Hicks Musing

Please, DMN, would you ask Tom Hicks some tough questions? Pretty please?

I am not a business reporter, I know nothing of your "high finance" and I have only 38 minutes to write this column--yet I am going to tell you more about why Tom Hicks is selling the Dallas Stars than The Dallas Morning News has to date. So buckle up and set your faces to "stunned."

OK, that's a bit of an over-sell. This information is not stunning, per se. In fact, it's not even new information. All I want to do here is raise questions that should be asked of Tom Hicks, alpha dog of the investment firm Hicks, Muse, Tate & Furst and arguably the most powerful businessman in Dallas. And, truth be told, many of these questions were raised in the recent D magazine cover story, "Is Tom Hicks Going Broke?" by Dan McGraw. But there are follow-up questions to be asked of Big Swinging Hicks, and someone else needs to ask them, because I'm not very smart and I wouldn't know if I was being lied to or not.

In theory, though, the newspaper that made its reputation on having a world-class sports section and business section would have someone who could ask these questions, then write about them in an aggressive, authoritative way.

Tom terrific: Why, he wouldn't shade the truth. He's a high-profile CEO-type person. They're above such things.
Mark Graham
Tom terrific: Why, he wouldn't shade the truth. He's a high-profile CEO-type person. They're above such things.

Here's what we know, distilled for dumb people like me: Tom Hicks is selling the Dallas Stars, a local hockey concern. Packaged with this team, he's selling some other stuff that has some stuff to do with arenas and the hockey team. Some ice rinks and some management businesses or people or something that manages the new arena or the old arena or somesuch. I can't figure it out, and I failed to find the auction on eBay. Doesn't really matter. Bottom line, he hopes to sell the whole package for $250 million to more than $300 million or so. Lotta coin, in other words.

Now, one big unanswered question is this: Why is Big Swinging Hicks doing this? (If you need to understand why figuring out his motives is important to Dallas, read Jim Schutze's column on page 11. He is far smarter than I.) He was asked this question by the media. His answer: It's a good time to sell, I want to focus on my other biz-toys, I want to spend more time with my family.

Not to put too fine a point on this, but dumb ol' me thinks the family angle is bee-ess. Not just when he says it, but when any high-profile rich guy says it. Realize that anyone can spend more time with his or her family at any point in his or her life. You just do it. You don't need a business transaction to make it happen. The only people who don't have this option are poor people. Rich people can juggle schedules to make baseball games and birthday parties, no matter if they own one or two sports teams. Even if it is a part of his consideration, it ain't the driving force behind his decision to unload the Stars.

But newspapers have to buy this argument, which is why everyone trots it out when they hold news conferences. Fine. But he also says it is a good time to sell. Is it?

I wish the DMN would answer this question for me, but it's too busy not asking these questions. So I asked a guy who is a super-multimillionaire and who has been involved in lots of these high-dollar sorts of deals. I can't give you any info about him or details of what he told me, because I don't want him to be found out, and his number-crunching, even written out and carefully explained, looks like trigonometry to me. I had to cheat to pass trig. Bottom line, he says it's not the best time to sell, from a pure investment-return standpoint. "Pretty shitty return for a guy who is supposed to be a world-class investor," was the source's analysis. That I understood.

But even if we assume Hicks really believed it was a good time to sell--and what better time, really, than waiting until the stock market goes all bear on your ass to sell a multimillion-dollar package of properties--another question not asked or answered is this: If the plan was always to cash out, why have you been telling people for a couple of years that it only makes financial sense to own more than one team?

"You could see this sale coming for months and months," says Dan McGraw, the former writer-editor for U.S. News & World Report who wrote the D piece. "Even though in April he told me that the synergy of [owning both teams] was the only reason he was in it. He said owning one team doesn't make sense. But I knew everything was changing. I said on the Mike Fisher [radio] show six weeks ago that I thought he'd sell the Stars. Hicks Muse had a horrible year last year, and it's had an incredibly horrible summer. He needs cash to pay off his investment-return guarantee. The Rangers lose money. They're not worth enough. But the Stars he can sell."

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