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With Thrashers gone, Spirit reportedly turns attention to sell most of Hawks

With the Thrashers dispatched to Winnipeg, the Atlanta Spirit is reportedly in intense negotiations to sell all but a "substantial" minority share of the Hawks to a mystery investor.
With the Thrashers dispatched to Winnipeg, the Atlanta Spirit is reportedly in intense negotiations to sell all but a "substantial" minority share of the Hawks to a mystery investor.
(Getty Images/Kevin C. Cox)

First the Atlanta Thrashers left town. Now the same may be said for at least some of that dysfunctional group known as the Atlanta Spirit.

The AJC reported on Wednesday afternoon that the Spirit was hot and heavy in negotiations to sell a majority interest in the Atlanta Hawks along with the operating rights to Philips Arena to an unnamed potential bidder according to an unnamed source.

Of course, the source refused to divulge the name of the bidder because of “confidentiality agreements.” However, they described the process to the newspaper’s Chris Vivlamore and Tim Tucker as “moving fast” and claimed that the guy looking to buy the Hawks and the operating rights to Philips Arena purportedly has the financial wherewithal to pull off the deal.

The intriguing part of the report states that certain members of the Spirit (a/k/a the least honest ownership group in North American professional sports*) would retain a “significant” minority stake in the Hawks. As those who have followed the Thrashers saga know all too well – Spirit partner Michael Gearon has stated his desire to retain his complete entire stake in the Hawks.

Atlanta’s newspaper of record’s source claimed that the newest potential buyer for the Hawks had “accountants and lawyers working extensively” on due diligence. The next step would be for the potential buyer to make an offer. If the Spirit likes the number some earnest money (akin to a deposit) may be plunked down and the parties would enter into an exclusive negotiating period.

San Diego Padres owner John Moores was granted an exclusive negotiating window to purchase the Hawks and Philips Arena operating rights from the Spirit during the same time frame that the Spirit was in negotiations to sell the Thrashers to a group in Winnipeg.

While that exclusive negotiating period with Moores was terminated in the final days prior to the sale of the Thrashers to Winnipeg’s True North Sports and Entertainment, Ltd., sources told when the agreement expired back in May that Moores’ exclusive window may have began as early as February.

If true, that would have the effect of freezing out a bidder for all three entities during the most critical part of the negotiating process while the hockey team slipped away to Winnipeg.

Although the Spirit claims that they had no legitimate buyer for the Thrashers, others claimed that they had interest in purchasing the Hawks, Thrashers and operating rights to Philips Arena in a combo deal – a claim the Spirit vehemently denies.

During the sales process, at least four groups claimed to at least kick the tires on a purchase of all three entities from the Spirit. For whatever reason, those parties and the Spirit could never agree on a sales price.

Of course, the Spirit’s owners contend that there was never anyone with adequate resources that could pull together a deal to buy the city’s hockey and basketball teams.

On the day the Thrashers sale to Winnipeg was finalized, a defiant Gearon claimed that some of those who expressed interest in purchasing all three entities “could not afford season tickets.” He also singled out venture capitalist J.B. Smith, suggesting that reporters “Google J.B. Smith” and that the businessman known as “the Balkan,” was “wanted for fraud.”

Smith was not the only one who reportedly made to make a big-money bid on the Hawks/Thrashers combo.

A published report out of Canada had former NHL player Anson Carter making run for the teams. Atlanta-native and Hollywood producer Stephen Rollins also assembled a group to put in a bid and a group of minority investors lead by former NBA player Bernard Woodside also made a bid for Atlanta’s hockey and basketball teams.

The AJC’s source claims that this new potential owner of the Hawks had no interest in purchasing Atlanta’s now-departed hockey team, seemingly eliminating those four groups from contention to purchase a majority stake in Atlanta’s basketball team.

A sale of the Hawks during the NBA lockout would be a bit of a head scratcher. Conventional wisdom suggests that the value of Atlanta’s basketball team should increase if the owners get labor costs under control.

The Spirit denied a report last month that stated that the sale of the Hawks was “imminent.”

If the Hawks are sold, it is very unlikely that they will bolt town like the Thrashers. In order for that to happen, the new Hawks owners would have to pay off the remaining $120 million-or-so principal on the Philips Arena bonds, fork over a $75 million penalty in addition to paying a substantial purchase price. The new owners would also have to get NBA approval for any relocation.

For updates whenever a new article is posted, please follow me either on Twitter @PJFoleyExaminer or Google Buzz.


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