On July 29, 2008, we knew the Dave Checketts-led Blues ownership group was in trouble. On that date, a company you've probably never heard of issued a press release you probably never saw about something as innocuous as Levy Restaurants becoming the "official restaurant partner of the St. Louis Blues." Shortly after that, we were told by a source close to the club that there was information left out of that release (cached here because the web page is no longer active). Allegedly, that partnership was actually a sale of the team's concession rights for an upfront payment of $10 million to cover a balloon payment from the 2006 purchase of the team. After owning the building and franchise for two full seasons, we were told the Blues ownership group did not have the cash flow to meet the demands of owning the team. You won't find that rumor anywhere else on the Internet which actually lends it credibility.
Many of the events surrounding this team have followed suit. Inactive summers in free agency, hiring a young and unproven AHL head coach, trading away Eric Brewer and Brad Boyes for a concussion-hampered prospect and two draft picks and the simple fact that the Blues are less than $1 million above the salary floor have all been indications the team did not have the money to operate. But there have been other indications.
If you are a season ticket holder, there is little to no chance you've had the same sales representative with the team for very long. Expectations are high, repeated sales calls are as well. You might remember that Peter McLoughlin re-signed as CEO of St. Louis Blues Enterprises in September. He left what everyone thought was a promising team in the NHL for the Seahawks of the NFL. You know, the football league that was headed for a lockout a year ago that happened last week. And instead of replacing McLoughlin, they moved into the role Mike McCarthy, a partner in SCP Worldwide - the official name of Checketts' group. In other words, instead of another high priced executive salary, they moved another guy over.
The issue comes down to the amount of money Checketts had in the club versus how much other people's money went into buying the team from Bill Laurie in 2006. Checketts has the controlling interest in the club despite only owning an approximate 20 percent of the team. Towerbrook Capital Partners owns about 70 percent of the team. Local Miller beer man Tom Stillman owns another percentage as the minority owner (we assume it's 10 percent, but we don't know for sure). When Towerbrook announced in May that it wanted out by Dec. 31, it was going to be difficult to find a money person who would still give control of the team despite giving all the money. When a second deadline passed at the NHL All Star break, the situation looked dire for Checketts. Fox Sports Midwest showed a graphic Wednesday saying Towerbrook's investment was estimated at $120 million.
"It's really the reality of the situation. I couldn't make a deal with our current partners, Towerbrook partners. We couldn't make a deal between the new and old investors. Then we decided to let this end in a good way and put the club up for sale," Checketts told John Kelly and Darren Pang on the Blues broadcast Wednesday night. "It's not what I want to do, not what I'd like to do. I wanted to own the Blues for a long time to come and it just was not to be."
What that means is that Checketts could not find a willing investor who didn't want control. A story surfaced the first week of March that Stillman had lined up investors to buy the entire team, but his offer was turned down. On a conference call with reporters today, Checketts said he had received no credible offers for the team. Either Checketts believes Stillman was low-balling with his insider information or he didn't like the terms or maybe he didn't like the person making the offer.
Checketts has brought the team back from the edge. Before Laurie sold this team, he had it stripped of assets and seemingly tried to kill fan interest. Sponsors were running away, the arena was more than half empty, the team had its worst finish in franchise history. Checketts says the season ticket base is back over 11,000 for an arena with a capacity of just more than 19,000 seats. He says sponsorships are up four times compared to when he bought the team. There are promising players, lots of draft picks and high hopes for better days ahead.
But the hallmark of the Checketts Era will always be just not quite enough. Not quite enough goals, wins, fans for true sellouts, free agent signings and playoff appearances. He got this team to the other edge but didn't have enough juice to make it over the hill. We have no ill will. We have no fear this team is in danger of moving (Gary Bettman won't let Phoenix move, for Pete's sake). It all comes down to cash flow. Checketts never had it. Hopefully a new owner will.