Yeah, so this is getting good. We have some big news out of Columbus, with an announcement from Mayor Ginther that Columbus Business Partnership CEO Alex Fischer has lined up potential purchasers, AND identified potential downtown stadium locations. And of even more interest, is a request that Precourt Sports Ventures (PSV) and Major League Soccer open their books to those potential buyers.
Let’s pull up the Modell Law one more time:
In my last post regarding the notice issue, I speculated about potential legal strategies that PSV/MLS would use to fight the law. One of those was to argue that the six-month period is about to expire with no prospective buyers, based on a notice date of October 17 or November 15, 2017. If the CBP has prospective buyers lined up and is requesting financial documents, that seems to put that issue to bed, unless PSV/MLS attempt to argue that a deal has to be done within that six month period. That’s going a bit far a-field, and is probably stretching a legal argument further than a court is willing to go. And in any case, that depends on the premise that PSV/MLS are simply dead-set on bailing on Columbus.
So, will these prospective buyers get their hands on the PSV/MLS books? If Garber is being truthful and wants to keep the team in Columbus, then they might acquiesce to that request. But given how secretive MLS is with disclosing that type of information, this would be subject to a pretty strict confidentiality agreement, so don’t count on ever seeing this, unless things get nasty and someone leaks it. For the record, I continue to believe that any offer has to be for the full value of the team; I think it’s ludicrous to believe that Anthony Precourt will be involved with the Crew in Columbus as an investor going forward. It’s going to take a hell of a lot to convince me otherwise (comment away).
With that in mind, if PSV (and MLS) are dead set on moving the Crew, they’ll fight this tooth and nail. They may fight it either way, as with any negotiation over purchase price, the parties are going to try to get the best deal possible. To that end, there is also the issue of the parties valuing the team differently. Expansion teams are paying $150 million to come into the league, with further investments of around $200 million for stadium and other infrastructure. While Precourt paid $68 million to buy the Crew, there is (my opinion) just no way he’s going to agree to a sale price anywhere close to that. But if the “business metrics” are as bad as he says, then how is PSV/MLS going to justify a sale price north of $100 million? And this ignores the issue of the validity of the Moddell law in the first place, which PSV/MLS have already said they are likely to contest (stay tuned on April 19).
So now, the second half of Section B of the Modell law is about to get a real workout. April 19 approaches.