Preds, Dean hammer out lease

Arena deal was months in the making By MICHAEL CASS • Staff Writer (Tennessean) • March 1, 2008 The Nashville Predators took the next big step toward securing a long-term future in Music City on Friday, as the team's new owners agreed to detailed terms of a more rewarding arena lease. But the Metro Sports Authority and Metro Council still must approve the agreement before it can take effect. And David Freeman, the leader of the Predators' ownership group, has not yet signed the lease. Freeman said that there was "no significance" to that omission, however, and that he wasn't aware he needed to sign. "This is terrific for the city of Nashville," he said. "We're absolutely committed to the deal." Hockey boosters hailed the deal as one more boost to Nashville's hopes of keeping the NHL team for many years. "It's good to see this moving toward completion in such a way that it encourages the continued presence of the Predators in Nashville," said Ralph Schulz, president and CEO of the Nashville Area Chamber of Commerce. The Predators' mostly local new owners, who say they want to do everything possible to keep the team here, say they need a more generous Sommet Center lease to have a chance financially. They bought the Predators for $193 million from Craig Leipold, who estimated his losses since 1998 at $70 million. Leipold bought the NHL's Minnesota Wild in January, reportedly for an estimated $260 million. The Predators' owners agreed to major lease terms with Mayor Karl Dean's administration on Nov. 16, three weeks before they took control of the team. Attorneys on both sides spent the past three months filling in the blanks, making 3,400 changes to the two primary documents governing the team's relationship with the city. Dean agreed to give the Predators $3 million a year for five years to manage the city-owned Sommet Center, $3.8 million a year in annual operating support and additional incentives to bring more events there. In exchange, the Predators agreed to stay in Nashville for five years. The team actually could leave after the 2009-10 season if it were to lose $20 million in that time and couldn't sell an average of 14,000 tickets a game, but it would repay Metro about $6.8 million a year. Dean said in a statement that he was pleased to see the documents completed. "The amended lease reflects the deal terms we agreed to in November," he said. "I think it is a deal that protects the city's investment while giving the local ownership group a chance to succeed." Preds to get more money One new wrinkle in the proposal would let the Predators keep 100 percent of any payments from the Nashville Convention & Visitors Bureau on top of the $2 million a year in incentives the city previously agreed to. The bureau's president, Butch Spyridon, didn't return a phone call seeking comment on the amount or purpose of such payments. Freeman said the measure would reward the Predators' management for staging events that bring thousands of tourists to town but don't necessarily turn a profit for the arena itself. Rather than splitting the bureau payments with Metro, which the bureau works for, the Predators would keep all of the money. The proposal also appears to clear up a question that held up negotiations several weeks ago. The Predators can assign the lease to another organization, such as the owners' lenders, but must get the sports authority's approval first. The documents also reveal that Freeman, a Nashville venture capitalist, owns 32.63 percent of the team, while California-based William "Boots" Del Biaggio III and Warren Woo together own 31.58 percent. Del Biaggio and Woo are the only owners outside Middle Tennessee right now, though another California-based in vestor is awaiting National Hockey League approval. Nashville health-care executive Herb Fritch has the third-largest interest at 15.79 percent. The sports authority will meet Tuesday, but it's expected to call another meeting to give members more time to review the lease documents before voting. NEW LEASE AT A GLANCE Metro would provide: • $3.8 million a year toward operating Sommet Center for five years, matching 2006's level. • An additional $3 million a year in management fees, rent reduction and other lease changes for five years. The Predators would: • Continue to run the arena. • Get half of all revenues above '06 levels for five years, capped at $2 million a year. • Keep 100 percent of any money paid by the Nashville Convention & Visitors Bureau. • Cap Metro's liability for operating losses at $3.8 million, plus up to 5 percent a year in adjustments. • Agree to stay in Nashville at least five years. They could, however, leave in 2010 if owners lose at least $20 million and paid attendance doesn't average 14,000 a game. — MICHAEL CASS