The company that owns baseball's Texas Rangers and hockey's Dallas Stars has defaulted on about $525 million in loans, with owner Tom Hicks saying on Friday that he intentionally made the move to help negotiate with banks.
Hicks told The Associated Press the teams won't be affected after Hicks Sports Group, his holding company, didn't make an interest payment on the syndicated bank loans Tuesday. A syndicated bank loan is one made by a group of lenders to one borrower.
Hicks also owns a 50 percent stake in Liverpool FC in the English Premier League, but that is owned through another entity.
"What we want is the banks to allow us to use our interest revenue," Hicks said. "We need 51 percent approval, which we anticipate. It is hard to get two banks to agree to anything, much less 40 on a timely basis."
A financial news Web site called FINalternatives first reported Friday that Hicks Sports Group did not make its interest payment Monday on a $350 million bank-term loan, $100 million second-lien loan and a $75 million revolving credit facility.
"Like so many other companies and institutions, HSG has been impacted by a global credit crisis which no one could have anticipated," Hicks said in a statement. "The company is not asking for additional money; it is only asking for full access to the interest reserve account and revolving credit line as well as some amendments in the debt covenants."
He said that the negotiations have nothing to with his other assets or his family's assets.
"This will be a nonevent to players, to the fans, our sponsors, our vendors, anybody," Hicks told the AP.
Last week, Hicks said he was looking for investors to buy minority interests in the Rangers and the Stars. He said he was willing to let limited partners purchase up to 49 percent of each club, leaving him with a controlling interest. Hicks said he owns 95 percent of both teams.
"I'm bringing in minority partners, so I can pay off the loans," he said Friday. "I wouldn't normally do that. In this particular environment, that's what we should do."
He said that he hopes that negotiations with the banks will be complete in a couple of weeks.
"All we want the banks to do is be reasonable," he said.
"Under normal market conditions, it would be a nonevent," he said.