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Preds/Metro Nashville Gov't dispute worth.

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05-22-2006, 07:26 PM
  #1
Bad Karma
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Preds/Metro Nashville Gov't dispute worth.

The Nashville Predators are involved in an off ice fight that has taxpayers on the hook. City officials maintain the team is in breach of its contract because of the team's financial health.

For nearly a year the Predators have been arguing with Metro officials about how much the team is worth -- an important number for Davidson County taxpayers.

When the Predators arrived in the late 90's, taxpayers shelled out $35 million as part of the deal.

In return, the contract with the Predators called for the team to maintain a minimum tangible net worth to protect taxpayers in case the team went bust or left town.

Metro has hired Attorney Larry Thrailkill to attend to the dispute. This week he delivered a letter to the Predators indicating the team is not worth enough to meet the terms of that city contract.

http://www.wsmv.com/Global/story.asp?S=4935092

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05-22-2006, 08:54 PM
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Gnashville
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Some guy in Winnipeg just got a huge Smile on his face. I wonder how long before "the Predators are moving to Winnipeg" rumors start again

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05-22-2006, 10:11 PM
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Seth Lake
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The issue really is what is considered "tanigble assets". The way Metro wrote the contract and how they are interpreting it is that the only assets the Predators have of any worth are tangible items like sticks, pucks, goal nets, etc. The Predators contend that their player contracts are assets as well and that banks have valued the Club's worth at $150 million...far exceeding the minimum net worth required by Metro.

The bottom line is that their is no way the Predators or any other NHL team could meet the minimum net worth number ($35 million I believe - read the article this morning) as Metro is defining "tangible assets". I think that the Predators are going to remain steadfast in their position and that this is going to be going to court to be resolved. Both the Predators and Metro are playing hardball with their views of what "tangible assets" are and I don't believe that either side is going to be budging soon.

I don't have a business degree so maybe I'm wrong here, but...I don't think that this is really a red flag saying that the Predators are going to be moving. I think it is more a case of us seeing that the Metro Sports Authority signed a horrible contract with the Titans at the Coliseum and a below average contract with the Predators at the GEC and now they are taking shots at the teams whenever they can to try to gain some authority and respect.

I've only been in town a little over two years though...so if someone can shed more light on the situation, I'd appreciate it. Thanks!

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05-23-2006, 11:40 AM
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triggrman
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Slake is right, they tried something similar but not exact with the Titans last year.

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05-23-2006, 12:07 PM
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SmokeyClause
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Quote:
Originally Posted by SLake
The issue really is what is considered "tanigble assets". The way Metro wrote the contract and how they are interpreting it is that the only assets the Predators have of any worth are tangible items like sticks, pucks, goal nets, etc. The Predators contend that their player contracts are assets as well and that banks have valued the Club's worth at $150 million...far exceeding the minimum net worth required by Metro.

The bottom line is that their is no way the Predators or any other NHL team could meet the minimum net worth number ($35 million I believe - read the article this morning) as Metro is defining "tangible assets". I think that the Predators are going to remain steadfast in their position and that this is going to be going to court to be resolved. Both the Predators and Metro are playing hardball with their views of what "tangible assets" are and I don't believe that either side is going to be budging soon.

I don't have a business degree so maybe I'm wrong here, but...I don't think that this is really a red flag saying that the Predators are going to be moving. I think it is more a case of us seeing that the Metro Sports Authority signed a horrible contract with the Titans at the Coliseum and a below average contract with the Predators at the GEC and now they are taking shots at the teams whenever they can to try to gain some authority and respect.

I've only been in town a little over two years though...so if someone can shed more light on the situation, I'd appreciate it. Thanks!
I saw the article in the paper yesterday and gave a friend of mine a call. He's not directly linked to the situation but has connections on both sides of the fence. Let me start by saying that this in now way means that the Preds are on their way out. This is a minor contractual squabble that won't amount to much in the long run.

The contentious point here seems to involve the use of the word 'tangible' within the contract, which the Predators don't feel is appropriate. Several times in the contract, the word tangible is used. Many other times, it is not. The Preds feel that because the word tangible is not uniformly used (sometimes the words 'minimum net worth' are used, other times it's 'tangible minimum net worth'), they should not be held to it. In addition to this, the intent of the original contract was, as far as the Predators are concerned, to measure net worth and not just tangible net worth. This is because it would be foolish for any NHL team to agree to such principles because they put an undue burden on the franchise.

Metro more than likely stumbled upon this ambigious wording and is attempting to exploit it. The more tangible net worth the Predators have, the more protection Metro would have in case of a disastrous end to the Predator/Nashville relationship. They don't anticipate any end to the Predators here in Nashville, but when you see a chance to protect yourself, you hire the best and jump at the opportunity. That's all Metro is doing, and that's why Thrailkill is on the case.

If the final ruling were to be in favor of Metro, the Predators would likely attempt to work around this. They don't want to have to pour 8 figures into becoming compliant, so they might agree to revised lease terms that are more favorable to Metro.

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06-13-2006, 12:01 PM
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Seth Lake
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In dispute's latest turn, Predators demand $1M from Metro

http://tennessean.com/apps/pbcs.dll/...WS01/606130349

Should make for some great fodder for Climer's column tomorrow. I see this as posturing, but IMO it certainly cannot play well for the Predators in terms of public opinion with the taxpayers who are not friendly to our sport.

Here is a link to the actual letter sent on behalf of the Predators:
http://tennessean.com/assets/pdf/DN31009613.PDF

It doesn't sound nearly as hostile as the Tennessean makes it out to be (at least not to me) and never mentions the Predators leaving, but does list the Kats, OVC, NIT, and SEC Women's Basketball tournaments, and other sporting events leaving the GEC if capital improvements are not made.


Last edited by Seth Lake: 06-13-2006 at 12:12 PM.
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