• Presented Without Comment

    by  • October 26, 2011 • NHL • 20 Comments

    Gary Bettman, interview with Ron MacLean, June 2, 2010:

    MacLean: Have you been funding the Dallas Stars?

    Bettman: No.

    MacLean: But Tom’s [Stars owner Tom Hicks] clearly turning back the keys right?

    Bettman (aggrieved): No, he’s selling the club, he isn’t turning back the keys.

    Declaration of Robert L. Hutson, Chief Financial Officer of Dallas Stars, Dallas Arena and StarCenter, and Treasurer of U.S. Holdings, dated September 15, 2011

    60. After months of discussions among [Hicks Sports Group "HSG"], Dallas Stars, the NHL, and the Prepetition HSG Lenders concerning a possible sale of Dallas Stars, on November 9, 2009, the NHL, Mr. Hicks, and Dallas Stars entered into a letter agreement (the “NHL Framework Agreement”), pursuant to which the parties agreed to a framework by which the NHL would oversee a sale process involving Dallas Stars and Dallas Arena. The NHL Framework Agreement provided for the appointment of an NHL Monitor (as defined therein) to oversee the operations of Dallas Stars as well as the ensuing sale process. The NHL Framework Agreement also prescribed limitations on the activities of Dallas Stars and the other Debtors and called for the weekly delivery of certain financial information to the NHL, the First Lien Administrative Agent, and Second Lien Administrative Agent.

    61. In January 2010, Dallas Stars again faced cash flow deficiencies once the Interest Reserve Account had been fully depleted. HSG and Dallas Stars began discussions with the NHL and the Prepetition HSG Lenders with respect to securing additional funds to meet its cash flow needs for the remainder of the 2009-2010 NHL season. On February 1, 2010, after weeks of discussions, Dallas Stars executed a Promissory Note with the Prepetition CFV Lender (together with the other agreements and instruments related thereto, the “Original CFV Debt Agreement”), pursuant to which the Prepetition CFV Lender agreed to make available to Dallas Stars advances in an aggregate principal amount of up to $19,000,000 (the “Original CFV Debt Amount”). Funds advanced under the Original CFV Debt Agreement were made available to the Prepetition CFV Lender pursuant to a non-recourse secured loan facility provided by a subset of the Prepetition HSG Lenders.

    62. As a condition precedent to entering into the Original CFV Debt Agreement, HSGH, HSG, HSG Partnership, and Dallas Arena delivered certain Irrevocable Proxies to the Commissioner, each dated as of January 14, 2010 (the “NHL Proxies”), pursuant to which the Commissioner (as defined in the NHL Proxies) obtained the exclusive right to control the operations of Dallas Stars and Dallas Arena, including authority to cause a sale of Dallas Stars and Dallas Arena. Since the execution of the NHL Proxies, HSG has had no ability to control the Debtors or their respective operations.

    What, you might ask, is the Prepetition CFV Lender? An excellent question. From para. 10 of Mr. Hutson’s declaration:

    Under the Stalking Horse Asset Purchase Agreement (if the Stalking Horse Asset Purchase Agreement is the Asset Purchase Agreement), the Stalking Horse will pay the Claims (the “CFV Claim”) of CFV I LLC, an affiliate of the NHL (the “Prepetition CFV Lender”), in full in Cash upon consummation of the Sale.

    So, to translate the legalese, according to Mr. Hutson on January 14, 2010, the commissioner of the NHL obtained the exclusive right to control the operations of the Dallas Stars and the Dallas Arena, including the authority to cause a sale. Hicks Sports Group had no ability to control the Stars or the Arena, or their operations, from that date forward. On February 1, 2010, Dallas executed a Promissory Note pursuant to which it obtained access to money from CFV I LLC, an affiliate of the NHL.

    Or, put another way:

    MacLean: Have you been funding the Dallas Stars?

    Bettman: No.

    MacLean: But Tom’s [Stars owner Tom Hicks] clearly turning back the keys right?

    Bettman (aggrieved): No, he’s selling the club, he isn’t turning back the keys.

    About

    20 Responses to Presented Without Comment

    1. PopsTwitTar
      October 26, 2011 at

      I am shocked…SHOCKED…that Bettman was gave misleading response to a question about the operations of the NHL and one of its financially distressed clubs.

      In all seriousness, nice find.

    2. October 26, 2011 at

      Sure is noisy down in the basement. Well done. I’d expect this to get a little national play. Not Colie play, but enough to irk Bettman and Daly.

    3. October 26, 2011 at

      This is the #1 reason people hate Bettman. Whenever he opens his mouth you never have a clue if what he is saying is true (mostly it is not). You could probably find a dozen similar untruths about his comments regarding the Phoenix Coyotes situation.

    4. Julian
      October 26, 2011 at

      Nice find Tyler. What a smarmy dink that guy is.

    5. Eric
      October 26, 2011 at

      The NHL will be a healthier league at 26 teams. Just sayin’…

      • Josh
        October 26, 2011 at

        The Stars weren’t in bad shape until Tom Hicks leveraged them to buy Liverpool. They’ll be fine.

