Members of the Metro Sports Authority are using a possible breach of contract to negotiate more favorable terms for the city’s $7.4 million subsidy to the Predators.
Media reports have revealed the lead owner, David Freeman, had a $3 million tax lean from the IRS the same year he helped purchase the hockey team.
Rusty Lawrence is chairman of the Sports Authority’s finance committee which met this morning. He says the lean likely puts the team in default.
“I think we’re in a little more position to be able to ask for some more things. We don’t want to call a default. They don’t want us to call a default. That’s great. Nobody wants to call a default. But there are certain remedies that we have to put into place so there’s not a default.”
Defaulting would trigger a $50 million penalty, but the team could also leave town. Instead, Lawrence is asking the owners extend their contract with the city by two years, so the team would play in Nashville at least through 2012. Sports Authority members also want to see more details from the owners about their net worth to be sure they could pay the default penalties if they had to.
A team of city attorneys and a member of the Sports Authority are working with the Predators and plan to report to the full board at the end of the month.
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