Atlanta Spirit Group Tried To Sell Thrashers Despite Denials, According To Report

The Thrashers could have been in different ownership hands before the start of the 2005-2006 season. What happened to prevent any sale of the team?

Constantly when asked if the Thrashers are moving,  ownership and management has repeatedly told reporters and fans "no." No, the team's safe. No, the team isn't moving because of an agreement with the NHL prohibiting the discussion of selling the team to an individual with that intention. Was the team ever for sale? The Atlanta Spirit group has also stated that the team was never for sale. Obviously there's a difference between the team actively being sold and if the team was being shopped, and apparently the latter's true.

In a report from the AJC's sports business writer Kristi Swartz, the Thrashers ownership group wanted to sell the team after the 2004-2005 lock-out, and the re-worked CBA that favored owners of small markets through revenue sharing guidelines. The team believed that the new rules benefiting non-traditional teams might make the team attractive to buy, or at least more feasible to someone who might not mind losing money. As described on About.com's explination of the 2005 CBA, the new and more tempting rules are as follows:

Revenue sharing will see the top ten money-making teams contribute to a pool to be distributed among the bottom 15 teams. Teams in markets with more than 2.5 million television households cannot qualify for revenue sharing. That excludes the Rangers, Islanders, Devils, Flyers, Blackhawks, Mighty Ducks and Kings.

The Thrashers are in a non-traditional market, and have been money-losers because of that, which would understandably encourage the Atlanta Spirit to sell. The ASG has filed suit today against the firm that designed the contract with Belkin, and state that the flawed contract has cost the group legal fees as well as lost income. From Ms. Swartz's article:

[The Thrashers have] lost more than $$130 million in operating costs since 2005 – the year Boston-based partner Steve Belkin agreed to sell his 30 percent stake – and the franchise value has dropped by more than $$50 million, according to a lawsuit filed Friday in Fulton County Superior Court....

The Spirit filed a $200 million malpractice lawsuit against King & Spalding Friday, saying the law firm’s negligence cost them millions of dollars and made them "unable to sell or otherwise dispose of the Atlanta Thrashers." King & Spalding’s contract caused the buyout process to "quickly break down into chaos," costing seven of the partners $$14.5 million in legal fees and forcing them to shovel more than $$130 million into the Thrashers to keep the franchise afloat, the lawsuit says.

The most interesting thing isn't necessarily the fact that the Atlanta Spirit Group wanted to try to sell the team, as from a business standpoint it makes perfect sense. The interesting thing is the constant denial that the team was being shopped as a team. The phrase "minor investors" has been batted around to help the ASG pay for operating costs of the team, but the organization and team management - specifically team president Don Waddell - have never admitted that the entire team was itself up for grabs. What's the harm in admitting that the team is for sale? Explain to the public if the team is losing money that it doesn't equate losing the team, but it would be beneficial for the team to have an owner or owners who can afford to cover those losses without the distraction of a massive lawsuit. Stress the fact that the Thrashers are tied to the naming rights of Philips Arena itself. Point out the agreement you have signed with the NHL that you're not allowed to sell the team to anyone who would want to move it.

Teams get bought and sold all of the time without drama. A little over a year ago, the Montreal Canadiens and the Bell Centre were sold to the Molson family. Did that change a thing? Not particularly. The sky didn't fall. The Tampa Bay Lightning were sold from Oren Koules and his business partners to a Boston businessman by the name of Jeff Vinik, who also happens to be the minority owner of the Boston Red Sox. Guess what? Things have improved drastically in Tampa Bay, because they have a competent ownership group who has made wise personnel decisions. It's ok to sell teams, and fans have been saying for years that a sale to a different ownership group would benefit the team. Knowing that fans would be ok with a sale keeping the Thrashers in Atlanta (and implicitly hinting that they know fans feel that the ownership group isn't fully invested in the team), would have not been a big deal.

It's still not a big deal. What the deal is now focuses on the constant denial. This denial of any interest in the sale of the team can be seen as the ownership group trying to make themselves seem more stable than what they were during the lawsuit. The fanbase has a legitimate reason to question the lack of forthrightness with this issue, and has a legitimate reason to be upset that the litigation has kept the team from being sold to someone who could focus more attention on the Thrashers.

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