Reprinted with permission from hockeybuzz.com
Many years ago, when Terry Pegula was broke trying to get his East Resources company off the ground Pegula told a friend that if he ever had the wherewithal to purchase his favorite hockey team, the Buffalo Sabres, he wouldn't hesitate.
Decades later, after selling East Rescources for $4.3B, he did just that.
Pegula had come across then Sabres owner Tom Golisano in Florida. Both were very wealthy men and both had ties to Western New York.
Golisano had bought the Buffalo Sabres from the NHL for roughly $90M in 2003 and had balked at offers to sell the team, mainly to Jim Balsille, for an huge return.
He knew what the Sabres meant to Western New York and held out until the right person came along.
That person was Pegula.
Pegula, flush with cash from the sale of East Rescources opened up his wallet and bought the team for about $190M. It was above market value, but in the end both Golisano and Pegula got what they wanted and the Buffalo area breathed a sigh of relief.
Former Bills owner Ralph Wilson had a personal commitment to keeping his franchise in Buffalo despite the vultures circling for decades. Upon his death earlier this year, it was assumed the team was in trouble, even with a binding lease that would essentially keep the team here for at least seven years.
And as players were stepping forward to express interest in purchasing the Bills from the trust Wilson left, there was an uneasiness in Western New York once again.
As rooted as the Sabres are, the Bills roots run deeper and wider than that. Relocation of the franchise that Wilson started in 1960 would be a devastating blow.
When he owned the Sabres, Golisano was fully aware of what the Bills meant to Western New York as well as Wilson's age and health. He saw the vultures circling. The billionaire who started his Paychex company on a $3000 loan in his Rochester garage stated back then that if the Bills were ever in trouble he'd step forward to try and keep the team in Buffalo.
He did just that, by jumping into the fray early in the Bills sale process.
Surprisingly, though, Golisano did not come forward with a bid on Tuesday. Perhaps he knows something about Pegula that the other didn't.
That being, when Pegula wants something he has the will and the financial wherewithal to go out and get it.
Reports came out that Pegula had put in a non-binding bid for around $1.3B for the Buffalo Bills, a franchise that Forbes estimated at around $870M.
It's a no strings attatched, open up the wallet bid that involves no one other than Pegula and his family.
And that was just the hammerlock. Should the other "bidders" up the ante, Pegula would unleash the stranglehold and just outbid them. With cash.
A couple of months ago he sold land associated with East Rescources to the tune of $1.75B, a move that had "Buffalo Bills" written all over it.
Word is out from John Kyrk of canoe.ca that the only real competition, the "Toronto Group" lead by rocker Jon Bon Jovi, cannot match even $1.2B because of the way the group is structured.
Wrote Kryk, "The Toronto group comprises Bon Jovi (as prospective controlling owner), MLSE chairman Larry Tanenbaum and the Rogers family, which runs Canada’s Rogers Communication Inc. empire.
The group as constituted with Bon Jovi in the lead probably is limited financially by the amount of cash the rocker can pull together to meet the 30% controlling-owner threshold the NFL demands."
Bon Jovi is worth about $500M and would need to shell out $300M which Kryk deems "an extraordinarily high number in such a sale."
As structured, it ain't happening.
Pegula is a smart man, not so much for what he knows, but for the people he brought in for this process.
In July The Buffalo News reported that the Pegulas hired heavyweight Steve Greenberg, managing director of elite investment bank Allen & Company to broker the sale.
Greenberg, wrote Tim Graham, "Greenberg's decision to work with the Pegulas also is significant.
Top sports brokers get wooed by clients to represent them in these matters. Brokers must determine the most attractive option because they get paid a commission only if a sale is executed.
He has brokered sales or purchases of the Atlanta Braves, Cincinnati Reds, Houston Astros, Milwaukee Brewers, New York Mets and San Diego Padres, Cleveland Cavaliers, Washington Wizards and, most recently, the Milwaukee Bucks."
Just prior the Pegula family released a statement saying their "strong desire to have the Buffalo Bills remain a centerpiece" of Western New York.
With Pegula's $1.3B initial bid, his financial wherewithal to go much higher and his commitment to keeping the Bills in Buffalo, Bills fans, the city of Buffalo and Western New York are breathing a sigh of relief. For now.
Although there are no bidders, at least yet, who could or would jump into the ring with Pegula, nothing is final until everything is signed.
Things could change, but their up against a guy who has two nickels to rub together.
One for each Buffalo franchise.