Beer Distributor Seeks To Purchase Blues
Posted: Mon Mar 07, 2011 12:24 am
http://www.stltoday.com/sports/hockey/p ... 58c9d.html
NEW YORK • With Dave Checketts' efforts to replace the Blues' major investor still unresolved, an offer has been made to purchase the team outright from Checketts, multiple sources have told the Post-Dispatch.
St. Louis businessman Tom Stillman, who is already a minority owner, is part of a group that presented a formal bid to Checketts' company, SCP Worldwide, to take control of the club. This is the only known offer for the team, an offer sources said was far less than the estimated value of the franchise.
In 2010, Forbes Magazine valued the Blues at $165 million, approximately $15 million more than Checketts paid for the team and the lease on Scottrade Center in 2006.
SCP has rejected the bid from Stillman's group and will continue seeking financial support to replace the Blues' major investor, TowerBrook Capital Partners, and maintain control of the club. It's believed by sources that Checketts would step aside if he was offered his asking price, which is not known at this time, but based on the recent bid he is not ready to sell.
Stillman, who became a minority owner of the Blues in 2007, is the chairman and CEO of Summit Distributing, a St. Louis-based beer distributorship. His investment group includes a couple of "heavy hitters," according to sources, and also has strong St. Louis connections.
It's unknown if a second proposal will be submitted, but multiple sources said that Stillman is committed to gaining majority ownership of the Blues. Under the current arrangement, TowerBrook possesses the largest stake in the team at 75 percent, followed by SCP at slightly more than 10 percent and Stillman at 10 percent.
So a search that began last May and has outlasted two self-imposed deadlines by Checketts is not nearing closure, and now questions are surfacing about when Checketts would have to finalize a deal with new investors or be forced into selling the Blues.
TowerBrook is seemingly in control of that answer. The private-equity firm owns $100 million in equity in the team and 11 months ago announced that it would be divesting its interest. TCP has a friendly business relationship with Checketts and has said that there is no timetable on when it will divest its stake. In fact, in December, Checketts announced that TCP had rethought its position and would maintain a smaller percentage of equity in the team.
Checketts' desire to keep control of the franchise, and TCP's choice to stay on board, have been perceived as decisions based on it currently being a poor seller's market, and the potential of a significant increase in the value of a deal could come after the NHL's new TV contract.
While perhaps smart business, the effects on the continuing investor search have created much unrest among Blues fans, especially considering that Checketts has missed his deadlines.
Checketts, who was unavailable to comment, according to a spokesman, said last fall that his search to replace TowerBrook would be completed by the end of 2010. On Dec. 30, he said that the group was 95 percent assembled and could be presented to the NHL for approval by the league's All-Star game in late January, or in February at the latest.
Now into March and with no conclusion in sight, the lack of new financial support for the Blues has contributed much uncertainty regarding the team's future.
Checketts, who possibly kept the Blues from relocating when he took control of the franchise in 2006, has been seen as a loyal and engaging owner.
However, with the Blues in 13th place in the Western Conference standings, a fan base that has sold out 33 consecutive home games is now questioning the viability of an ownership group that couldn't afford to keep the club afloat during a rash of injuries to key players.
The Blues had a record of 20-12-5 heading into January, which had them seated fifth in the Western Conference. But a mark of 2-8-2 that month dropped them to 13th in the conference, and the team has hovered around that same place in the standings ever since.
That proved critical as the Blues approached the Feb. 28 trade deadline. Though general manager Doug Armstrong said that ownership approved a limited budget increase to add help at the deadline, at six points out and with four teams to climb in the standings, Armstrong took the realistic route and traded key parts to the team.
The Blues made at least one deal that would have happened regardless of their budget situation, trading Erik Johnson and Jay McClement to Colorado for Chris Stewart and Kevin Shattenkirk. But combining the four trades they made, the team dealt five current roster players for two and shed nearly $3 million off this season's payroll.
Many NHL insiders believe that the Blues, who have a payroll of $44.4 million, are in good position financially to improve the roster. But some are apprehensive about the ownership situation, wondering if Checketts is in position to afford the needed upgrades.
After the season, the Blues will be in a key stretch in rebuilding the team. The draft is in June, and with the potential of two second- and two third-round picks, the team could have some bargaining chips in trades. But without the salary flexibility to pay established players who could come in trades, having the extra draft picks might be moot.
The draft will be followed by the start of free agency July 1. If the investor search isn't cleared up by then, it may be a tough task signing players who will have as many questions about the team's ownership situation as the fans.
