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The downside of sports ownership

Owning a sports team in North America in the last 50 years would seem to be the equivalent of having a license to print money. Be prudent but intelligent in managing talent in the squad, collect a nice revenue sharing payment for the national television contract, and watch the asset value of the franchise march onward and upward at 10-15 per cent per year. But not in this case. Seven years of owning the Blues in St. Louis may have taken a significant chunk out of Bill and Nancy Lauries' fortune. They are poised to sell the club to a group led by Dave Checketts, former president of Madison Square Garden:

The Lauries bought the Blues in 1999 for $100 million. They will receive about $150 million from Checketts, but will spend $60 million of that to pay off the arena bonds, another $50 million out of their own pocket to pay off outstanding team debt plus an additional $15 million to $25 million to cover this season's losses. They also incurred annual losses totaling about $200 million from 1999 through 2005. All told, it appears the Lauries will leave with $285 million less than before they purchased the Blues.

....The case of the Blues, though, is extreme. The team lost nearly $48 million in the season before the lockout, beset by low attendance and a high payroll. Local attendance continued to lag this year, even as the league set new attendance records. [Schmidt and Berri, check!] Through April 10, the Blues ranked 28th out of the NHL's 30 clubs in total attendance. Average game attendance slipped 23 percent, from 18,560 last season to 14,240 this season. That marks the worst decline in the league.

It would be interesting if a smart reporter like Dave Leonhardt would sit down and talk with the Lauries about their experience. One buys a sports team not just as an asset appreciation play, but with some anticipation of sporting success. The Lauries seem to have been hammered on both fronts.