Post-Dispatch

06/16/2005





Savvis Inc. said today it is withdrawing from the naming agreement on the downtown sports arena that is the site of Blues hockey and other events.



The naming agreement, which had been due to expire in 2020, is ending with a payment of $5.5 million by Savvis, an information technology company. Kiel Center Partners may keep the Savvis name on the facility at its option, according to a statement released this afternoon.



Rob McCormick, chairman and CEO of Savvis, said the company no longer feels that the naming rights are the best use of its marketing resources. "Further," he said, "as we continue to strengthen our financial position, we view the early discharge of our naming-rights agreement to be in the best interests of our stockholders."



Mark Sauer, president of Kiel Center Partners, said no new name would be put on the building immediately, "but we will begin the search for a new partner that stands to benefit from the association and that will be a good fit with this facility, the community and the St. Louis Blues organization."

KC has a new arena under construction and is looking for an NHL or NBA tenant...

The Blues are not going anywhere! If the Blues were having attendance problems or did not have a nice arena to play I would be worried, but we are in the top 5 in attendance every year and have a great arena. I do not think The NHL would not allow the Blues to leave, we are one of their strongest markets. If Nashville, Carolina or Pittsburgh were to be for sale, they might move, but not the Blues.

ChesterfieldKid03 wrote:The Blues are not going anywhere!

I agree. I don't think the Blues are going anywhere either, but it is always unsettling when you here a sports team is up for sale... you hope they don't sneak off in the middle of the night, Baltimore Colts-style.

That is true, someone could sneak in. But the Lauries are real good people, and I think they will do everything they can to assure the Blues stay in STL. I would not be surprised if they took less money from a buyer wanting to keep the team here, if another buyer offered more money but was going to move the team.

The Blues pay 12.6% in state and local taxes on every $1 of revenue. That is ridiculous. It's like having to pay the payroll tax twice.



With a city so hostile to business, no wonder we've bid farewell to so many great companies (and now, perhaps a great sports team).

I think the tax that the Blues pay is an entertainment/amusement tax, which is different from the tax rate that businesses pay. Still, it's very high.

Just a thought ... but does anyone think this might be a bluff? Is there any chance that the Lauries are just playing hatrd ball to get a better tax deal (which they deserve).

It could be a bluff. I am sure that the city would give tax breaks if they were facing losing the Blues. They would lose more money buy not having a NHL team, so I'm sure tax breaks will be given to whoever buys the Blues.

Lauries Want Out: Team, arena lease on block

By Bernie Miklasz

? 2005, St. Louis Post-Dispatch

06/17/2005



UPDATE:



Bill and Nancy Laurie today announced that they are seeking a buyer for the St. Louis Blues, citing losses from the hockey team and the operation of Savvis Center that have exceeded $225 million since the building opened in late 1994.



In the official confirmation of the announcement that was revealed by the Post-Dispatch earlier today, Blues President Mark Sauer cited a heavy burden on the team from "the current high sales and amusement taxes and the absence of city, county and state financial support of the debt service and operations of Savvis Center."



The announcement noted the Lauries' unsuccessful attempt to bring an NBA franchise to St. Louis and the Blues inability to get relief from the city and the state of Missouri.



"Despite our substantial efforts over the last five years," Sauer said in the statement, "we have been unable to get the Blues and the Savvis Center anywhere close to a combined financial break-even in our projections.



"This leaves us with no other choice but to search for a new owner who may be able to address and hopefully better balance the financial interrelationships between the Blues, the Savvis Center and the public sector."



St. Louis Mayor Francis Slay will work to keep the Blues in the city, his chief of staff Jeff Rainford said Friday.



Rainford said the Blues are important to St. Louis, both for the jobs they bring to the city-owned Savvis Center and the increased traffic they spark at area restaurants, hotels and other businesses, particularly in the winter months.



"They bring a lot of excitement downtown," Rainford said.



He said the city received $2.8 million in taxes the last full year the Blues played before the strike began, money that is no longer generated, and that the city still pays about $1.5 million annually related to debt from the center's construction costs.



Citing heavy financial losses and concern about the future, St. Louis Blues owners Bill and Nancy Laurie have decided to sell the National Hockey League team and its long-term lease on the Savvis Center.



An official announcement will be made this morning.



Bill and Nancy Laurie were unavailable to comment. But a source close to the Lauries who is familiar with the planned sale said the family's desire is to find a local buyer to keep the Blues in St. Louis.



The Lauries have retained Game Plan LLC, a Boston-based firm, to conduct the search for potential buyers. In recent years Game Plan found new owners for baseball's Los Angeles Dodgers, the National Basketball Association's Boston Celtics and the NHL's Ottawa Senators.



The asking price for the Blues and their arena deal isn't known. But in November, Forbes magazine valued the package at $140 million.



