- The Washington Times - Sunday, May 26, 2002

Sports fans have grown rather accustomed of late to the woes of corporate America. In recent months, Enron Corp., PSINet Inc. and Kmart Corp., have fallen apart in horrific fashion. Their names have come off stadiums, race cars and general sponsor lists, and thanks to the extra exposure the sports connections provided, rehabilitating those brand names has grown even more difficult.
The ongoing crash of Adelphia Communications Corp., however, carries the corporate disaster trend several steps further, at least as it pertains to sports. The recently deposed chairman of the Pennsylvania-based company, John Rigas, is the lead owner of the Buffalo Sabres. The company also owns Empire Sports Network in New York state, the naming rights to the Tennessee Titans' home stadium in Nashville and other sports sponsorships.
Adelphia's total sports portfolio is not nearly as large or diverse as those of AOL Time Warner, News Corp., or most of the other major corporations now ensconced in pro sports. But since Adelphia, the country's sixth largest cable company, is collapsing, it provides a dark window into the other side of the mass integration all these companies have worked so hard to achieve.
Here is the short version of Adelphia's current problems: Rigas and three sons, all senior Adelphia executives, have acknowledged the company guaranteed $3.1billion in previously unreported debt to outside entities controlled by the Rigas family. In the post-Enron world of corporate accounting, such secrecy is strictly taboo.
The fallout has been massive. Adelphia Business Solutions, a spinoff of the main company, filed for bankruptcy in March, and that main company soon could follow suit. Company stock has lost more than 90 percent of its value since last June, and Adelphia is being investigated by the Securities & Exchange Commission and grand juries in both New York and Pennsylvania. Total company debt amounts to more than $14billion. The Rigas family last week agreed to cede control of the company and turn over more than $1billion in assets.
And the result of all this does not bode well for any of the Adelphia holdings. The Sabres are a virtual lock to remain in Buffalo for the next generation. A strong 30-year lease for HSBC Arena, partly owned by local public entities, bars relocation and mandates the NHL uses its best efforts to keep the team where it is. But until Rigas decides to sell and a new owner arrives with some money to spend, the team will exist in an even worse version of its current cash-strapped state.
The Sabres lost about $10million this past season, season ticket renewals are believed to be proceeding poorly and the team again will not be a major player in the free agent market this summer.
"The events at Adelphia have caused a disruption to the cash-management process of the Buffalo Sabres and the HSBC Arena," the team said in a statement. "We are working to remedy this situation as soon as possible."
The Titans, meanwhile, last week went to court seeking a motion forcing Adelphia Business Solutions to start making up the missed payments on its 15-year, $30million naming rights deal or end the contract altogether.
Neither option really does much for the team, at least in the short term. If Adelphia gets current again on the payment schedule, the Titans will continue to be associated with a company becoming yet another poster child for corporate chicanery. If Adelphia leaves the contract, the team will seek another naming rights sponsor in an ice-cold market. Among NFL teams, Seattle, Baltimore and New Orleans are after the same things.
"There's no question it's a very difficult situation the Titans are in. These are tough, tough issues," said Dean Bonham, an industry consultant who frequently works on naming rights deals. "But a main thing in the team's corner is that if they do get freed from Adelphia, their naming rights are now worth a lot more than what Adelphia paid."
Could any of this been prevented? That's also a tough question. The NHL, after being burned by several less than honorable owners such as John Spano and Howard Milstein in New York, has spent considerable resources in recent years beefing up its review procedures of potential and current owners. League sources say nothing deeply problematic about Rigas surfaced during the long and complex transfer of the team. And in early days of his ownership, Adelphia did nothing but grow, adding additional cable systems and employees at an impressive clip.
Rigas, now being widely assailed on Wall Street, is still not without supporters. Officials at St. Bonaventure University in New York state, where Rigas' son Michael is a trustee, have no plans to change the name of the school's basketball facility, Adelphia Court at Reilly Center. The university granted Adelphia the floor naming rights last November after years of donations by the company and Rigas family.
"The situation here is status quo," said Steve Mest, St. Bonaventure athletic department spokesman. "We're all kind of in shock as to what's happening. Mr. [John] Rigas has been very helpful to the university. It's a real shame what's happening."
But empathy is not stopping some connected parties from looking ahead to life after Adelphia and Rigas. Erie County, N.Y., executive Joel Giambra says he has been talking to several investors, both from inside and outside greater Buffalo, about investing in the Sabres and Empire Sports Network should Rigas ultimately post the for-sale sign. Given the deep state of Adelphia's troubles, that looks to be inevitable.
"This, for right now, falls into a category of things [the county] doesn't really have any direct control over," Giambra said. "But we're definitely an interested party and are watching the situation closely. There are a lot of jobs at stake, part of the fabric of our area. We have an obligation to stay engaged on this."


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