View Full Version : YankeesNets breakup; Wang withdraws; consummation expected soon.

12-09-2003, 11:21 AM
Outline Approved for Sale of Nets

Published: December 9, 2003

The YankeeNets board unanimously approved a breakup plan yesterday to undo the teams' 1999 merger and put the Nets' owners in charge of selling the team.

YankeeNets intended to be a modern sports conglomerate and, despite creating substantial value with the YES Network, the marriage was a fractious union; the owners of the Nets and the Yankees feuded. The company also unsuccessfully pursued a plan to build an arena in Newark.

The divorce, which will involve a stock swap between the ownership groups, was put in motion by the board at the Regency Hotel with George Steinbrenner, the Yankees' principal owner, peppering his staff and lawyers with questions by telephone.

According to two participants in the meeting, the gathering was civil, and there was a long-awaited consensus by Nets owners that it was time for them to sell. Also, some board members expressed regret that the merger was short-lived and beset by differences of opinion about Nets' losses and other subjects.

The agreement is an outline to complete the corporate separation.

"This has been a very successful partnership," said Joe Ravitch, a managing director of Goldman Sachs, one of two investment banks, with Lehman Brothers, hired to handle the Nets' sale. "Now there's a road map to liquidity."

The board talked briefly about the three offers for the team: $257.5 million from Stuart Feldman, a venture capitalist; $267.5 million from Charles Kushner and Senator Jon S. Corzine of New Jersey; and $275 million from Bruce Ratner.

Kushner, a real estate developer based in Florham Park, N.J., said that his intention is to keep the team in New Jersey. Ratner would move the team to his downtown Brooklyn development, and Feldman has indicated an interest in Newark.

"The Nets have been a great team," Kushner, 49, a Nets season ticket holder, said by telephone yesterday. "It's a team that the state takes great pride in carrying the New Jersey name. It should remain in New Jersey."

Kushner's decision to speak comes two days before Ratner is to unveil a master plan for his project, including an arena, at Brooklyn Borough Hall, with his architect, Frank Gehry, designer of the Guggenheim Bilbao in Spain.

Kuchner said he would not want to buy the money-losing Nets if he were not confident that he could reverse the team's money-losing circumstances.

"There's no question that their current situation is a bad one," he said. "It's my intent to buy the team and create a new financial picture."

He has been talking to the New Jersey Sports and Exposition Authority about a plan to renovate Continental Arena, and the benefits of the planned $1.3-billion Xanadu retail, commercial and entertainment complex at the Meadowlands.

He said: "With the arena being incorporated into Xanadu, with a new and improved arena, with a rail link, and with a quality team and quality management, it will be destination not only for a sports event, but for people to have an evening of entertainment. Those are a lot of positives."

The proposed renovation of the arena, which would cost up to $150 million, would be repaid to the sports authority though the increased revenues from adding 30 luxury suites and 1,900 premium club seats.

"They've proposed investing in the arena through a loan that would be paid back," Kushner said "We're negotiating the overall financing arrangement."

George Zoffinger, the president of the sports authority, said the new luxury boxes and club seats would generate an estimated $24 million in new revenues. "I've said they could repay it over 15 or 20 years, but it could be longer," he said. "This is a good deal, as long as they believe they can sell the suites and club seats."

Zoffinger said he had given Kushner his best offer. "They may think we're still negotiating, but they won't wear me down," he said.

Kushner also said that he was assessing the sports authority's architectural plan for a renovated arena. "We want to determine if, in fact, the dollar amounts to be spent would be adequate to having a great arena," he said.

Kushner said he was not completely tied to keeping the Nets in the Meadowlands, but said it was a more doable location than Newark. "I'm open-minded," he said. "I want to follow the path that is more realistic."

Kushner said he was being patient with the sale, which could take at least several more weeks. But the pace became too frustrating for Charles B. Wang, the co-owner of the Islanders, who withdrew his $265-million bid last week.

"All the prospective purchasers feel some frustration that that process hasn't been clearly defined," Kushner said. "But on the other hand, we have to be patient. It's a complicated group of sellers, a lot of whom have divergent interests. That creates complications."

Kushner said he had been assured that the Nets' owners would sell. "I've received a lot of assurances that they do want to sell, but it's very hard to know what's in the seller's mind," he said. "The sellers have diverse interests: maximizing value, having a charitable purpose, moving to another state."

One step taken yesterday to simplify the sale was the hiring of Edwin H. Stier, a former federal prosecutor in New Jersey, to be the voice of Nets ownership in the sale.

"I fully expect the Nets' sale process will be quickly consummated," Ravitch said.

