DALLAS - In another sign of the deepening distress of professional sports teams, Dallas Stars' owner Tom Hicks is trying to fend off creditors in hopes of getting through the season without surrendering control of the National Hockey League Team.
Hicks, whose Hicks Sports Group owns the Stars and Major League Baseball's Texas Rangers, has a 50% stake in Center Operating Co., the group that manages and leases the American Airlines Center where the Stars and the Dallas Mavericks of the National Basketball Association play their home games.
While Hicks Sports Group is in default on $525 million of loans, the $240 million AA Center financed in part through $105 million of special tax-backed bonds from the city of Dallas is not considered vulnerable to financial trouble. The bonds for the arena are rated A by Standard & Poor's and A-plus by Fitch Ratings.
Hicks' situation is less dire than that of the bankrupt Phoenix Coyotes, whose sale to a Canadian owner would have led to relocating the team from their bond-financed Glendale, Ariz., arena. A U.S. Bankruptcy Court judge ruled in June that the Coyotes must stay another year while the bankruptcy case is resolved.
In Glendale, the Coyotes are the only team playing at the jobing.com Arena, which was financed with $155 million of tax-supported bonds in 2003. In Dallas, the AA Center also hosts the Mavericks, whose NBA league is also ailing financially.
To ease the financial crisis, Hicks is looking to sell the Texas Rangers, which he bought from former President George W. Bush. Hicks and Bush are now Dallas neighbors and politically close.
The National Hockey League and Hicks' lenders have an agreement that says if a default occurs six months before the start of the NHL season, lenders must wait the length of that season plus 60 days before attempting takeover.
The season starts Oct. 1, and the Stars open on Oct. 3. By the Hicks Sports Group's reckoning, that should give them until August 2010 to settle the loans while receiving protection from the NHL, according to news reports.
Hicks hired J.P. Morgan Securities Inc. to try to sell the Stars in 2002 but found no adequate offers. The Hicks Sports Group problems coincide with the opening of the new $1 billion Dallas Cowboys Stadium in the suburb of Arlington. Hicks Holdings is a partner with Hillwood Development Co. in Glorypark, a 75-acre urban town center development adjacent to Cowboys Stadium and Rangers Ballpark in Arlington. That project was put on indefinite hold in March.
The city of Arlington contributed $320 million of tax-supported bond debt toward the stadium's construction in 2005 and another $34 million of general obligation bonds for related roads and infrastructure in 2008. The stadium bonds are rated A by Standard & Poor's, A2 by Moody's Investors Service, and A by Fitch.
While the Glorypark project is on indefinite hold, Victory Park, a major development surrounding the AA Center in downtown Dallas, has been completed by Hicks Holdings and Hillwood. However, the recession and a glut of housing and office space in the market has reduced demand. Victory Park includes a high-rise W Hotel, along with office towers, condominiums, and restaurants.