The most recent NHL franchise to be sold, the Mighty Ducks of Anaheim, went for $75 million this year. That price included the team's practice facility.



The Lauries, of Columbia, Mo., have owned the Blues and the team's lease at the city-owned Savvis Center since September 1999. According to a source close to the Lauries, the Blues have lost $60 million over the past two years. And in recent conversations, Blues officials told the Post-Dispatch that combined cash deficits of the team and the Savvis Center have exceeded $225 million since the arena opened in 1994.



Though NHL teams probably will benefit from a more favorable economic system when NHL management reaches a new collective bargaining agreement with the players, the Lauries have concluded that they'll continue to lose a significant amount of money.



A lockout by the league's owners wiped out the 2004-2005 season, leaving Savvis Center dark on many nights that it would have been filled with hockey fans.



The Lauries, through team executives, also have tried but failed to get state and city taxes on tickets reduced. The state gets a sales tax of 7.6 percent, and the city receives an amusement tax of 5 percent, on each dollar collected through ticket sales.



Blues officials in the past have described the overall tax rate of 12.6 percent as the largest confronted by any professional sports team in the United States. And the source close to the Lauries said the tax issue is a major factor in their decision to sell.



The Lauries, heirs to the Wal-Mart fortune, paid $100 million to buy the Blues and their agreement at the arena from Clark Enterprises, a group of 19 prominent local businesses.



Bill Laurie turned to the Blues after the collapse of his bid to purchase the NHL Colorado Avalanche, the NBA Denver Nuggets and the Pepsi Center arena in Denver.



And after buying the Blues, Laurie was turned aside by the National Basketball Association in his attempt to buy the Vancouver Grizzlies and move them to St. Louis. The Grizzlies eventually relocated to Memphis, and Laurie's interest in owning an NBA team here cooled.



The Lauries extended the team's streak of qualifying for the NHL playoffs to 25 seasons, and kept home attendance high through aggressive marketing and several reductions of ticket prices. But the Lauries, like their fans, were frustrated by the Blues' inability to get close to winning a Stanley Cup.



The team's previous ownership group, Clark Enterprises, also absorbed millions in deficits. The group announced at the end of 1998 that it had hired Goldman Sachs, a New York investment bank, to explore its financial options, including a sale.



The partners - including Anheuser-Busch Cos. and Emerson - noted that they had pumped more than $70 million into the team and arena in the four previous years to cover shortfalls.



The red ink has expanded under the Lauries' ownership. They had hoped to add an NBA franchise at the arena to generate more revenue and help cover the building's debt payments and operating expenses.



Just 16 days after snapping up the Blues, the couple announced a deal for the Grizzlies, a struggling franchise that was part of the league's effort to expand to Canada.



The Lauries hoped to move the Grizzlies to St. Louis, but the league signaled its opposition to the plan, suggesting the team needed more time to develop a following north of the border.



The Lauries dropped their bid for the Grizzlies in January 2000.



In addition to putting the Blues and the arena lease on the block, the Lauries are parting company with Savvis Inc., which has been the naming-rights sponsor for the building since 2000.



Savvis announced Thursday that it had negotiated the early termination of its 20-year agreement. The money-losing company said it would pay $5.5 million to extricate itself from the deal.



Although Savvis is proud to have its name on the arena, it decided that ending the agreement makes the best business sense for the company and its shareholders, Chairman Rob McCormick said.



"Naming rights programs are great for reaching consumers and other broad markets, but we believe they are not the best use of marketing resources for a highly targeted provider like Savvis," McCormick said in a news release.



Savvis said that the one-time payment would discharge its existing obligation to pay $62.1 million, in annual installments, through 2020.



"We regret the loss of Savvis as a partner, but we also understand the company's desire to refocus the use of its marketing dollars," said Mark Sauer, president of the Blues. "We do not plan to rename the facility immediately, but we will begin the search for a new partner that stands to benefit from the association and that will be a good fit with this facility, the community and the St. Louis Blues organization."



Savvis agreed in August 2000 to pay $72 million in cash and stock to put its name on the downtown arena for 20 years. The terms called for the company to turn over 750,000 shares of its stock - and no cash - to cover the first six years of the agreement.



At the time the stock was issued, it was worth $5.8 million. At Thursday's closing price of 94 cents a share, that stock would be worth $705,000.



A revised deal called for the company to pay $1.25 million every December from 2002 through 2005, with the money to be deducted from future years' obligations.

I am probably wrong but I think most pro sport team owners look for the tax benefits that financial losses offer. The problem with the Blues and Savvis is that revenues aren't enough to pay debt - a different part of the balance sheet.



