View Full Version : Other Sports Boots Del Biaggio is a class act

07-13-2008, 05:29 PM
Err....not quite.

Boots has filed for bankruptcy, has several pending lawsuits against him for fraud, is being investigated by the FBI, and has now been exposed for attempting to screw over the Nashville Predators, a team he partially owns.

Sounds like a guy I want owning a KC pro franchise! LMAO


Del Biaggio planned to seize, move team

Local owner says contract protected Preds

By BRAD SCHRADE Staff Writer July 13, 2008


As Metro officials considered whether to give millions of additional tax dollars to the Nashville (http://www.tennessean.com/apps/pbcs.dll/article?AID=/20080713/NEWS0202/807130395#) Predators' new owners earlier this year, at least one part-owner was already selling the idea that the team would fail here and could be moved to another city.

William J. "Boots" Del Biaggio III, a California businessman who has filed for bankruptcy and has been accused of fraud (http://www.tennessean.com/apps/pbcs.dll/article?AID=/20080713/NEWS0202/807130395#) by several lenders, was signaling to potential investors that the team had "portability value," according to a confidential document obtained by The Tennessean.

Del Biaggio claimed that his group, which owns almost a one-third stake in the National Hockey League's decade-old Nashville franchise, was well positioned to take control of the team if the Predators' new local owners couldn't make it work here.

Many Predators fans thought the team's purchase by mostly local owners late last year meant the Preds would stay in Nashville particularly after generous concessions by the city this year to help the team try to reach profitability. The team is eligible to receive millions of dollars in annual taxpayer support, agreed upon by Mayor Karl Dean and approved in April by the Metro Council.

The team's lead owner and managing partner, David Freeman, said the team is not at risk. He pledged to Dean and the Metro Sports Authority late last week that the Predators would remain in Nashville.
Meanwhile, Del Biaggio's financial and legal problems including several lawsuits filed against him, and an apparent investigation by the FBI could leave creditors out millions of dollars.

'Distrust of his motives'

The bleak future predicted for pro hockey in Nashville was part of a marketing (http://www.tennessean.com/apps/pbcs.dll/article?AID=/20080713/NEWS0202/807130395#) effort by Del Biaggio's hockey-related firm, Forecheck Holdings, to gain more investors.

A computerized presentation, dated January 2008, featured charts and slides with titles such as "Portability Value" and "Investment Thesis." The document is labeled "strictly confidential" and targeted toward a "limited number of sophisticated prospective investors."

Freeman told The Tennessean last week that he was aware Del Biaggio had been trying to get additional investors into the hockey enterprise, but was not aware that Del Biaggio had told potential investors that they could gain control of the team and move it.

That assertion, and several others in the slide show, are "false and misleading," Freeman has told the mayor.

"Forecheck never cared about Nashville," Freeman said when The Tennessean showed him a printout of the slide show last week.

"If you remember, Boots talked quite openly last summer about moving the franchise to Kansas City if he was the winning bidder. He lost. As we negotiated our partnership agreement with Forecheck, we did so with respectful distrust of his motives. It's why we put so many protections into (the team's) partnership agreement."

Del Biaggio, a San Jose-based venture capitalist and hockey fan, had dabbled with NHL ownership over the past several years, once owning part of the San Jose Sharks and being discussed as possible buyer for the Predators and other franchises. He did not return a message left on his cell-phone voice mail, and he could not be reached through other means for comment for this story. His lawyer said he would decline to be interviewed.

"I think it's really important that we make this work. If this doesn't work financially, then the NHL and the ownership group will have to look at every option available," Del Biaggio was quoted in The Tennessean last October, when the new owners' bid to buy the team was pending.

Court records allege he borrowed millions of dollars from several major lenders using as collateral securities that belonged to someone else. A handful of lenders have sued Del Biaggio, who has filed papers in Bankruptcy Court saying he owes many millions more than he has in assets.

Meanwhile, federal agents have issued subpoenas to Metro officials for their records pertaining to Del Biaggio's role in the Predators' purchase.

'Nashville's last chance'

The PowerPoint presentation plainly spells out Fore check's investment thesis: Del Biaggio's group could invest in the team with little risk.

At the same time, it says that the internal operating agreement Del Biaggio had with the other Predators owners would allow him to gain majority control of the team and move it under various scenarios.

In the event the team were to succeed here, Del Biaggio and his investors could remain in the minority, or have the right to cash out and make a play for another NHL franchise if an opportunity arose elsewhere.

