Stars Falling Over Texas

Allow me to go off of the AHL playoff track for a moment for some possibly more pressing matters affecting the state of hockey in Texas. At least if not now, then possibly in the long run.

I'm sure that many of you have somewhat followed the NHL along with following the Aeros and the AHL. So I'm sure that many of you are aware that there has been a lot of whispering over the past year or so regarding the continued viability of many NHL franchises, especially the so-called southern franchises. The NHL, for instance, has taken an active role in attempting to help the Phoenix Coyotes find new ownership while being kept apprised of all significant financial decisions that the team makes. William "Boots" Del Biaggo, part owner of the Nashville Predators, recently pled guilty to securities fraud, with some of the funds from the fraud going to the purchase of the Predators. The Atlanta Thrashers have been embroiled in an ownership fight for years, and reportedly had trouble with meeting payroll this past season. And there have been questions about the stability of Tampa Bay and Florida.

The one team that has never been mentioned is the Dallas Stars. And it is the Dallas Stars, not any of those other teams, which has just recently defaulted on interest payments on its loans. Well, not the Stars exactly, more like the Hicks Sports Group, which owns the Stars and the Texas Rangers of Major League Baseball. And Tom Hicks, the owner of Hicks Sports Group, is currently in default on ten million dollars in interest payments on $525 million in loans from various banks and other lenders. This default could ultimately dislodge the teams from Hicks's control. And supposedly, both teams are now unable to pay both their operating expenses and their debt service.

(Here's an excellent primer from the Dallas Observer, which in turns links to more in-depth articles at the Wall Street Journal and the New York Times.)

Hicks claims that he has defaulted on purpose. He claims that he is attempting to restructure a new deal with his lenders while he tries to find partners for the Rangers and Stars. He wants to negotiate a new deal that makes economic sense going forward for himself, HSG, and the lenders. As the Observer quotes, Hicks says "the current situation simply does not make economic sense."

Hicks claims this is no big deal, but it seems to me that, generally, deals like this are restructured all of the time without defaults. (And a personal aside -- I'm pretty sure that if I were to go into default on my varied student loans that those lenders wouldn't give me the power of figuring out the best way to restructure those loans, they would instead come looking for every bit of money that I possess while doing everything possible to destroy my credit rating.) And that Hicks has gone into default shows a desperation that might lead to his losing control of the teams. Now there are NHL provisions that prevent the lenders from immediately foreclosing on the Stars, and the Wall Street Journal states that lenders have agreed not to take control of the Stars for at least six months.

Now I'm going into full on conjecture mode, but...if the Stars are foreclosed on, it's not a guarantee that the Stars stay in Dallas. The lenders would probably make the deal that gives them the most money. And it's possible that there are some Canadians out there who would love to steal a U.S. franchise.

But what I'm most wondering about is the still non-existent Austin AHL franchise. It's the Stars, and the Hicks Sports Group who are behind the Austin-area arena, and who want to own the AHL franchise. AHL commissioner David Andrews made it clear to us last month that it was nearly a certainty that there would be a franchise in Austin come next season. But what if the Hicks Sports Group has been foreclosed on? What if the lenders are unwilling to follow through on the deal in Austin?

Like I said, that is conjecture on my part. But what isn't conjecture is that Hicks appears to be having some serious financial problems, that he is defaulting on debt payments, and that the Stars are unable to pay operating expenses. I thought of typing this up a last month when I first read about it, but there really weren't many details. Today there are a lot more details, so I thought I would bring it to everybody's attention.

I now return you to your playoff programming.