The updated PD article makes it sound like the Blues are acknowledging that it can never be a viable business so they underscore the public benefits in order to receive government assistance. They might as well strip away all decorum and stand out on Spruce with a tin cup and cardboard sign.

Here is an article from the Post, as why to anyone would be stupid to move the team out of St. Louis. Like I said, Nashville, Carolina are more likely to find new homes. Attendance is too good in STL, and the TV market is 21st in the country I think, compared to 31 in KC and and 51 in Las Vegas which are cities in the hunt for a NHL team. I just can not see anyone moving the Blues!



Durable fan base makes Blues an attractive purchase



BY JEFF GORDON

Post-Dispatch Online Sports Columnist

06/17/2005



St. Louis remains one of the most vibrant markets in the National Hockey League.



Not only have the Blues built the longest streak of playoff appearances in professional sports today, they have maintained steady business at the gate, too. This team has a durable fan base that has outlasted constant player, coach and ownership turnover since the 1960s.



Could the Blues sell to an out-of-towner and move to, say, Kansas City or Las Vegas?



Sure. Anything is possible these days in the NHL.



Commissioner Gary Bettman is the Architect of Doom. One of the hallmarks of his disastrous regime is widespread franchise instability.



The sale of the Mighty Ducks of Anaheim was just approved. The sale of the Pittsburgh Penguins is underway. A number of franchises could change hands in the years ahead as owners flee the Catastrophe that Bettman Built.



Frankly, many current NHL markets SHOULD go away. Will fans in Raleigh, N.C., Sunrise, Fla., Nashville and Columbus still be enthusiastic about hockey in 15, 20, 25 years?



Had Tampa Bay not won a Stanley Cup, I would have thrown them on that list as well. Their parade buys them another five years, anyway.





But St. Louis, by comparison, has supported hockey for nearly 40 years. Even when the franchise shut down in the mid-80s, after the NHL blocked its sale to Saskatoon, the diehard fans remained on board.



Since 1988-89, the team has never drawn less than 87 percent capacity at the Arena and Kiel Center/Savvis Center/The Arena Formerly Know As Savvis Center.



In 13 of those seasons, the team drew better than 94 percent of capacity. In 10 of those seasons, the Blues drew 97 percent or better of capacity.



A prospective buyer would like those numbers. Presumably, a buyer would look deeper and realize that hockey is actually woven into this region?s social fabric.



From 1967, when the Blues emerged as the NHL?s most successful Western expansion franchise, until last season, when 760,976 tickets were sold, folks in these parts have loved their pucks.



What else would explain the Alain Lemieux and Robert Dirk sweaters one encounters at NHL games in Our Town? For a segment of our society, hockey is religion.



Factor in St. Louis? well-earned reputation as a strong sports town and you?re not likely to see the Blues move. If the team did depart, franchises with older arenas and/or less fan support would immediately consider a move-in.





The city?s steep ticket tax is a hurdle, but not insurmountable. Prospective owners would possess the leverage needed to coax a reduction from the city.



Downtown St. Louis needs a hockey team to fill those arena days, draw traffic into the city and give merchants at Union Station and elsewhere significant business. We?ve seen what a winter without hockey did to downtown restaurants, including some that didn?t survive.



Prospective owners will also note that this ticket tax didn?t prevent the Blues from lavishing $7 million, $8 million, $9 million and $10 million salaries on veteran players. The Blues lost upwards of $30 million per year because the Lauries overspent on players by, oh, $30 million per year or so.



(Local politicians saw the same thing, adding to their resistance toward tax breaks. Why should they cut the Blues some slack when that saved money was just going to end up in the pocket of Keith Tkachuk, Doug Weight or Chris Pronger in a huge contract on unrealistic team payroll?)



?Despite our substantial efforts over the past five years, we have been unable to get the Blues and the Savvis Center anywhere close to a combined financial break-even in our projections,? team president Mark Sauer explained Friday.



?This leaves us with no other choice but to search for a new owner who may be able to address and hopefully better balance the financial interrelationships between the Blues, the Savvis Center and the public sector.?





Actually, one choice would have been running the franchise as a business instead of as a Stanley Cup crusade. Prospective new owners will like their chances of slashing those annual deficits with the help of a new collective bargaining agreement, which should cap total player compensation at $34 million to $36 million.



A new owner or ownership group -- having saved pro hockey for St. Louis -- would enjoy several years? grace from local fans. They would have the leeway to make all the tough decisions necessary to make the franchise succeed.



The Penguins sold, despite playing in an antiquated building with limited revenue streams. The Senators sold, despite having all the usual small-market Canadian issues. The Mighty Ducks sold, even in the face of declining fan support and soaring losses in a non-traditional hockey market.



So I believe the Blues will sell, too. A friend in the industry called a few weeks back and marveled at the opportunity here -- to buy low, make all the necessary changes to realign the business, and ride the NHL?s comeback bid.



