To say that Hicks Sports Group, the ownership of the Texas Rangers and NHL Dallas Stars, is a mess, might be the biggest understatement in sports business for this year, and possibly beyond. HSG, who is headed by Tom Hicks, is $525 million in debt, which would be bad enough, but then there is this:
- They owe $17 million in loan money to the league fronted them to make payroll;
- Failed to pay at least $39.55 million into a deferred compensation fund to players, which violated the collective-bargaining agreement, and;
- They had to borrow $57 million from the league’s credit facility, an action that occurs with many clubs, but is being pawned off on the would be ownership group headed by Pittsburgh sports attorney Chuck Greenberg, and current Rangers president and Hall of Fame pitcher, Nolan Ryan.
It’s enough to make one say, “It couldn’t get any worse.”
Well, it has.
As first reported by Michael Ozanian of Forbes, a “lawsuit was filed in Dallas County District Court in February by two companies that worked on the development of Glorypark against entities controlled by Tom Hicks.”
Glorypark was a 75 acre commercial and residential development that Hicks envisioned next to Rangers Ballpark in Arlington that Hicks started in 2005 but has been stuck in neutral since 2008 when Hicks began his slide into the aforementioned $525 million in debt.
In the court documents filed by Architecture firm RTKL and contractor VCC, the firms are seeking millions of dollars for work orders started by Hicks, but now sit idle.
As but one aspect of the claim, VCC says it is “owed not less than $4,018,960.00 inclusive of the $484,765.11 in design fees that would be remitted to RTKL upon payment to VCC for the parking design work.”
As to how the Glorypark deal impacts the sale of the Rangers, the land that was part of the stalled development is not part of the 153 acres that are rolled into the club sale, but as Ozanian notes, “the lawsuit could throw a monkey wrench in the deal if Hicks' creditors decide to go after the prospective owners.”.
If there is a silver lining for Greenberg/Ryan group, it’s this: there’s little doubting that the bloom is off the rose for any other would-be bidders of the club. With the additional debt that Hicks has tossed into the mix, the odds of the deal gaining in value is exceptionally slim. That would seem to help move the creditors toward settlement on the $570 million sale. As one National League executive said the sale, “it’s more than a bit messy.”
See the lawsuit filed against Tom Hicks:
Select the image above to read the
complaint against Tom Hick (PDF)
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