ST LOUIS, Mo – With the impending rise in the Capital Gains tax quickly approaching, the St. Louis Blues have found a restrained ending to what has been a thriving two seasons under Dave Checketts and SCP Worldwide. For the last few years the Blues have slowly and steadily emerged like a Phoenix from the ashes of what was once a proud free spending franchise.
The turnstiles moved with ease as fans throughout the Midwest flocked to see Adam Oates, Brett Hull, Bernie Federko, Wayne Gretzky, and Curtis Joseph, to name a very small few. The franchise was one of the marquee gold standards in what was a burgeoning sport in North America and the benefactors were very satisfied in the results.
However, over-penetration of the marketplace followed by total saturation led to the demise of the fast emergent hockey world. The NHL was no longer found on a regular TV network or basic cable television in the United States, players salaries blossomed, and fans became jaded by skyrocketing prices in a sport that had offered great entertainment on an affordable budget.
The Blues took the hardest hit after the strike season. Gone were fan favorites like Chris Pronger and gone were the cast of players that enticed fans through the gate. The St. Louis Blues were a hurting franchise in the new NHL; the pinnacle of North American hockey that was created to play hard fast smash mouth ice hockey had been replaced by a higher scoring European game with less contact and more restrictive rules.
St. Louis would not emerge from the lockout season in good shape, fiscally or in the hockey sense. The Blues were in fact blue. Ownership changed hands as the fans restlessly groaned, after all those in St. Louis are accustomed to winning whether its hockey or baseball, and the Blues certainly were not winning. The ownership offered reasons for not signing players in the offseason, and the fans looked on indifferently unsure of what to make of the issue at hand. The Blues were well under the salary cap and could easily sign a couple of players, but instead ownership continued to offer condolences and a promise of a better future through change.
The always polite Midwestern fans remained as such, never once demanding much more than straight answers and ownership delivered despite growing skepticism. When Dave Checketts emerged as the buyer of the Blues and promised a Stanley Cup Blues fans were enticed to become interested again. The fans felt that they were entitled to the Cup given the team won it. Checketts understood the frustration of the fans and treated them to an opening pitch on July 4, 2007 at the Cardinals game to new St. Louis Blue, Paul Kariya. Despite the signing of Kariya St. Louis remained calm at the trade deadlines and in the off seasons. They were reluctant to “buy” players and instead kept beating the path for youth worthy of draft picks.
Over the last two seasons the Blues have shown the fruits of the tiny saplings planted during those meager years. The team has finished with a winning record in both seasons and has made the playoffs as well. The fans have returned in droves, excited to see the new superstars of today. The franchise and the fans understand one another once again and it is with that that success is found.
I was once told there is no reward without sacrifice and thus emerges yet more sacrifice, but in what shall yield the reward? The 75% stake holders of the St. Louis Blues are an investment firm known as Towerbrook Capital Partners. The group of investors with holdings in the United States and Europe have begun to express interest in the sale of the franchise based not upon failed business practices, but rather on practices too successful.
Over the last four seasons the St. Louis Blues have raised their value $26 million from the initial purchase point (Forbes). Beginning in the coming years, the Capital Gains Tax will increase from 15% to 20% with that number rising yet again to 23.8% when the healthcare reform goes into effect. The business model of the St. Louis Blues yields a very narrow margin of profit and loss given they make the playoffs or not. The narrow margins create little room if any for larger taxation based on the fact that the team can quickly become cash poor even after winning the championship.
It appears yet again that the St. Louis Blues are poised to lead the NHL and for that matter organized professional sports. With the complex issues of finance, law, and taxation, the lay person may never quite understand the basics of what is beginning to occur. With that being said the future of the St. Louis Blues appears to be good, as the team is winning on and off the ice. But as those in St. Louis have begun to notice, with sacrifice comes reward, and with reward comes great responsibility.
For the fans of the Blues and Cardinals there is little to be worried about as their teams will be followed to the very end. The Blues will undergo a change in ownership with Dave Checketts still maintaining control of the franchise, and Albert Pujols will continue to be a Cardinal. As it seems nothing in life is certain except for death, taxes, and St. Louis sports.
Towerbrook Capital Partners commented on their website that they have been quite pleased with the results of the St. Louis Blues and the work of SCP Worldwide inciting the idea that Towerbrook will allow for an easy sale and therefore create no unnecessary pressures upon the managing partnership.
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