But Forecheck projected the Preds would not become financially viable former owner Craig Leipold has said he lost $70 million on the team over 10 years in which case, the Del Biaggio-led investors could gain majority control, serving their agenda to buy a hockey team and locate it elsewhere, while providing cover for Freeman's local ownership group.

The local investors did not want to be the ones to pull the trigger if Nashville's hockey venture had to be put to rest, the presentation said.

In one scenario in the slide show, Forecheck could take control after the 2009-10 season, and possibly begin the process of moving the team. That could come about if the team lost $20 million by then and failed to sell 14,000 tickets per game, according to a slide titled "Portability Value."

"In this scenario, because of the personal guarantees provided by the Nashville group, operational control will likely cede to" Forecheck, the document says. "It will be (Forecheck's) control to move or sell the Team.

" There should be plenty of notice of whether this scenario will occur.

" The Nashville group will not want to be the decision makers if the team needs to be moved.

" The NHL has already indicated that this is Nashville's last chance."

'False and misleading'

Thumbing through a printout of the 16-slide presentation in his office at Sommet Center, Freeman said that he had never seen it and that he was "surprised but not shocked" at its contents. He said it contained falsehoods and inaccuracies, but when asked to point them out, he would not elaborate.

Freeman, who like Del Biaggio is also a venture capitalist outside the hockey world, said he was bound by confidentiality agreements with his fellow owners and the NHL.

He took strong issue with the assertions by Forecheck, which Del Biaggio owns with another California businessman, Warren Woo, that it could gain control of the team and move it, as outlined on the "Portability Value" slide.

"I think that page in particular that's the musings and opinions and what appears to be deceptions of guys who don't share the core fundamental goals that my Nashville partners and I have for this franchise," Freeman said.

The rights and relationships of the various members of the Predators ownership group are spelled out in an unsigned copy of the team's confidential internal operating agreement obtained by The Tennessean.

The agreement, which offers a rare look inside the business arrangements of an NHL team, has never been made public by the team's new ownership group, who closed on the sale late last year. Metro officials said they had never been furnished with a copy of it.

After viewing the document, Freeman said it appeared to be the 35th draft, while the final version signed by the owners was the 43rd. When asked by the newspaper to describe any specific material differences in the two drafts, he declined.

On Thursday, Freeman sent a letter to Dean and Sports Authority Chairman Kevin Lavender, seeking to reassure them that the team isn't going anywhere. He also disavowed knowledge of Del Biaggio's claims.

"I did not approve, and was not aware of, the materials used or the information provided to potential investors, some of which is materially false and misleading," Freeman wrote.

Reassuring the city

Forecheck's assertions that it could gain control and move the team are overstated, Freeman wrote, and the statements "in these materials are at odds with the primary goal of our core ownership group, which is to protect this franchise for the city of Nashville and see it flourish over the next several decades."

"I assure you that control of this franchise resides firmly and exclusively with the Nashville owners," Freeman said in the letter. "Only the most remote scenarios could result in any type of control by Forecheck. That scenario, while theoretically possible, will never happen and is merely a mechanism to ensure the orderly buyout of Forecheck by October 2011."

He said he was aware Forecheck was seeking additional investors, with a goal to bid for an expansion franchise, but was unaware of the false claims it was making.

Through his press secretary, Janel Lacy, Dean declined both Tuesday and Friday of last week to be interviewed for this story.

The attorney who handled the Predators' lease negotiations for the city, Larry Thrailkill, said he reviewed a signed version of the Predators' internal agreement last fall, but had never seen the PowerPoint presentation.

Asked if it would have changed the city's position or the way it renegotiated the lease with the new ownership group, he said: "It would have caused us to ask the local owners about the intentions of one of their partners who apparently had a different view of the likelihood of them being successful than they did."

Thrailkill said adjustments the city made to the lease were intended to offer help to a local ownership group. He said he reviewed the Predators' documents with an eye toward recognizing ways Del Biaggio or Forecheck could gain control of the team. The city inserted provisions into its agreement with the team to try to safeguard Metro in that case.

"At anytime the local owners own less than 50 percent of the vote or equity of the team all those incentives that the city granted for five years (would) go away," Thrailkill said. "The city has the right to jerk all those incentives."

Brad Schrade can be reached at 259-8086 or bschrade@tennessean.com.