Report: Blues Reject $167 Million Offer | Should the NHL Get Involved?

By Jeff Quirin
NHLHS St. Louis Blues Correspondent

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Calgary Businessman Max Chambers may be the newest character to appear in the saga that is the sale of the St. Louis Blues, but that won’t stop him from delivering a plot twist. As reported by the St. Louis Post Dispatch Wednesday afternoon, his $167 million offer to purchase the franchise was rejected.

The dismissal of the proposal submitted on July 2nd should not be a surprise. The other known bids, one from current minority owner Tom Stillman and the second from Chicago Businessman Matthew Hulsizer, have met the same fate for the same reason. They fell short of the amount principal owner Dave Checketts and majority investor TowerBrook Captital Partners is asking for. Speculation has placed the number between $180 million and $200 million (and possibly more).

Such speculation may be ended by information Chambers relayed to Post beat writer Jeremy Rutherford.

“The offer of $167 (million) was my maximum,” Chambers said. “We think that’s the most they’ve been offered. Obviously they haven’t been offered $190 because $190 was the figure to take it off the auction block. I don’t think anyone has over-topped our offer of $167.

“I think $190 is a little aggressive with the value of the franchise. We felt $167 was aggressive, so their counter at $190 was real aggressive in our view.”

If Chambers is to be believed the Blues, Peoria Rivermen (AHL affiliate) and the Scottrade Center lease can be had for $190 million. Just $40 million more than his company, SportsCapital Partners, and TowerBrook paid in 2006. Only $25 million more than the Forbes 2010 valuation of $165 million.

Clearly, the upside of the young player personnel like Jaroslav Halak, Chris Stewart, David Backes and Alex Pietrangelo has a tangible value and it’s roughly $25 million. Obviously, those interested in buying haven’t been sold on that fact as Stillman’s offer was less than the the debt value and the $160-$170 range Hulsizer was reportedly seeking.

(Doug Armstrong doesn’t pay for potential, why should we?!)

In the two months or so since the rejection much may have changed, but it according to what Chambers told Rutherford that seems unlikely.

“I don’t know what state the process is in right now. Does anyone?” Chambers said. “I mean, I can’t get an answer from Game Plan what the number is. What is the real number? You guys are throwing $190 out. You got $167 from us and I think the next bid is what … $120-130?”

Game Plan that he refers to is Game Plan LLC. The company retained by Checketts and TowerBrook whose Chairman, Robert Caporale, has iterated during the off season that a sale was possible by the start of the NHL season. For the Blues that’s October 8th. Mere days, not weeks or months away. At this point that date might as well be any of the several soft deadlines provided which passed with no resolution. Just more dates to circle on the calendar to get new dates to do the same.

The cycle of insanity raises serious question. Ones that do not have answers currently.

Why is it so hard to find a business history on Chambers?
Was the offer rejected because of fears the NHL wouldn’t approve Chambers offer?
If the offer is legit, how long will the NHL allow fair market value offers to be refused?

Well, there is someone who can get answers and probably should.

Gary Bettman doesn’t need another franchise on queasy ground degrading further. Between Phoenix, Columbus, Long Island, Dallas and once considered stable franchises like New Jersey and Ottawa who are now in trouble financially, the league has enough to deal with. Proactive measures may be required to goose the powers that be in to action that benefits all involved parties rather than trying to cash in a big personal payday by holding a franchise for ransom.

Big brother’s involvement will surely spook some in to fantastical ghost stories of slippery slope relocation scenarios sending the Blues to Saskatoon, Kansas City, Houston, Seattle, Quebec City or even Europe. As Chambers correctly asserted to Rutherford, the Blues are not moving, for now.

Chambers said that Blues fans should have no concerns about moving the team.

“St. Louis is not a franchise that is movable,” he said. “There are other franchises in the league that need to be fixed before St. Louis is moved.”

The quote only holds true as long as the fan base continues to see a light at the end of the tunnel. Confidence in key players developing quickly and that the current ownership makes a swift exit. The longer the team operates without a long term owner the lower the confidence level will sink. The lower it goes the easier it will be for fans to reduce their monetary investments and corporate sponsorships to dry up. Setting the franchise back six years. A little extra effort from the league today may save an over 40-year old hockey market heartache tomorrow.