LA Blue said:
I don't think that $225 million is any kind of outstanding debt the team has to "pay off". That number is the amount of money the Lauries have lost since purchasing the team (money they have already spent), averaging somewhere around 20mil a season. The Blues themselves are not a team in debt to anyone, unless you're talking about the $67 million that is still owed on the lease of the arena. When Laurie bought the team it was in debt besides the arena costs because of several deferred player contracts the team had still left to pay. This is not the case now. Whoever buys the Blues isn't going to have to pony up $225 million, though I'm sure the Lauries will be trying to recoup at least half of that loss through the sale of the team.
Matt
i just have this feeling, after reading the statements by the blues president, that the financial situation of the team is indeed in terrible shape.
presuming the team's only debt is the $ 67 million in arena bonds, the service charge on them has been reported to jump to $7-8 million/year this year. for full control of the revenues of a 21,000 seat arena (
http://www.savviscenter.net/content/press.html ) in a city of 2.5 million, this is still a relatively good deal (actually it's a great deal if the arena is full like it's been).
the ticket tax amounts to $4-5 million per season. with the new cba a realistic payroll would be $ 29 million (the luxury tax threshold as reported by the globe and mail) and adding $ 15 million for administration, marketing, and scouting ... the team expenses would be around $ 55-57 million/year.
in '03-'04 the nhl league revenues were $ 2.1 billion, and it's not unrealistic to expect league revenues to return to this level after a few seasons. this is an average of $ 70 million per team.
st.louis, as a mid market city, could easily expect profits in the neighbourhood of $ 13-15 million/year.
i know these numbers are very arbitrary, but in just about everyone's opinion i've talked to, with a $ 67 million debt, the Blues will be a profitable franchise.
what concerns me is, with what i predict will be the forthcoming knowledge of massive debt for the blues, the laurie's will walk away and basically bankrupt the franchise.
it will cost them virtually nothing, and leave the city/bondholders/banks on the hook.
i hope i'm wrong, but i just can't understand an owner jumping ship at this time if he is actually underwriting the losses.