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Predators sign letter of intent to sell to local group for $193 million

Leipold announced Wednesday he has signed a letter of intent to sell his team to the largely local group. The eight partners put down US$10 million as a deposit toward the purchase price of $193 million.

"I'm thrilled to death the team is staying here," said Leipold.

The only partner from outside the Nashville area is William (Boots) Del Biaggio III, who will have to sell his minority share in the San Jose Sharks as this deal closes.

Leipold said he is excited to pass ownership to a group he knows is committed to Nashville.

"We've certainly, as they say, put our money where our mouth is today," said David Freeman, one of the partners and chief executive officer of 36 Venture Capital LLC.

The bid was less than the $220 million offered by Canadian billionaire Jim Balsillie when Leipold announced May 24 he had signed a letter of intent to sell his team.

But Leipold said Balsillie ruined that deal by trying to move the Predators to Canada before money changed hands.

Balsillie renewed an arena lease in Hamilton, took season ticket deposits using the Predators' logo and applied to the NHL to relocate before applying for ownership.

"Jim Balsillie went his own direction with a rogue lawyer who had no intention of honouring the process of being an NHL owner," Leipold said. "Obviously, we didn't go forward, so we began the process to find a new owner."

The Predators told the NHL during the league's draft in late June not to consider Balsillie's offer.

Leipold had been meeting with Freeman since the first letter of intent was signed. Talks picked up after Leipold backed away from Balsillie.

Del Biaggio previously offered $190 million for the team, and has an agreement with the Sprint Center in Kansas City to own any NHL team relocating there. He will be a minority owner in this deal, and Freeman said there are no circumstances where Del Biaggio could become majority owner.

But he credited Del Biaggio's involvement for helping reduce the amount of debt the group will have. Leipold said the debt would be among the lowest in the NHL.

When asked if Del Biaggio's involvement meant the team's future in Nashville remained in doubt, Freeman said there was no assurance if hockey does not succeed in Tennessee.

"Our belief, as kind of the local group, is that given a second chance Nashville will support this team and that there will be a tremendous overall show of support," said Freeman. "We have obviously agreed to write Craig some pretty large cheques to back up that belief."

The biggest challenge in keeping the team in Nashville?

"Simply buy tickets and show up at games," said Freeman. "That's really it."

They hope to finalize their application later this month and plan to present the deal to the NHL board of governors for approval at a scheduled meeting in mid-September. That would allow the new owners to take over before the season opener on Oct. 4.

"Anything can happen, but having said that, clearly we've gone through the most difficult part of the process right now," Leipold said of completing this sale.

Leipold has been trying to sell his franchise because he said he has lost $70 million since being awarded the team in June 1997. He said he never thought about trying to retain a minority ownership share.

He believes this group and its local ties to businesses will help the Predators succeed in boosting corporate support from 35 per cent. That is nearly half what other NHL teams enjoy.

The group also includes Herb Fritch, CEO of HealthSpring Inc. Freeman said the remaining five Nashvillians will be unveiled in two weeks.

The team still must average 14,000 in paid attendance this season to keep the arena lease in effect after the upcoming season. Freeman said they have no intention of breaking the lease but emphasized the Predators must average enough in ticket sales to collect under the NHL's revenue-sharing plan.

A 15-hour rally July 19 helped sell 726 season tickets, which Leipold called the biggest sales day in the franchise's short history.

"Success to us will mean not just being able to survive financially, but we want the club to win," Freeman said.


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