NASHVILLE, Tenn. - A local investor group trying to buy the Nashville Predators reached an agreement with city officials on changes to the arena lease.
In the deal announced Friday afternoon, Mayor Karl Dean said the team would be required to stay in Nashville for five years or it would have to pay back the city its investment in the operations of the Sommet Center.
"Nashville is guaranteed to have hockey for the next five years and if that commitment cannot be met the city's investment will be paid back," Dean said. "Most importantly, no additional property tax money will be used to pay for the operation of the Sommet Center."
The agreement must still must be approved by the Metro Sports Authority and city council. The proposed US$193-million purchase of the team must be approved by the NHL's Board of Governors.
The group came together to make an offer to owner Craig Leipold after he originally announced a deal to sell his team in May to Canadian billionaire Jim Balsillie for $220 million. But the deal fell through in June when the co-CEO of Blackberry makers Research in Motion Ltd. started taking season-ticket deposits in Hamilton, Ontario.
Leipold has said he has lost $70 million since starting the team, and the latest potential buyers were seeking lease conditions that would give them a better chance of turning a profit.
"Our group wishes to thank the fans for their continued support, patience and enthusiasm for Predators hockey," said David Freeman, a member of the investors group.
Seven of its nine members are from Nashville. The others, businessman Doug Bergeron and venture capitalist William "Boots" Del Biaggio, are from California.
According to a copy of the agreement provided by the mayor's office, the city will pay Powers Management, the team's management firm that operates the city-owned area, between $2 and $4 million a year. The team will also see its annual rent lowered by $750,000.
The team will be allowed to terminate the lease before 2012 if its losses in the next three years exceed $20 million and the average paid attendance falls below 14,000.
Average ticket prices must be set lower than the league's average.
If the team wanted to terminate the lease in 2011, it would have to pay the city $20 million. In 2012, $25 million. Any time after five years it would have to pay $10 million.
The investor group planned an announcement earlier this week amid reports that it had reached a deal after several weeks of negotiation. But it was cancelled at the last minute when city officials said it was not final.