Sports department for the student run radio station 90.3 WRST at UW-Oshkosh
Picture yourself being an slightly upper class man with ownship of a small company. You probably own some stocks in some sort of stocks with a decent 401k. Ownership in something major would only be just a dream; however one man managed for several months to make that dream a reality. ESPN Film series 30 for 30 highlighted a well done story yesterday on John Spano’s temporary ownership as done by Brandon Connolly recapping the debacle that occurred in 1997 that changed team ownership across all sports forever.
John Spano was a small business owner from Texas who grew up in the Midwest. He was an avid sports fan that always wanted to strive for something more. He was making efforts to try to somehow, someway be able to gain control of the Dallas Stars. That deal fell through; however, just after his failed attempt the New York Islanders franchise was in a massive amount of disarray with an angry fan base, awful facilities, and an owner in John Pickett who has given up on the team.
Spano didn’t have money, but due to the nature of his business was able to get connections to people in Texas with loads of money and power. He had connections with many powerful bankers including connections in the Cayman Islands, where he frequently vacationed. With these connections he was able to get documents that were said to be worth hundreds of millions of dollars when in it turned out he was only worth about $5 million with $3 in assets with his Bison Group ownership.
You would think that forged documents would be easily spotted by a major corporation, but there was a lack of communication between Pickett and the NHL in the deal. Pickett thought the NHL would do the bulk of the research on Spano and the NHL vice versa and just about no due diligence was accomplished and Spano was cleared to be allowed to work out a deal to buy the Islanders.
With those forged documents, Spano somehow was able to slip through the cracks and swing a deal for $165 million dollars to buy the New York Islanders. Spano obviously didn’t have that kind of money; however, the man was a business genius and was able to work out the perfect set up. He was able to get a Boston bank to loan him $80 million to pay for half the team. That knocked out about half the money he needed in your to buy the team which left $85 million left to gather.
Spano was able to cut the number by 80% because he was clever enough to get Pickett to agree to have the remaining $85 million paid in 5 $17 million installments. When it came time to close the deal, Spano only needed to pay the first of the five payment installments because of the $80 million he was loaned, but couldn’t scrape it up in time.
He said he didn’t have the money and made up excuses as to why and the overseers of the transaction bought it. They believed he had $27 million in treasury notes, much more than the $17 needed for the first payment. He was able to sign the dotted line and become owner of the Islanders. He then proceeded to stall as much time as possible to try to round up the money to pay Pickett. He made up excuses from a London bombing to wiring $1,700 instead of $17 million. After four months of shenanigans, excuses, and destructive activities as the Islanders owner, a Newsday article on July 9th exposed him for the fraud that he was and the game was over.
Spano wound up having to pay back many people that had helped him with the $80 million the Boston bank loaned him and $11.9 to others who had given him money including two Dallas Business men, NHL superstar Mario Lemieux, and $3.4 million to the Islanders itself.
This sticky situation has shaped the way pro sports teams are bought and sold. Much more research and interviewing is done before an owner can sell a franchise to another owner or ownership group. The amount of research that was believed to be done by all parties on Spano was $500-750, which is dwarfed by the research now with the average being right around $30,000.
You also see leagues having more restrictions for a new owner to break through to own a franchise. Mark Cuban has the money to buy a baseball team, however has not been able to pull the strings on a deal to buy ether the Chicago Cubs or the Texas Rangers, mainly due to his outspoken reputation from his ownership with the Dallas Mavericks.
Due to Spano trying to live out his dream, teams are now in better hands than ever. Fans can rest safely knowing that barring catastrophe that their team will not be going bankrupt for a long time. Leagues also have measures to remove owners if a case gets bad where ownership may be in question much like the Frank McCourt situation with the Dodgers a few years back. Even in an ugly meltdown, there was light at the end of the tunnel.
Wide World of Sports
Josh Freeman is unlikely to play against the Packers Sunday night. He reported to practice today with concussion-like symptoms and would give the starting back to the Vikings 2011 first round pick Christian Ponder. Freeman had a Monday Night Football performance to forget against the New York Giants threw a poultry 20-53 for 190 yards with an interception and no touchdowns and leading the offense to zero points against a Giants team that came in 0-6 and the last ranked scoring defense in the NFL.