12-11-2003, 09:33 AM
Someday, Knicks May Have Nets as Neighbors

Published: December 11, 2003

ONE day, in about four years, James L. Dolan may be stirred from his narcoleptic leadership as Knicks chairman by a hired jostler on retainer at Madison Square Garden.

"Excuse me, sir," General Manager Scott Layden may gently say to Dolan. "Sir, the Nets are at the door."

Over the last couple of years, Dolan could dismiss the idea of a Nets threat to the Knicks' metropolitan domain as the Nets won games in a dank arena fit for vampires, "Hollywood Squares" stars and turnpike enthusiasts.

He could watch out of the corner of his eye as the Eastern Conference champions failed to draw city fans as a result of repetitive traffic stress or Lincoln Carpal Tunnel Syndrome. He could assess the Nets' reach into the metro area as limited, given the distance in miles and the mystique between the Garden and the Swamp.

As of yesterday, the gap closed, at least as a concept in cardboard. Unveiling his basketball fantasy at Brooklyn's Borough Hall, Bruce Ratner hyperdeveloper and charismatic bidder for the Nets offered his vision of a future when the Nets would play in an urban arena on Flatbush Avenue, in a cozy building surrounded by affordable housing, near multiple rail lines, with tickets that are affordable to the average fan.

To give his dream tangibility, there was an elaborate mockup of the site made of paper and plastic, with building blocks from a toy chest to simulate skyscrapers and scaled-down fans the size of picture hooks glued to the landscape.

To give his hope hip appeal, the bespectacled Ratner stood as square as a Chiclet when he introduced a new investor to his group: the rap artist Jay-Z. Given Jay-Z's Brooklyn roots, his mainstream appeal and his built-in attraction as a free-agent lure, he is a brilliant addition.

"I believe there is a real passion for basketball in Brooklyn," Jay-Z said. "I believe with the kind of passion we have, an arena here could rival the Garden."

If Ratner takes a quality Nets team to Brooklyn within four years, he would help reinvent the image of the franchise, taking it from a suburban lounge act to an urban group with edge. If the Knicks continue to top uninspired moves with mediocre ones, the Garden could morph into a graveyard where cool died years ago.

The potential for this role reversal should unnerve Dolan, not that anyone would be sympathetic.

"Who cares," said Marty Markowitz, the Brooklyn borough president, before adding that the Dolans would have to "deal with it" if the Nets moved into their backyard.

Reflective of Dolan's cable-guy tendencies, Garden officials are hard to pin down on specifics between the hours of 10 a.m. and 6 p.m. Their answers on the Nets' possible relocation to their 'hood are broad and vague. On Tuesday, Garden executives declined to comment except to reiterate their confidence in the Knicks' brand identity.

Haven't the Garden suits noticed? Brands are so yesterday. The hottest jerseys in the league are worn by a Cleveland Cavalier rookie (LeBron James) and a Denver Nugget phenom (Carmelo Anthony).

If the Knicks need more proof of how shaky their identity could become if pitted against the Nets next door, they can examine the article in The New York Times yesterday that detailed how consumers are less likely to select gifts based on brand names than they were three years ago.

Already, there are signs of the Knicks' market complacency. Almost every night, Marv Albert is turned into a carnival barker on MSG Network broadcasts, enthusiastically pitching ticket packages to fans who have abandoned what Michael Jordan once called basketball's Mecca.

The Garden is not a must-see anymore, not at the inflated ticket prices, not with a deflated product on the floor. How long before the Knicks realize their glory days are over?

Even delusions of grandeur can have an expiration date. In four years, the Nets could force Dolan into a reality check. So, there is time for the Knicks to do what they loathe (to rebuild) or make the bold moves they must (to revamp). So, there is a window for the Knicks to restore their credibility as The Team in town before the Nets swipe their turf. So, there is time for the Knicks to make themselves a worthy rival for the Nets should they cross the border.

If the Knicks can compete with the Nets, if the Nets can maintain their run on success, Ratner's vision will be even grander than his cardboard design. Imagine what a subway would do for a Knicks-Nets series that meant something.

"It would be exciting for everyone, and I think there is room for two great clubs," said Bernard King, a Brooklyn-born icon who played for the Knicks and the Nets. "There is certainly room in a borough like Brooklyn and a city like New York to accommodate two great franchises."

First things first, though. Someone has to tell Dolan that his team would not be one of those elite right now. That's Layden's job.

12-11-2003, 09:59 AM
George Steinbrenner is a tool. Since he is involved, I thought I'd toss that out there.