Porking the Chops

While we've been understandably paying more attention to the happenings in Minnesota (and Houston) -- and me with Phoenix -- there have been some more strange things going on up in Des Moines with the non-existent Chops.

As you might remember, Anaheim suddenly ended its affiliation with the Chops, and it came out that the owners of the Chops had failed to make agreed affiliation payments to the Ducks. It also came out that the owners of the Chops used the franchise as a collateral for a loan in 2008, which is a violation of AHL rules.

And this week, the owners informed Des Moines officials that they want to sell the AHL franchise -- possibly to Dallas -- move the team out of Des Moines, then replace the team with a CHL franchise. Des Moines officials (and the people who operate the arena) aren't too thrilled by this plan, and for now, they plan to hold the team owners to a contract signed two years ago which locks the owners into a 10-year non-relocation agreement forbidding the team from moving during the terms of the lease. If the team were to move, then the county would be entitled to liquidated damages, which are currently listed at about $12.5 million.

I'm interested in seeing how this plays out as, it's possible, the AHL could be locked into 28 teams for awhile because of this. This ownership group has burned through two NHL teams in two years, and with the financial shenanigans involving them and the Ducks, I can see other NHL teams being a little hesitant to get into business with them. And I can see the AHL being hesitant to continue doing business with these guys, though, since the guys own one of the 30 AHL franchises, there's not much the AHL can do about it. And with Tom Hicks' financial problems, you've got to wonder if he would be willing eat the $12.5 million in liquidated damages along with the cost of purchasing the team.

But frankly, I've got no idea of what's going to happen with this team. That's the hockey business though, I guess. Fun isn't it.

Okay, So Maybe I'm An Idiot After All

Damn. I was wrong. And I hate admitting that I'm wrong, so you've got to really know that I hate writing this.

I read the press release from the AHL yesterday, and I read some news stories on that press release, and I called BS on Austin actually having a franchise for next season. I thought it would probably happen, but I had some doubts. Most of the doubts were based on a poorly written press release and an interview I did with the AHL commissioner last month.

The commissioner was clear that Edmonton wouldn't sell it's franchise to Dallas even though Edmonton refused to field a franchise. The commissioner stated that the AHL would not, and could not expand.

So when I saw the words "limited membership" and a year to purchase a franchise, I saw that as Dallas having a year to purchase a team and put in Austin, but not yet having an actual team to put in Austin. And nothing that I read yesterday contradicted that reading.

That's because the one thing that could contradict that wasn't published until after I posted my piece. And now it makes sense.

Edmonton is not activating it's team next year. They'll continue to play in Springfield. But Austin will have a team. For one year Austin gets to have a team while Tom Hicks, who hasn't been able to convince anybody to sell him their franchise despite his best efforts, gets to keep trying for one more year -- though it's kind of hard to have faith in Hicks making a best effort at this while he's going into default on debts and trying to sell large shares of his ownership in the Texas Rangers and the Dallas Stars.

So I was wrong. Austin gets to have a hockey team in the AHL for next year. After that, well that's still up for debate. But maybe Edmonton will get off its ass and actually do something about that inactive franchise.

Uh, About That Austin AHL Franchise

So I read the post from earlier today about the provincial awarding of an AHL franchise for Austin to be called the Texas Stars. But I wouldn't be so fast about saying that there will be hockey in Austin this fall.

The deal has one huge contingency. The Dallas Stars still have to purchase a franchise and move it to Austin. Absent that, there will not be a team in Austin because there is no team to put in Austin. But the deal is rather unique in that it is a member of the league without having a team and it will purchase the first team that becomes available for purchase. This will allow Edmonton to keep its inactive team.

Now I fully expect to see hockey in Austin next season. The AHL is doing everything possible to get this deal done, and AHL Commissioner David Andrews was pretty clear last month that there would be AHL hockey in Austin come next fall. But I'm also sure that, at the time, David Andrews didn't know that Tom Hicks was going to start going into default on his debt service involving the Dallas Stars and Texas Rangers.

I hate to be going all negative here because I really look forward to a triangle series next year. And I fully expect it to happen. But there are still some big items on the check list that need to be handled. And I just didn't want anybody to forget.

Now how about those Aeros?

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.

AHL Commissioner David Andrews Talks About Franchise Relocation

“Information is power, right?” AHL Commissioner David Andrews told us last night. And he’s probably right about that, but now we’ve got some information, and I’m not sure that I’m more powerful. But the commissioner shared this information with us, so I’m more than happy to share with all of you.

If you’ve been paying any attention the past several weeks – especially if you’ve been reading us – then you know that franchise relocation is a major topic around AHL circles. Hopefully, I can now provide some answers to lots of those questions.