I?ve got to believe a new investor or new investors with money will see it the same way.

The entertainment/amusement tax is the highest in the country.



The city needs to make some changes to help support sports teams, not dissuade them from sticking it out in the city. Very few people ever seem to look past the trees to see the forest. They'll complain about the rich sports team owners getting tax breaks and whatnot...but fail to realize the economic ramifications of having a professional sports franchise downtown that is guaranteed to play 41 games, bringing revenue and much needed jobs to the downtown area.



Yes the Blues are loosing money, it's the fault of NHL management and the idiot players who want to be paid like baseball players when their sport brings in about 1/50th the revenue. But once the NHL is stabilized, things will begin to look up. First, those involved have to realize that their sport is not a major one revenue wise, and treat it as such.



St. Louis has become a great hockey town, and it would be a shame if somebody would buy the team and move them anywhere else.



I also believe that STL would be better off going after an NBA team.

I have heard the only real candidate in St. Louis for buying the Blues is Mike Shanahan, Sr. He has a net worth (albeit illiquid) > $100mm, used to own the Blues, and loved the experience he had when he owned them.



Seeing that the labor negotiations will probably be resolved before the new owner assumes control, and the city will have to make concessions or see another great organization leave town, hopefully this is the right time for a buyer in St. Louis to step up.

The Post is reporting that Mike Shanahan Jr. is interested in the Blues. He already owns the River Otters in St. Charles.

MattnSTL wrote:The Post is reporting that Mike Shanahan Jr. is interested in the Blues. He already owns the River Otters in St. Charles.

How fitting, a Shanahan would step up, after his father was forced out years ago. The Kiel center Partners are the ones really to blame here, they spent like drunk sailors trying to get a cup in the early to late 1990's and we are still paying for it today.

I wonder if the blues leave if that would open the door for an NBA team to move, or maybe expand again (assuming there's no lockout)

Online Casino Company Makes Bid For Blues

created: 7/5/2005 2:58:40 PM

updated: 7/5/2005 3:53:39 PM



KSDK-Casino Fortune, an online casino company, has told Blues owner Bill Laurie the company is ready to buy the Blues and the Savvis Center.



However, St. Louis Blues President Mark Sauer tells NewsChannel 5 he has not seen any bid from the company, and that company's typically do not send out news releases before attempting to purchase teams. He says the company is, at the least, taking an unusual route in what it says is an attempt to buy the team.



Casino Fortune executives say they hope to travel to St. Louis next week to meet with Bill and Nancy Lauire.



The casino executives say the neither the Lauries nor the NHL have responded to their inquiries into purchasing the Blues. The casino company has not said how much it is offering to buy the team and Savvis Center.



"We understand that hockey's image might have been hurt by the lockout this season, but we believe this is a smart investment and will be financially lucrative in the long run," said Casino Fortune President Dennis Rose in a statement. He also said, "St. Louis has a long standing hockey tradition with a fan base more dedicated than almost any other market. Once the lockout is over, we know this will translate into a successful brand that will flourish for years to come."

The company says it has been searching for a team to buy for more than a year. The company, which says it is the oldest operating online casino in the world, says it does not allow wagers on sports events.



That is something NHL officials would be sure to consider before allowing any sale.







KSDK

<A HREF="http://www.stltoday.com/stltoday/sports ... 627">Blues have deal for new owner</A>

By Jeremy Rutherfordand Tom Timmermann

ST. LOUIS POST-DISPATCH

09/29/2005



The St. Louis Blues have signed a letter of agreement to sell the hockey franchise and the lease to Savvis Center to businessman David Checketts.



Blues President Mark Sauer said that he could not confirm the deal, which was reportedly consummated Wednesday afternoon.



<A HREF="http://www.stltoday.com/stltoday/sports ... 8B001BA627">>>> read more</A>

Subject to league approval. It'll go through.



I wonder if this guy is committed to bringing a possible NBA team here.

"ST. LOUIS -- Dave Checketts' group withdrew from negotiations to buy the St. Louis Blues, putting the team back on the open market Monday. "



http://cbs.sportsline.com/nhl/story/9043600/rss



-- "If local owners are unwilling to pay a premium for the Blues, the door for an out-of-town purchase opens wide. Sauer insists the Lauries want the franchise to remain in St. Louis. But a city like Kansas City, with a new downtown arena and no major tenant, will bend over backward to acquire a team. Kansas City is aligned with folks willing to operate Savvis Center without the Blues, if need be."



http://www.stltoday.com/stltoday/sports ... enDocument



doubt this would happen, but i'd obviously be all for it, considering i watched the blues and went to games at the arena as a kid.



i'm sort of freaked out about this at the same time. i mean, it's the st. louis blues.