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Possible lease default brings Nashville Predators, Metro Sports Authority to negotiating table PDF Print E-mail
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Tuesday, 12 January 2010 07:35
The Metro Sports Authority is concerned about whether the team is in a condition of default under its lease agreement for the Metro-owned Sommet Center — and if so, what to do about it.

Authority members are adamant that they do not want to force a showdown with the team by declaring a default, seeking $50 million in liquidated damages and eliminating the city’s National Hockey League franchise. The issue is complicated, however, by the fact that the team may have the ability to exercise an early termination clause later this year, which would require a payment of just $20 million.

 

 In short, if the authority does not declare a default and team decides to leave Nashville anyway, taxpayers would be out $30 million.

Team officials said the issue is moot because the Predators have no intention of leaving Nashville.

“That has never, ever been a question,” team spokesman Gerry Helper said. “That’s why this ownership group stepped up: to keep the team here.”

A federal tax lien against lead team owner David Freeman, and the fact that the lien was not reported to the Sports Authority, may mean that the team is in a condition of default, Sports Authority Finance Committee Chairman Rusty Lawrence said.

The Sports Authority is delaying meetings this month to give itself enough time to address the financial issues.

Sports Authority member Lauren Brisky, Metro Director of Law Sue Cain and private attorney Larry Thrailkill will hold closed-door negotiations with the team this week or early next week, Sports Authority Chairman Arnett Bodenhamer said. Thrailkill has previously worked with Metro on its agreements with the Predators.

“What we’re really going to try and do is negotiate this thing and work it out ... to make sure the Predators remain in Nashville,” Bodenhamer said.

Sports Authority members said their intent is to see if any changes can be made to agreements with the Predators to prevent a default and ensure the team doesn’t leave Nashville, while also protecting the financial interests of the city.

“We’ve got a responsibility to look after, as best we can, this tremendous investment the taxpayers made,” Sports Authority member Steve North said, referring to the cost of the arena and annual Metro subsidies of the team. “Everybody wants to keep the team here. It’s not in the city’s interest or anyone’s interest to see the Predators leave. We certainly want them to be successful and be here for a long time.”

A report on the negotiations is expected at the next meeting of the authority’s finance committee, which has been delayed a week to Jan. 15. The full authority meeting also has been delayed a week and will be held on Jan. 22. Bodenhamer said the meetings are being postponed to ensure the negotiations with the Predators can be discussed.

“It will be addressed at the next meeting,” Bodenhamer said.

In an e-mail, Predators Executive Vice President of Marketing and Communications Derek Perez said the team looks forward to working with the Sports Authority.

Sports Authority members said that their current investigation was spurred by media reports of the tax lien against Freeman rather than the authority’s own oversight of the team’s financial position.

“We wouldn’t have been apprised of it otherwise,” Lawrence said. “That’s the question. Why weren’t we notified?”

Last Updated on Tuesday, 12 January 2010 07:36
 

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