'Adelphia intends to disclose in a Securities and Exchange Commission filing by today that it bought furniture from a company the family owns, allowed personal use of company airplanes and other perks, provided financing of a golf course built for the family, and was somehow involved in the family's purchase of the Buffalo Sabres hockey team, the paper said, citing the people. Adelphia officials couldn't be reached to comment early today.'
Archives for May 2002
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'Adelphia's investment in the National Hockey League team was never fully disclosed, and it is not clear whether the company's founder, John Rigas, borrowed money to buy the team as part of a lending agreement in which Adelphia was liable for the family's purchase, or whether the family had the company itself make the acquisition, the newspaper said.'
'Adelphia's internal investigators are still unsure about Adelphia's investment in the Sabres hockey team, these people said. The internal investigators believe that the Rigases used Aldephia money to invest in the team beginning in 1994, according to these people. Now, these people said, it appears that the Rigases may have also used company money to support the team by having Adelphia buy advertisements from the team.'
'Basically, it will come down to this: Any owner willing keep this franchise in Buffalo will bet the annual rate of appreciation outweighs the annual losses. Owners who lose $50 million over 10 years and watch the franchise appreciate by $60 million are called investors. Owners who lose $50 million and watch it appreciate $25 million are called former investors.'
'Then there's the Buffalo Sabres, which are owned by the Rigas family. The team reportedly is losing more than $10 million a year and the staggering decline in the Rigas family's wealth – more than $565 million since last June – makes those losses even harder to bear.'
The Buffalo Sabres have endured all sorts of dilemmas in their history. They had that no goal controversy, crucial injuries at key times and bitter battles between a GM and a head coach. All those pale by comparison with the problems the team is going through currently.
'Pitts and others fear two scenarios, either of which could allow the Sabres to break their 30-year lease and move: that the Sabres or John Rigas could seek bankruptcy protection, or that the NHL could take over a troubled franchise and determine its fate. As Pitts said of any such scenario, "This could be the worst nightmare for Buffalo Sabres fans."'
'Thursday, in a bid to prop up the Sabres, New York State forgave a US$25-million loan linked to construction of the HSBC Arena. Joel Giambra, the elected head of Erie County, which includes Buffalo, said covenants prevent a buyer from moving the Sabres out of his city. "The Sabres are here to kick the ass of the Maple Leafs for a long time to come," Mr. Giambra said.'
'The problem for the NHL is that the value of the Sabres – already a struggling small-market team – is inextricably linked to Adelphia through loan guarantees and broadcast deals. No Adelphia, no Sabres, say financial experts. Hockey sources say it's unlikely another local buyer could step up to buy the club should the auditors and the markets sink Adelphia. Wither Buffalo in that scenario? On to Portland? (Paul Allen has had plenty of chances to buy into the NHL and has passed.) Houston? Milwaukee? Las Vegas? Rancho Cucamonga?'
'"The Sabres are going to be here for a long time," Giambra said. "There might be a change of ownership, but the team will stay right here in Buffalo in the HSBC Arena, and that's because we had the foresight and vision to negotiate that in the lease."'