Erie County Executive Joel Giambra went on record this week with the Associated Press suggesting that bankruptcy was inevitable for the financially strapped Buffalo Sabres. National Hockey League Commissioner Gary Bettman believes Giambra's remarks were "inappropriate," as they were not in the best interests of the Sabres or Buffalo.
Giambra's statement was more than inappropriate; it was irresponsible. The threat of bankruptcy is something that could cripple season ticket sales and further worsen the Sabres' poor financial situation. Ticket sales are already much lower than expected and the lack of confidence shown by the Erie County executive will do nothing to aid the struggling Sabres. Even though his point does have a certain degree of merit, given the debts incurred by the management of John Rigas, his timing is poor and his motivations unclear. Should the Sabres leave Buffalo - a real possibility should the team declare bankruptcy - it would deal an immeasurable blow to the community, both commercially and socially.
The specifics of the Sabres' fiscal troubles include a loan that now has the team in severe debt. Rigas, Adelphia CEO and Sabres owner, orchestrated a loan of $157 million from the communications company to the hockey team - money that the now-bankrupt Adelphia needs and is sending its creditors to the Sabres to collect. The team, which is currently being run by the league on an interim basis, cannot afford to pay the money back. This is in addition to the fact that the NHL is frantically trying to replace Rigas as the team's owner and secure new management.
While bankruptcy would solve some of the club's financial issues, including the Adelphia debt, it would also put the City of Buffalo in a precarious situation. The point of concern to any bankruptcy discussion, as reported by the Buffalo News, is the Sabres' 25-year lease of HSBC Arena. The lease, signed in 1996, could be voided if the team declares bankruptcy. Without a lease, the team, which is already for sale, would be vulnerable to a forced move from Buffalo. Paul Allen, former co-chief executive officer of Microsoft and owner of the NBA's Portland Trail Blazers and the NFL's Seattle Seahawks, is reportedly desperate to move an NHL team to Portland, Ore. Without a lease, there is no financial tie to Buffalo; subsequently, it would not be difficult for him to purchase the Sabres and move the team to the West coast, despite Bettman's assurance that the league wishes to keep the team in Buffalo.
The matter at hand thus becomes whether whoever buys the team will be willing to absorb a $157 million cost to Adelphia immediately. Among prospective buyers are Tom Golisano, the Rochester native and candidate for New York State governor. Even before the latest bankruptcy talk, there is doubt that anyone will buy the team in its current financial plight. The reluctance is understandable; an immediate loss of $157 million is no small matter. Giambra's feelings, however accurate, do not help a delicate situation.
Giambra comes across as unsympathetic to both the city and its hockey fans. It also seems as if he isn't concerned about yet another waste of space and resources that would be HSBC Arena if the Sabres leave town. While the venue would still be available for the occasional concert, the Sabres generate the most revenue. Additionally, since the team plays downtown - unlike the Bills, whose home stadium is in Orchard Park - this loss would be catastrophic for the commercial viability of downtown Buffalo, the waterfront district and financial centers.
Photo: Meredith Forrest Kulwicki
