anxieties.
If I wanted rose-colored glasses, I’d say get an investment group that also has an NBA franchise.