    6. Saj
      October 26, 2011 at

      I guess he knows there are no consequences to his lying. His bosses (the owners) surely knew, but to the fans he just wants to market (in this case by suggesting that everything is fine) and I don’t think fans care (in terms of their viewing/purchase decisions) that much whether they are lied to by him or not. If they did, MSM would be doing this research.

      • beingbobbyorr
        October 26, 2011 at

        I don’t think fans care (in terms of their viewing/purchase decisions) that much whether they are lied to by him or not. If they did, MSM would be doing this research.

        The fans (historically) cared about whether the players are treated right, but nobody in the MSM picked up on Alan Eagleson’s propensity to ignore the problems of NHLPA members who weren’t also his clients (see Gillis, Mike) for 25 years (until a bored Russ Conway decided to sniff around after hearing a perfect storm of war stories at a 1970 Bruins alumni event). Color me skeptical about hypotheses of research the hockey MSM — who should collectively be flush with humiliation that ‘a guy in his mom’s basement’ is dekeing them out of their skates on the rink of investigative journalism — might do.

      • E
        October 26, 2011 at

        i’m not sure it matters either way what the fans think of bettman, given that as far as i can tell they all either a) hate him already or b) don’t give a shit, and yet that hasn’t translated into any kind of substantive consequences for the league or it’s profits. i think the msm’s disinterest in this sort of thing stems from the fact that it’s time-consuming research, and why do that when they can have a perfectly good careers just stating whatever random thoughts happen to come into their heads? plus, all this sort of thing is going to accomplish is to alienate people who they have to be friendly with in order to preserve the ‘insider’ status that makes their random thoughts ‘credible’.

        but all this does make me wonder: what exactly would mr. bettman have to do to get himself deposed?

        (and bravo, dellow xiensheng, although one rather wishes you had chosen to make a comment or two.)

        • Tyler Dellow
          October 26, 2011 at

          E –

          I’ve often wished that CBC would require, as part of its TV rights deal, that Bettman spend a day a year under oath with the whole thing filmed and a good lawyer questioning him. Would be fine TV.

          As for the comments – come out next time we watch an Oilers game and I’ll share some views, provided they don’t get repeated.

          • E
            October 27, 2011 at

            deal.

            i will sign whatever form of nondisclosure agreement is customary among your people.

      • May 7, 2014 at

        So who does everyone think will be the Hawk to take him out when we falinly play against him? I’d like to see him leveled over and over again during the first two periods and then have him get annihilated in the third. But thats just me.

    7. Silver
      October 26, 2011 at

      In fairness to Bettman, MacLean asked, “Have YOU been funding the Dallas Stars?”

      Bettman answered honestly, he has not been personally writing checks to the Dallas Stars.

      An aside, David Staples is even more of an idiot regarding the arena than I thought. Just a fucking fucking fucking fucking moron. Or a flat out propagandist, but I have no evidence that he is intelligent enough to pull that off…

      • Milt the Stilt
        October 28, 2011 at

        ad hominem.

      • Tyler Dellow
        October 26, 2011 at

        Not sure the bit about NHL controlling the team was.

        • Bobby
          October 27, 2011 at

          Actually the Commish getting proxy voting rights is a standard part of the NHL’s agreement with teams that take on debt. This basically creates another hoop for the team to jump through, but the league doesn’t actually RUN the team.

          • Bobby
            October 27, 2011 at

            I should say it’s standard for the Commish to take over if the owners gets into trouble with lenders, as Hicks did. This gives the NHL a way to make sure that the best interests of the team and league are looked out for. It’s like the Dodgers situation, where McCourt wants to make a deal with Fox that will help him out personally but may hurt the team, and the league is stepping in.

    8. rolf sackworth
      October 26, 2011 at

      I think anybody who follows this kind of thing knew the NHL had taken control of the Stars quite a while ago. What’s ironic about Tyler’s great find is the implicit point that Bettman wasn’t lying. The NHL wasn’t funding the Stars, it’s shell company, legal entity was. Bettman ain’t stupid, nevertheless the bottom line doesn’t change for him. Another club in serious distress. Hicks rolled over, the club saddled with debt was up for sale, and there were no buyers. Now Gagliardi is apparently low-balling the auction. But why not from his standpoint? He’s as close to a white knight these days as there appears to be.

    9. JonB
      October 28, 2011 at

      The question in my mind is, why do these interviews with Maclean?

      The business health of any particular franchise is nobody’s business except for that owner, the BoG and the Commish.

      I’ve never understood why NHL fan’s and media are so self loathing towards the financial health of the league.

      There are 30 teams, and there will NEVER be a moment in time where one or two franchises (probably more) aren’t being mis-mangaged and therefore placed in financial peril. The Dodgers are in trouble for F&*@# sake

      I agree, Bettman will say whatever he feels like in these interviews and certainly isn’t above lying (can’t he just say “I don’t comment on these issues”)but to hate him for something as silly as this is well silly.

      I just finished reading that oral history book on ESPN and the part regarding Bettman and the negotations with Mark Shapiro and ESPN where the NHL walked away was fascinating. Bettman essentially called ESPN’s bluff and long term it looks like it was a very wise decision. People in the industry were terrified of Shapiro who was used to pushing around sports leagues and getting his way and Bettman stood firm for the leagues interests and won. IMO

    Leave a Reply

    Your email address will not be published. Required fields are marked *