I kind of went hog wild on the franchise devaluation thing around here last week. Some agreed, others felt I (and my pinch hitting friend Ethan) went a bit overboard. Well, let’s throw this bit of news into the pot and see what cooks up:
Private equity legend Tom Hicks’ sports team holding company has defaulted on more than $500 million in loans, a source has told FINalternatives.
Hicks Sports Group, which owns baseball’s Texas Rangers and hockey’s Dallas Stars, failed to make its interest payment on $525 million in syndicated bank loans on Monday. The group is now in talks with its lenders about a forbearance.
Hicks made his billions on leveraged buyouts, founding private equity firm Hicks Muse Tate & Furst, now HM Capital, in 1989. He retired from the firm in 2006.
According to the source, who has seen documents relating to the loans, Hicks defaulted on a $350 million bank term loan, $100 million second-lien loan and a $75 million revolving credit facility. A spokesman for Hicks Sports declined to comment.
Hmmm . . . I wonder what the collateral was for those loans. I wonder how much that collateral will bring in what would be the functional equivalent of a foreclosure sale?
UPDATE: Hicks’ response to the banks: A plea for them to “be reasonable.” Reminds me of the Shmatte pleading for Tom to “look into ya heart!” when they were walking into the woods out at Miller’s Crossing. If that’s the best he’s got, he’s probably in some pretty big trouble.
(thanks to reader Jim D for the heads up)