yh Posted June 17, 2005 Share Posted June 17, 2005 Here's the full article from the St. Louis Post Dispatch . . Lauries Want Out: Team, arena lease on blockBy Bernie Miklasz© 2005, St. Louis Post-Dispatch06/17/2005Bill Laurie talks with the press after he and wife Nancy announced their purchase of the Blues in Septemer of 1999.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've gotta tell you, I am not the least bit confident that this franchise will continue in St. Louis. I just don't see where the local money is coming from and I don't trust Bill Laurie one bit. He's all about the money and will be quick to "give up" on finding a local owner if someone else comes along with the right price. Link to comment Share on other sites More sharing options...
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