Wednesday, January 20, 2010

Toronto Tabloid Stirs Tempest in Tennessee Teapot

There are certain things in life that occur with striking regularity: the sun rising in the east; University of Tennessee athletes getting arrested for committing felonies; and the Toronto media attempting to cause havoc with the Nashville Predators. David Shoalts, writing in today's edition of the Toronto Globe and Mail headlines an article entitled "Nashville Eyes Tighter Leash on Predators", the gist of which is that the owners of the Predators may have to pony up additional assets to the City because their internal agreement in their partnership provides for more protection for the partners than for the City. Additionally, a consent decree signed by the owners favors the NHL over the City of Nashville in the event of a default.

The article can be found here:

Reading Shoalts' article brings to mind a bevy of questions, and I would love for Mr. Shoalts to provide some insight into the following:

What is your agenda here? It is apparent that there is one, and don't hide under the veil of "this is newsworthy". Horse manure. Why does the esteemed Toronto Globe and Mail deem it necessary to request documents related to the lease and inner workings of the relationship of the Predators and the City of Nashville? And who has supplied those documents to you- documents between a private partnership and the City of Nashville?

Once you had those documents, why did you seek out Rusty Lawrence? Ostensibly, he is Chairman of the Nashville Sports Authority's Finance committee; practically, he knows little to nothing about the lease arrangement.  C'mon David, getting a reasonable answer from Rusty regarding this lease is like asking you to endorse hockey in, say... Nashville. Frankly, using Rusty as a reliable font of information on this lease is a fool's errand. And yes, that is an indictment of Rusty, and by extension, the Nashville Sports Authority, but there ya go.

I'm telling you David, Rusty doesn't even know how many people are showing up at the hockey games, even though those figures are reported monthly to the Sports Authority. Does that give you a sense of confidence that this is a man with a real understanding of the lease? Or was Rusty just an easy mark for you and your paper? A real rube, right?

There is concern that the Predators could move after this season if the average attendance is below 14,000, according to Rusty. The clause in the lease actually says that it must be below 14,000 for two consecutve years. You might want to do a little research on this one, but the attendance has been above this mark since the new ownership purchased the team.

And the $20MM loss clause that provides an out is not in play. Not even close. Unless you asked Rusty about this information.

There seems to be some consternation on the part of Rusty that the guarantees executed by the partners limit their liability to the city to the percentage of their ownership in the Predators. By contrast, the owners guarantees to the NHL are stronger and they do not get an out if they file bankruptcy. Furthermore, there was a consent decree signed by the owners that gave the NHL the right to be named the primary creditor in the event of a bankruptcy or default and subordinate every other claim, including one that the City of Nashville might have.

I don't know about you, David, but it sounds like the owners negotiated a pretty nice deal with the City, better than they could with the NHL. And the problem with that is...?

Look, the City of Nashville can have a big concrete barn that sits empty most nights, or they can have a tenant that brings people downtown and generates hundreds of thousands of dollars in tax revenue over 41 nights a year. Smarter people than Rusty knew this, and they were accommodating in regards to the negotiated lease. Nothing wrong with that.

But now you have stirred up someone who really isn't attuned to what is going on and he wants to renegotiate. Again, what's your agenda here? Regardless of that agenda, the Predators are not in default and have met the terms of the lease as negotiated. Don't like your lease, City of Nashville? Then your time to change it is when it is up for re-negotiation, not in mid term.

Look, these owners believed in hockey in Nashville enough to put up personal guarantees. Now, I'm just a lowly blogger here, but I suspect you could use the vast resources of your tabloid to find out how many other owners personally guarantee the arena lease of their hockey club. I'm gonna offer you a bet. I think it is under five. If I'm wrong, I will buy you a steak dinner (caveat: you gotta come to Nashville to get it).

I know, David, that you are going to hang your hat on the fact that the majority owner, David Freeman, has a $3.3MM lien filed against him for underpayment of his 2008 taxes. This resulted, as Freeman has publicly stated, from the con that Boots Del Biaggio perpetrated on him to buy the 27% interest in the team. When the con came unraveled all of a sudden, there was a $46MM hole that had to be plugged because Boots couldn't pony up the money. Freeman did it, which indicates to me that the guy has a bit of financial horsepower. However, the transaction caused his taxes to be recalculated and he owes the aforementioned $3.3MM. Now, I know I can't just whip out the ol' personal checkbook and write a check like that, at least not without making a dent in my wife's grocery money allowance. How about you? No? Didn't think so.

So yes, there is a concern over a potential default, a technical default, perhaps, because an owner did not notify the City of a material change in his financial condition. I can tell you, after thirty years in the financial services industry, there are defaults, and then there are defaults. As long a Freeman rectifies his situation with the IRS, which he says he will this month, this is not a default that would cause the City to lose money or the Predators to leave Nashville.

So I go back to my original question, David- what's your agenda? Hate hockey in Nashville? Don't like the fact that the Predators are currently fourth in the Western Conference, while Toronto is, uh let me look waaaay down there in those Eastern Conference standings, oh, there they are, 14th? Don't want any hockey below the 49th parallel? Hell, just throw it out there. We hockey fans in Nashville have endured the baseless attacks and snide remarks before. We will continue to do so. And hockey will continue to grow deep roots and thrive in Nashville.

A friendly word of advice- you might not want to rely on Rusty for your insight and information about what is going on. Citing him as an authoritative figure might do lasting harm to whatever journalistic credibility you might have.

The optics on this look bad. The last time someone was getting documents from the city government and then feeding them back to selected officials was when that bottomfeeder Richard Rodier was stirring up trouble. Your article smacks of that.

I have read your writings for years- good stuff. You're a good writer. But this is a hack job, and it is not appreciated. And candidly, we don't want tabloids in Toronto stirring up tempests in Tennessee.


  1. Make 'em bleed maple syrup. Fantastic post, as always.

  2. Welcome to the bullshit that is David Shoalts and the G&M. They're just awful.

  3. This is the best blog on this longstanding issue I've read. Congratulations and thanks.

  4. Thanks for the clearly expressed response. I'm left wondering why editors at a reasonably respected publication like the Globe and Mail would not flag the Shoalts piece before it went to press. There is no excuse for dimwitted Rusty Lawrence.

  5. Sir, this deserves a T.V. timeout standing O..Very, very well done.

  6. Thank you all for your kind words and response

  7. You tell 'em Marky-Mark! I-I-I st-t-t-utter.