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Sabres Central

NHL takes over commands of the Sabres ship
By Rick Anderson
June 21, 2002

In a matter of two months, John Rigas's fortune has dissipated so rapidly that he is on the verge of declaring bankruptcy and the Buffalo Sabres had to be taken over by the National Hockey League. It was like a snowball gathering speed and size as it traveled down the mountain top. At the end of the mountain, it had turned into a huge avalanche and buried not only the Rigas family, but the Adelphia Cable giant that he once owned.

It all started with a simple question asked Rigas' son Timothy at the end of a press conference a couple months ago. Tim was asked about the $3.2 billion personal loan that the Rigas family took out which wasn't declared in the stockholder's report. Tim hee hawed about that and it created shock waves in Wall Street that led to Adelphia's stock to plummet from around $40 per share to just pennies on the dollar this past week.

With the collapse of the Adelphia corporation, the fate of the Sabres was left in the wind. No one knew exactly how the Sabres would fare once Adelphia and Rigas filed for Chapter 11. It was because of that the NHL decided to take over running the team until new owners are found.

"We seek a local buyer to purchase and operate the club in Buffalo. That is the goal and that is what we are working on.," said NHL commissioner Gary Bettman after the board of governors in Toronto where the league officially decided to become caretakers of a franchise in turmoil.

The league has been unofficially running the hockey team for the last two weeks, according to Bettman.

"It's simply a continuation of what we've been doing for the last two to three weeks," said Bettman. "We will continue to supervise the club, continue to work with Darcy Regier and the executives to insure that operations continue to as usual."

One of the big factors for the club to remain in Buffalo is to find a group of would-be owners with enough money to finance the team and make it a viable franchise. That is a tall order considering the team owes Adelphia $154 million thanks largely to loans Rigas secured from Adelphia to buy and run the team since he first purchased it. At the time he took over the ownership of the team, it was said that the Sabres were already $80 million in debt. The question is whether some of that $154 million owed Adelphia is part of that inherited debt?

While the league will help secure loans to help finance the team through these difficult times, Bettman emphasized "the league is not, and will not, be responsible for the Sabres' debts."

To attract possible local owners, that debt load will have to be lightened considerably. No one would want to purchase the team for an estimated $110 million and then also be socked with an additional $154 million that they didn't have anything to do with.

But first things first. The league has to approve of the best consortium of possible owners and there are at least two local groups reasonably interested in pursuing purchasing the team. A third group has emerged as of Friday from Rochester who may be interested in moving the team to that city.

Bettman said that Rigas offered to let the league run the club until a new owner could be found.

"Mr. Rigas put in place the mechanisms whereby we would be responsible for supervising the operation of the club, and he did that because he thought that would be best for the club," related Bettman. "I concur with that judgment, and I believe it was an unselfish act on his part."

On top of running the team and shopping it around for new local owners, the league has to find financial support to help the team get through the season if need by. It was approaching a number of banks that deal with lending money to sports franchises.

"There are a lot of banks we have a relationship with," said Bettman.

Bettman made a plea to the Sabres fans to realize that this is the time when they have to be as supportive as possible if they want the team to remain in Buffalo for the long term.

"We're committed to continuing business as usual, but it is now as important as ever that the franchise have local support because we want to make sure any of the prospective purchasers are very excited about the level of local support that the fans demonstrate," emphasized Bettman. "So please buy your tickets."

Darcy Regier has been a man who probably never thought he would have to keep the Sabres ship afloat when he signed a 6-year contract as GM last year. With the Rigas family in hiding, Regier has been the only management face that fans and media can turn to with their thousands of questions concerning the future of the franchise. Regier could probably write a book about the nightmare he has gone through since the Sabres season ended. It probably would be comparative to "All the President's Men" with almost daily disclosures of new scandals by the Rigas family. All the while he has had to present a stoic face and be solid like a rock. His inner emotions would probably betray the calm front he was presenting to the public.

Regier told reporters that the NHL would not be supplying money to sign free agents or paying for future team financial losses.

"The National Hockey League is not going to be in an ownership position with this team," said Regier. "This team needs to stand on its own."

Regier said that the Sabres need to increase their season ticket sales so that prospective buyers will see that the area can indeed be an attractive package.

"We have great hockey fans in Buffalo," Regier related. "Now we have to find more of them."

A year ago, the Sabres sold 9,300 season tickets. A new goal has not been mentioned, but it is apparent that the more the better.

"We're at a little more than 70 percent for season-ticket renewal," projected Regier. "It's a big challenge for all of us. It means we've got to go above and beyond what we've done in the past, because we are without the resources not only of Adelphia, but of some of the synergies that came along with that."

To help bring in more season ticket holders, the team will have to make itself more attractive than last year when they finished out of the playoffs for the first time in years. They have some restricted free agents to sign (including both goalies, Martin Biron and Mika Noronen) along with a few unrestricted free agents. There is also the little matter of the NHL draft being held in Toronto this weekend. Money will have to be available to sign some of those players.

"We're trying to make this as competitive a hockey club as we can," Regier said. "It's something that's very achievable."

There are a lot of uncertainties that lie ahead for this franchise. Will a local group be able to present a sound purchase package, or if no serious bid comes up, then what? The fans will not flock to buy season tickets unless they see some kind of commitment to make the team better than last season. They are not going to shell out thousands of dollars just to make the league Commissioner happy. They need some sort of assurances that the team is serious in providing a competitive hockey team before they will sacrifice some of their essentials to everyday living in order to buy season tickets.

On the other hand, the league will not be able to run the hockey club for more than a year. If the attendance slips and no local group meets the league's qualifications to be serious owners, then the team could quite possibly be sold to groups with more money than they know what to do with. A name that keeps popping up is Paul Allen, the co-founder of Microsoft. Allen has been known to want to put a team in Portland, Oregon. He already owns the Portland Trailblazers of the NBA and the Seattle Seahawks of the NFL.

The one good thing about the NHL taking over the daily operations of the Sabres is that it helps shield the team from being involved in bankruptcy court action. If that were to happen, who knows what would be the final judgement of the court. At least now, by the NHL running the team, it gives the Sabres franchise a little breathing room to look for new owners and a new future in Buffalo.


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