WSJ Says Tom Hicks "Could Eventually" Lose Control of Texas Rangers, Dallas Stars
Creditors to Texas financier Tom Hicks's Hicks Sports Group have declared the company in default, a measure that could eventually dislodge the Texas Rangers baseball club and Dallas Stars hockey franchise from his control.To which The New York Times adds, for those without Journal access: "The Rangers baseball team and the Stars hockey team are now unable to pay both their operating expenses and their debt service, the newspaper said."
Update: Here's the whole WSJ piece, for the time being, in which Hicks more or less reiterates his official position from April 3, when word first broke that he'd defaulted on $10 million in interest payments on $525 million in loans as he tries to restructure a new deal with his lenders and find partners for the Rangers and Stars. But it does add a few details, which you will find after the jump.
Update at 1:43 p.m.: As predicted, here's Tom Hicks's official statement concerning this morning's WSJ story:
"You may have read yet another news story about the current situation involving HSG's efforts to renegotiate their loans. This time the story appeared in the Wall Street Journal. There is nothing new in this story. As has been previously reported, HSG missed its most recent quarterly interest payment. As a result of that payment default, HSG's lenders have now sent the expected and normal default notices to HSG. But nothing has changed at the baseball and hockey clubs while the negotiations continue at the HSG level. Both Major League Baseball and the National Hockey League have strong protections for their franchises when discussions such as these are underway. These are complex negotiations and there are some very smart people working on them. As an owner and lender to HSG, I am working to negotiate something that will make economic sense going forward for me, HSG and its lenders. The current situation simply does not make economic sense. As these negotiations progress I will keep you posted."
Mr. Hicks has declined to continue making up the difference out of his own pocket, according to a person familiar with the matter.
That has angered some of the lenders -- a collection of large banks and smaller investment funds -- for whom the default notice begins a process that could put the banks in control of the teams. That won't happen for at least 180 days, however, as lenders have agreed to National Hockey League provisions that prevent immediate foreclosure. Major League Baseball's rules for such situations are more fluid, though if Hicks Sports Group can't satisfy lenders, the lenders can eventually force an MLB-sanctioned sale of the Rangers. ...
"I'm confident that I'll be able to reach agreement with 51% of the lenders because I will be able to fund all the cash needs of the two teams during the period that I'm bringing in new partners, which will help us to drastically reduce if not eliminate HSG's debt," Mr. Hicks said in an interview.