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Why the Thrashers aren't long for Atlanta (UPDATE: And why the situation is more dire than we first thought)


(...and there's not a damn thing we can do about it.)

Genesis for article right here.

While we've all been on the roller-coaster of lawsuits between members of Atlanta Spirit Group, LLC., and denials of selling the team, to being told ASG was trying to sell the Thrashers as far back as 2005, simple facts are that unless a sugar daddy steps forth (I'm looking at you, John Bongiovi) to be that "new investor" the ownership group has been looking for, the 2011-12 may very well be the last for the team in Philips.

How can this be, you ask?

First, if you want to bring up the idea that ASG needs something to fill 41 arena dates, well, they're losing $20 million a year trying to do it, as it is.  Making/losing $0 is a lot better than losing $20 million a year.

Second, the Thrashers are estimated to be worth $140 million on their own, a Wal-Mart price for anyone wanting to buy a sports team.  ASG may ask for another $20 million to cover the year's losses, bringing the total up to around $160-170 million.

Now, wait, you say, ASG needs that $9 million a year naming rights from Philips...that's what's gonna keep the team here.

Chump change.

That was a 20-year agreement signed in 1999 for $180 million.  Granted Philips Electronics is just dyyyyying to get out from under it (I think it's the most expensive naming agreement in North American pro sports, and there was a tie-in with Turner-Time Warner), and Philips ain't what it used to be (they don't make their own TV sets anymore--remember the bizarre Ambilight TV with the flourescent lights on the side that Bob Hartley used to make radio commercials for?), but we're on the back end (year 12) of that 20 years.  At the end of this year, $72 million will still be due, after next year, $63 million.  With the Spirit offering the team at a Persian rug store "Going Out of Business" price, the next buyer can easily wrap the money ASG expects to lose into the purchase price, not unlike a car dealer wraps the existing loan of an "upside-down" car into the price of a new car.  This easily brings the total price to $240-250 million; remember, the Canadiens went for about $500 million last year.

Now let's suppose those irritating little weasel Ca-necks from either Winnipeg or Quebec City move our team.  Here's where things can get ironic: The Thrashers are on revenue sharing, but don't receive the maximum allowed because their attendance is around 13,000 a game.  (To receive the maximum, you must draw at least 14,000/game, and with only 12 home games left, the Thrashers would have to draw about 16,300/game.)  If they were to move to either Canadian city, not only would they be playing to sellout arenas, but would also get full revenue sharing just for being little Winnipeg or Quebec City.

Finally, as I write this, the Detroit Pistons and the Palace of Auburn Hills are in the process of being sold.  Now just why can't Bruce Levenson, et al, find an investor?

Excuse me while my heart is breaking here in Alabama.

UPDATE (Midnight 2/19/11):

With the sudden news this week from Michael Gearon, Sr. that the team's situation was desperate, I did some quick addition:

Thrashers value: $140 million

Hawks value: $295 million (so says Forbes)

Philips Arena value: $125 million (my guesstimate; if you have better numbers...)

Total: $660 million

Thrashers estimated 2010-11 operating losses: $15-20 million (Gearon's estimate)

Hawks estimated 2009-10 operating losses $7.3 million (again, Forbes, also, Hawks attendance is down 2,000/game despite a higher payroll, so this year will be worse)

Total estimated mininum operating losses from both teams: $22-27 million.

(I don't know if I should add losses to the total value, but I will just for purposes if someone were to buy all properties lock, stock, and barrel): $687 million

Here's the catch: the remaining members of Atlanta Spirit are due to buy out Steve Belkin's share, and if Jeff Schultz's AJC blog is correct, Belkin was 30% of ASG, so he will be due over $200 million!  (Almost 50% more than the value of the Thrashers franchise.)

(CORRECTION: From Jeff Schultz 2/23/11: Belkin's completely gone.)

Another thing to keep in mind: with Philips Arena being privately owned, there is no way a new, outside owner would be able to turn a profit short of sellouts each and every night AND increased rights fees from Thrasher broadcasters considering the remaining members of ASG would retain luxury box money, concessions and what limited parking there is available in the area.  (The owner of the Minnesota North Stars found that out the hard way when he moved the team to Dallas' Reunion Arena in 1993.)

To the handful of people wishing for Arthur Blank: in the words of Rick Pitino, "Arthur Blank ain't walkin' through that door".  Not only is he trying to get an unnecessary new stadium built, he's worried about the expiring NFL CBA and if that will damage the Falcons' season, so he's completely out of the picture.  And as for alleged filmmaker Stephen Rollins, he ain't no Jerry Bruckheimer or Steven Spielberg.

Right now, it feels like we're in Hitler's bunker in late April 1945, and the Russians are closing in...

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