Q: On Phoenix, what did you tell them (the Board of Governors)?
A: I gave them an update as to where the process stood. There seemed to be a lot of confusion. Some of your colleagues have been calling some of the clubs and asking them how they feel about the assessments. There are no assessments. We don't believe that ultimately it's going to have cost us anything to have bought the club and resold it.
They understand the process that we're going through from the sale standpoint. We talked a little bit about the letter of intent with the Ice Edge group. I think there is a better understanding. Tomorrow, we're actually going to take them through the club's operation and how we're operating it, losing less than it did last year, what the sale process will look like, and a little bit of a refresher on what happened in the bankruptcy court.
There was a general overview. I gave more of an overview touching all the issues, and on some of the issues, Phoenix being one, we'll do a deeper dive, but on the relevant issues, I raised them tonight and discussed them with the Board.
Q: Some governors were wondering about the financial viability of the Ice Edge group.
A: I spoke about it and they now have a better understanding of their economics. There are still things that have to be worked out. There are additional people that are in the group that the Board wasn't aware of. I had heard some of those questions but some of that came because we hadn't yet, between Friday night and today, hadn't had an opportunity to fully brief the Board, but they now have a better understanding as to what constitutes that group.
Q: I know that your due diligence happens on every sale?
A: Not yet.
Q: But not on this one yet. When it does occur, this is a franchise that there could be a lot of money needed to keep this thing going for the first few years. Can you say that it's even more important to be right on these guys than at any other time? That this is a real important bit of due diligence coming up?
A: We view all the due diligence to be important, but the due diligence is twofold. One is the economic structure of the deal and the capitalization of the club moving forward. And the other is the people. We will obviously want to be certain that this club either is or will be properly capitalized moving forward, but that's not unlike what we would do with any club.
Q: As far as Ice Edge goes, you just mentioned about capitalization. Are you satisfied that these guys are going to be able to handle the operating costs, starting from when they take over the team, in future years?
A: When we get done with the process, our expectation is that we will be.
Q: Are you satisfied that these guys have assets to pay for this as opposed to just borrowed money?
A: They or the people that they'll be involved in will have to be able to satisfy us with respect to the structure of the deal. That's why we're at the Letter of Intent stage and we have to get to the contractual stage. These are all fair issues and they'll all be addressed. Although, it's more than the four Ice Edge guys that are involved in this.
Q: What about the idea that they'd like to play some games in Saskatoon, which they were all on the record as saying over the weekend?
A: That's something that will require further discussion and ultimately, as with the entire transaction, that's something that the board will ultimately have to approve.