The Rigas family, owner of Adelphia Communications, has reached a tentative agreement to buy out minority partners in the Buffalo Sabres and take total ownership of the hockey team by March 15.
Final settlement of the team ownership question is seen as a necessary step if development plans for the city's downtown Inner Harbor are to move forward.
"I think this time we have it nailed down, and the transfer will occur, and everybody is on board," said John J. Rigas, Adelphia chief executive officer and president.
Rigas, 75, said the purchase agreement with the approximately one dozen minority owners, who describe themselves as the Knox-Buffalo Group, still requires approval of the National Hockey League, but the cable television magnate said he didn't expect a problem with the league.
Should the deal go through as expected, it will end almost two years of uncertainty since the Rigas family began running the Sabres, based on a memorandum of understanding reached when it became the majority owner of the hockey club in March 1998.
Roger Simon, an attorney and spokesman for the Knox-Buffalo Group, declined to discuss details, but he did acknowledge substantial progress has been made on reaching an agreement.
"We've come a long distance," he said. "We're in sight of where we need to go, and I'm hopeful (the sale) will close in a very short period of time."
Howard T. Saperston Jr., a member of the Knox-Buffalo Group, confirmed a March 15 date has been targeted for finalizing the transaction.
"Everything seems to be moving expediently toward a closing," Saperston said. "We seem to be on the same page now."
Completing the transfer of the Sabres to the Rigas family is considered a vital step toward redeveloping the Inner Harbor. A 1,000-employee operations center that Adelphia proposes for a location near Marine Midland Arena would be the anchor of the planned $150 million urban entertainment district on the waterfront.
Before that high-rise operations center and related development can occur, a complicated, interlocking series of negotiations involving Adelphia, its associated private developers, New York State, the city and Erie County has to be completed.
In order to complete those negotiations -- which already have included Gov. George E. Pataki and top officials in the State Legislature -- an agreement must be reached on who represents the Sabres and Marine Midland Arena.
"Understanding who clearly is the owner of the Sabres is an important step to make sure we know who we're dealing with on that issue and have clear lines as we substantially forge in the development issue over the next 60 days," said Alan DeLisle, executive director of the Buffalo Economic Renaissance Corp.
"To the extent that the ownership situation is clarified, we think this would be helpful for all parties involved," said Charles A. Gargano, chairman of Empire State Development Corp., the state agency involved in the project.
The completion of the Rigas purchase of the Sabres also would be the final chapter of a saga that began in September 1993, when Adelphia, a national cable company based in Coudersport, Pa., signed a five-year contract to broadcast the Sabres' games on Empire Sports Network.
Rigas became the largest single stakeholder in the Sabres in April 1994, when he invested $15 million to keep the struggling hockey club afloat until the arena could be completed.
His financial stake grew over the next few years as he continued to provide money to help the team meet its payroll and other obligations. By December 1997, he became the majority owner of the team and was officially named chairman in March 1998.
Efforts to buy out the remaining investors, however, were slowed because of the complicated financing associated with the arena, sources say.
The $122.5 million arena, which opened in September 1996, was financed by a public-private partnership that included four banks, the state, the county and the city.
The Rigas family revealed last April that the hockey club was in default on repaying a $32 million bank loan taken out to build the arena, saying the hockey club's 30-year lease for Marine Midland Arena was a guaranteed money loser. The club ownership has said it hopes to negotiate a more favorable lease for the arena.
The Knox-Buffalo Group has been led in its negotiations by Robert E. Rich Jr. and attorney Robert O. Swados.
Swados declined to comment about progress in the ownership talks, and Rich could not be reached to comment.
Sources say the Rigas family will buy out all the other partners in the hockey club and become sole owners. They dismiss speculation that Rich and Swados are being paid extra for their work in negotiating the sale.
Speculation that Seymour H. Knox IV, son of the late Sabres Chairman Seymour H. Knox III, would be left with a large debt linked to Sabres loans obtained while the hockey club was in dire financial straights also was dismissed by sources.
Knox, who remains associated with the hockey club, declined to comment.
CHRONOLOGY: The Rigas family's growing influence over the Sabres:
- September 1993: John Rigas announces Adelphia has signed a five-year contract to broadcast Sabres games on Empire Sports Network.
- January 1994: Rigas offers to pay $15 million to keep the struggling Sabres viable while the new area was being built. He would be the largest single investor with a one-third interest in the team and an option to expand to 40 percent with another $5 million investment.
- April 1994: Rigas completes the deal, which also makes him one of three voting partners of Niagara Frontier Management Corp. Others are Robert O. Swados and Seymour H. Knox III.
- February 1996: Rigas is reported to be willing to invest another $6.5 million to help Sabres meet payroll. In return, he will obtain warrants that allow him to gain even more control of the organization.
- May 1996. Seymour Knox III dies.
- November 1996: An internal management struggle ends with Doug Moss resigning and Lawrence Quinn named president with the backing of Rigas and other owners. - June 1997: Adelphia takes over the Buffalo cable system. Adelphia had served many of the suburbs for years.
- November 1997: Rigas is reported to be preparing to buy out partners and take complete ownership of the Sabres.
- December 1997: A cash crunch nearly forces the team to miss its payroll. A deal follows that would make Rigas the team's majority stockholder and end the Knox family's 28-year control.
- January 1998: John Rigas becomes interim chairman of the Sabres, replacing Northrup R. Knox. In an interview, he promises his family is anticipating a long-term investment in the hockey club. He also reaffirms his commitment to Buffalo.
- March 1998: Rigas becomes majority owner of the Sabres.
- April 1998: State officials say the Sabres are more than three months behind on their lease payments and the club is trying to renegotiate the terms of the deal.
- April 1998: Larry Quinn is fired. Tim Rigas takes over as CEO; the president job is left empty.
- July 1998: Northrup R. Knox dies.
- October 1998: Rigas acknowledges the family has not completed its takeover of the team, saying the issue will be resolved within weeks.
- October 1998: Tim Rigas says the family wants to build on its investment in the Sabres and help with the city's waterfront redevelopment plans. He estimates up to 1,000 new jobs would be created by Adelphia.
- March 7, 1999: Rigas family steps up its effort to renegotiate the arena lease, saying in an interview they want a deal similar to that struck by the Buffalo Bills where the public has assumed all the cost and most revenues go to team. They say the Sabres lost $15 million annually in 1995, 1996 and 1997 and are on pace for same loss in 1998-99.
- March 24, 1999: Mayor Masiello designates Adelphia, Cordish Co. and Benderson Development as his "dream team" to redevelop the downtown Inner Harbor.
- April 1999: The Rigas family reveals they are in default on repaying $32 million bank loan taken out to build the arena, saying the facility is not generating sufficient revenues to repay the money.
- July 1999: Adelphia spends $30 million to buy naming rights to the new home of the Tennessee Titans in Nashville.
- September 1999: Sabres begin third season with ownership issue unresolved. Rigas family continues to operate team based on a memorandum of understanding.
- Sept. 16, 1999: Adelphia reveals plans for a waterfront building that would house, among other things, an operating center for its fast-growing Adelphia Business Systems subsidiary. It would employ 1,000 people to start. The investment, however, is linked to progress on eliminating the financial strain of the current arena lease.
- Sept. 20, 1999: Gov. Pataki promises the state will help Adelphia on its Inner Harbor project, according to John J. Rigas.
- January 2000: The city establishes a timetable that calls for talks on the Inner Harbor project to be wrapped up by next month and a proposed agreement before lawmakers by March.