THE QUAD CITY FLAMES

The primary relocation issue involves the Quad City Flames. And David Andrews is clear when it comes to the Flames. “Quad Cities is clearly not going to have that AHL team next year,” he said. And while he wouldn’t completely rule out a team in the Quad next season – “stranger things have happened” – Calgary should have sent the paperwork into the office this past week – he’s been out of the office since Wednesday and expects to see it when he returns to his office.

Andrews said that the AHL has a strategic plan that it’s following, and that trying to move the league is part of that plan. “Our strategic plan had talked about strengthening our geography,” he said. “And adding Austin fits our strategic plan, and adding Abbotsford does not fit our strategic plan.”

But despite that, he thinks the move will be approved. The league still has to go through a due diligence process in terms of the membership and relocation applications before the issue goes to the board around the end of April. The primary problem standing in the way of the move is Abbotsford’s location. “It’s a long, long way from other teams in our league,” he said. “They have committed to paying travel subsidies which would fully compensate our teams for the air travel to get out there. That certainly will help. I think that without that, the move had no chance. With it, it will still be somewhat of a challenge.”

Three-quarters of the ownership must approve the relocation, which means that eight negative votes could torpedo the deal. He thinks the vote will be close, but he thinks that it will be approved.

“The Calgary Flames have been owners in our league, partners in our league, for 25 years or more. They’re good partners,” he said. “They’re an NHL team, and strong financially, and they believe it’s going to be a very successful market, Abbotsford. There’s a building. There’s lots of momentum behind it. I think a lot of our owners will look at it and say, they’ve been a good partner, they are a good partner, and if they want to go there, as long as it’s not out of pocket for us financially, they’ll support it.”

SPRINGFIELD FALCONS

It was reported the other day that the Edmonton Oilers will be ending their deal with Springfield following the 2010-2011 season, and that they will be seeking to move Springfield to Oklahoma City. In the interim, Edmonton is supposedly trying to entice the Dallas Stars to put a team in Oklahoma City for next season.

“Let me first tell you that Edmonton doesn’t own the Springfield franchise,” Andrews said. Edmonton does own an AHL franchise, but that franchise is inactive whereas Springfield is owned by a group in Springfield. The only thing the AHL is sure of is that “Edmonton has told us that they won’t be Springfield after next year.”

Edmonton/Springfield is important to Texas because of the effect that this has on the plans for the AHL team in Austin.

“The simple solution would be if Edmonton sold their franchise to Austin. We’d be all set,” he said. “But that’s not what Edmonton plans to do. They want to continue to own it.” The franchise is inactive because, essentially, it was too successful. Edmonton moved their AHL team to Edmonton during the NHL lockout, and the team attracted 10,000 fans a game. Apparently, Edmonton was afraid that the Roadrunners AHL team would detract from the Oilers attendance, so the team went inactive.

“They do want to activate their franchise,” Andrews said. “They’re not interested in selling it to Austin. They pay a very hefty fee, and have been now for three or four years to keep the franchise inactive.”

But Edmonton’s indecision regarding this franchise is making things a bit difficult for the AHL. “So they will do something with it,” Andrews said of Edmonton. “Which leaves me with a bit of a quandary because we have only 30 franchises. We’re not going to expand because there’s only 30 NHL partners. And the 30th that we’d like to put in Austin is sitting in Edmonton not available.”

And an AHL franchise in Oklahoma City is only a rumor that’s not about to happen, despite Edmonton visiting the city. There is a CHL franchise in Oklahoma City, and the AHL does not want to interfere with the operations of the CHL.

AUSTIN

Despite Edmonton’s actions with its inactive franchise, Andrews is pretty confident that the AHL will have a franchise in Austin come the start of next season. “I think there’s a very good chance we’ll be in Austin next year,” he said. “Better than good.”

The team that will come to Austin next season will come to Austin in the same way that the Quad City Flames will be coming to Abbotsford, franchise relocation. While Andrews wouldn’t reveal any teams, he made it clear that there are several candidates for Austin.

“We are in discussions with Austin and with a couple of other teams in our league which might have an interest in selling. That should play itself out over the next three-to-four weeks,” he said. “As a league we really want to be there. The Dallas Stars are a pretty good ownership group, Hicks Sports. And it’s a good fit for Houston and San Antonio. We’re going to make every effort to make that happen.”

MISCELLANEOUS

We also briefly discussed the Philadelphia Phantoms who, after this season, will be without a Philadelphia arena. The team is being sold to a group from Pittsburgh, and hopefully, within 3-4 years, will be playing in the Lehigh Valley region of Pennsylvania around Allentown and Bethlehem. But what happens to the team in the interim is still up in the air. There’s a very, very, very, very slight possibility that the Phantoms could be in Austin next season, but Andrews was really dismissive of that and said that Austin isn’t a real option.

So hopefully our little talk with David Andrews has provided everybody with a few answers about what the AHL might look like next season.