Atlanta Spirit co-owner Michael Gearon said there is now a “sense of urgency” to find additional investors or a buyer willing to keep the Thrashers in Atlanta. If the ownership group does not get additional financial help in the near future the franchise could be sold and moved to another city.
“If we are faced with that as the only alternative, that’s what’s going to happen,” Gearon told the Atlanta Journal-Constitution in an exclusive interview Tuesday. “I don’t think there is an ability to stomach another $20 million in losses. We just can’t do it.
“The reality is we need fans showing up and we need investors, or a primary investor.”
There is no buyer currently lined up to purchase the Thrashers, according to a person familiar with the situation.
The Thrashers have long been the subject of speculation that the franchise would be sold and moved with Canadian cities Winnipeg, Quebec and Hamilton most often mentioned.
Atlanta Spirit has been trying to sell the Thrashers for six years – starting almost immediately after purchasing the team – according to the Jan. 21 lawsuit filed in Fulton County Superior Court against Atlanta law firm King & Spalding.
The group filed a $200 million malpractice lawsuit against the firm saying a “fatally flawed” and “botched” contract written to buyout former partner Steve Belkin prevented any Thrashers sale the nearly five years before that suit was finally settled in December.
Before the current litigation, the Atlanta Spirit stated publicly that it was looking for investors for the past two years for the Thrashers, Hawks or both franchises. According to the lawsuit, ownership reported more than $130 million in operating losses since 2005. The Thrashers value also has dropped by more than $50 million, the document says.
“I want to see this team in Atlanta,” Gearon said. “We are working to keep it in Atlanta. We need others to step in and help and, as of now, no one in the Atlanta community has.”
Reported attendance – which refers to the number of tickets distributed but not actually the amount of people at the game – for the 2009 calendar year was 368,652, a 15 percent drop from the previous year, according to documents from the City of Atlanta and Fulton County Recreation Authority. The Thrashers currently are 29th in the 30-team NHL in attendance.
The seven partners talked with potential buyers while they were entangled in litigation with Belkin, the lawsuit says. Because Belkin still owned 30 percent of the teams, the seven other partners “could not convey free and clear title to the franchise and thus were not in a position to sell,” the lawsuit says.
“We need fan support. We need investors,” Gearon said. “I would love to have other members of the Atlanta community step up and take a lead role in this and I would be glad to stay in. We need support. We’ve put a lot of money into this team.”
Gearon said he is speaking out about the future of the franchise because he does not want potential investors willing to keep the team in Atlanta to step forward after a sale has been completed.
“Long term, it’s important that a message gets out,” Gearon said. “Hopefully, I think it helps having fans show up because it demonstrates that the city is committed to the team. More importantly, I hope one, two or three other wealthy guys say ‘OK, we’ll hop on this raft with you. Even though you are in choppy waters, stage four rapids, we’ll get on this.’”
NHL Commissioner Gary Bettman reiterated the NHL’s stance that there are no plans to expand or relocate when asked about the prospects of Canadian cities Winnipeg and Quebec City getting a franchise at last month’s All-Star game in Raleigh. The commissioner also acknowledged the Atlanta Spirit’s search for investors.
“The last few years have been taxing on ownership from a financial standpoint in respect to the basketball team, the hockey team and the arena,” Bettman said in January. “If people are looking to restructure the economics to bring in more capital, it might not be crazy for them to be seeking to add to the wherewithal to deal with those issues.”
If the Thrashers were to be sold and moved, the Atlanta Spirit would lose a pro-rated portion of the $10 million annual naming rights fee to Philips Arena. It would also lose concession revenue and other income generated by the Thrashers dates in the arena.
The NHL is currently involved in several ownership issues, the biggest being in Phoenix. The city of Glendale, Arizona has been involved in a $100 million bond sale as part of a purchase agreement with a prospective buyer that would keep the team in the city. Phoenix has long been rumored as a franchise that could return hockey to Winnipeg, which lost the Jets to Arizona in 1996.
Staff writer Kristi Swartz contributed to this article.
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