Tom Hicks claims this won’t won’t affect the teams. From AP-
The company that owns baseball’s Texas Rangers and hockey’s Dallas Stars has defaulted on about $525 million in loans, with owner Tom Hicks saying on Friday that he intentionally made the move to help negotiate with banks.
Hicks told The Associated Press the teams won’t be affected after Hicks Sports Group, his holding company, didn’t make an interest payment on the syndicated bank loans Tuesday. A syndicated bank loan is one made by a group of lenders to one borrower.
“What we want is the banks to allow us to use our interest revenue,” Hicks said. “We need 51 percent approval, which we anticipate. It is hard to get two banks to agree to anything, much less 40 on a timely basis.”
A financial news Web site called FINalternatives first reported Friday that Hicks Sports Group did not make its interest payment on a $350 million bank-term loan, $100 million second-lien loan and a $75 million revolving credit facility.
“Like so many other companies and institutions, HSG has been impacted by a global credit crisis which no one could have anticipated,” Hicks said in a statement. “The company is not asking for additional money; it is only asking for full access to the interest reserve account and revolving credit line as well as some amendments in the debt covenants.”
He said that the negotiations have nothing to with his other assets or his family’s assets.
“This will be a nonevent to players, to the fans, our sponsors, our vendors, anybody,” Hicks said.
Hicks admits he is seeking minority owners for the franchises. I don’t see how these financial problems CAN’T affect the teams Hicks owns. In a few months it will be the time of year when NHL teams sign free agents or try to retain those players they have now. If these teams are unable to pay for a loan, how will they be able to compete in the player market?
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