The Facts Regarding The Finances and Affiliations

December 5, 2007 - By

The existence, financial stability, ownership and even the NHL affiliate of the Rochester Americans is all up in the air right now. A lot of what has been going on is “he said, she said,” and all sorts of politics. I thought I’d take some time to start at the beginning and work up to where we’re at right now. I’m hoping to get all of the facts only and leave out opinions, insight, and speculation, those will come in a later article.Here’s a general time line of what has happened:

January 5, 2007 –

(This information was not made public until November 29, 2007)

Source: News 10 NBC (Rochester, NY)

View a pdf of the letter Larry Quinn sends a letter to Steve Donner showing interest to start discussing the affiliation between the Buffalo Sabres and Rochester Americans for the 2007-2008 season and beyond. The letter states the Sabres are interested in discussing two alternatives, one of which is a long term affiliation agreement, the other is the outright purchase of the Americans.

March 9 2007 –

Steve Donner made a public announcement in the Rochester Democrat and Chronicle that the Rochester Americans and Knighthawks would discontinue or suspend operations during the coming season unless a more favorable lease agreement is negotiated with the City of Rochester.

March 27, 2007 –

Source: As reported by the Press Box Power Trip Rochester Americans and Knighthawks owner Steve Donner apparently held a press event today in reaction to Mayor Bob Duffy’s offer in his State of the City address Monday night to conduct an audit of the teams’ finances. I couldn’t make the press thing, but Donner issued a written statement as well. Oh, yeah, and here it is:“I am encouraged by the Mayor’s remarks last evening and his commitment to help the Amerks and the Knighthawks on a long-term basis. We will agree to participate in an independent audit of our financial records as a long as the City agrees to a mutually acceptable level of confidentiality. We have provided 11 years of financial statements to the City of Rochester and are confident that independent analysis will confirm our need for a better lease for both teams and a larger share of the revenues that our organizations create.”

April 6, 2007 –

(This information was not made public until November 29, 2007)

Source: News 10 NBC (Rochester, NY)

View a pdf of the letter

Larry Quinn sends another letter to the Amerks, this time addressed to Steve Donner, Walter Turek, and Randall Latona. The letter again shows interest by the Sabres to both discuss a way to continue the long-standing affiliation between the Sabres and Americans, as well as interest in purchasing the team.

May 10, 2007 –

Source: City of Rochester

Rochester Mayor Robert J. Duffy announced an agreement with SMG (management company of Blue Cross Arena) and the Rochester Amerks / Knighthawks for a one year extension of the Amerk’s lease at the Blue Cross Arena ending in June, 2008.Also announced was a loan of $100,000 as well as “a commitment to resolve the matter one way or the other by October of 2007.”

May 24 2007 –

Source: Democrat and Chronicle / View copy of lawsuit (pdf) Randall Latona files a lawsuit seeking the removal of Steve Donner from all positions of power within the Rochester Americans and Rochester Knighthawks organizations.

The lawsuit goes on to say, “and to compel said defendant Steven Donner to account for his neglect, failure to perform or other violation of his duties as a corporate manager and regarding the waste of corporate assets committed to his charge; and for breach of fiduciary duty;”

A few of many things worth bringing up alleged in the lawsuit:

  • Donner failed or refused to respond to a recent expression of interest by the Buffalo Sabres in purchasing Rochester Amerks, Inc
  • Donner made the announcement on March 9, 2007 without the consent or discussion of other partners in the organizations.
  • Blue Cross withheld gate receipts from playoff games due to rent arrearages.
  • Debts for equipment for players, league dues, pensions, and more to sponsors, and advertisers all totaling well over $100,000 (you can read exact amounts in the lawsuit, many of which have since been paid).
  • April 7, 2006 Randall Latona and Walter Turek formed an entity called T&L Funding Group, LLC which furnished a $2.1 million dollar financing package to the Rochester Americans. Of that loan approximately $700,000 went towards additional working capital, the rest to acquire existing debt.

No new information was reported from the time the lawsuit was filed in May 2007 until October when we heard from the Panthers below, and the outcome of the lawsuit in November.

October 26, 2007 –

The Palm Peach post reported that the Florida Panthers are interested in having a sole affiliation with an AHL team and have shown interest in establishing a team in either Glenn Falls, NY or Cornwall, Ontario.

Glens Falls City Councilman-at-Large John “Jack” Diamond said he was not aware of any interest by the Panthers organization in Glens Falls, but it would be great news if the report is true. “If they’re interested, give them my cell phone number. I’d be happy to show them the building,” Diamond said.

November 16, 2007 –

Source: Democrat and Chronicle

A judge refuses to remove Steve Donner and Walter Turek of the Rochester Americans and Knighthawks, saying that minority owner Randall Latona lacked evidence to support his claim that the sports teams are teetering on the brink of financial collapse.In his ruling, New York State Supreme Court Justice Kenneth Fisher did order the teams to turn over financial information to Latona that had been requested this past spring.Additional newsworthy items brought forward:

  • The Sabres put that Amerks on notice that a suit could be filed to collect $27,000 in player affiliation fee’s they’re owed by the Amerks, a claim that an attorney for Donner says was simply a disagreement and that Donner put a check in the mail the same day.
  • Larry Quinn told Latona that “the Sabres are through with the Rochester Americans. They (the Sabres) made a deal with another team, and they are out of there. … They finally said, ‘Enough is enough.'”
  • Steve Donner says that he has actually been exploring options with other possible parent teams and would himself consider ending the Amerks’ affiliation with Buffalo. Donner claims that Latona is almost irrationally dead-set on keeping the Sabres as a parent team.
  • Steve Donner and co-owner and co-defendant Walter Turek said that they have found new local third party investors interested in the team.

November 17, 2007 –

Source: 13 WHAM News Rochester, NY

The City of Rochester announces that they will not loan the Rochester Americans any more money, or allow them to play at Blue Cross Arena beyond the 2007-2008 season if the team doesn’t get on solid financial footing.

That announcement was based off of an audit agreed upon by the Amerks in exchange for the loan of $100,000 announced on May 10, 2007.

The audit which the city will not release claims that the Rochester Americans co-mingle finances between its sister teams and that managers self deal. Steve Donner said that the audit was based on “old numbers.” Another thing that Steve Donner said was that he’s never hidden the fact the team is in trouble, but denies any mismanagement.

November 28, 2007 –

Source: Democrat and Chronicle / 2nd article in the Democrat and Chronicle

Buffalo Sabres owner Tom Golisano says divorce very likely will be the unavoidable resolution for the once-perfect, but now-rocky, marriage between his NHL team and the Rochester Americans.

He said preserving the player development partnership that has existed between the teams for 29 years no longer seems possible.

“I think it may be too late,” Golisano said Tuesday afternoon after his speech to the Rochester branch of the American Marketing Association at the Riverside Convention Center.

The Sabres have told Rochester city officials they would be willing to buy the franchise and also sign a contract to manage the arena. Golisano said no offer to buy the Amerks was ever made because the Sabres never received the team’s financial records.

November 28, 2007 –

Source: News 10 NBC WHEC Rochester, NY

“Having Tom’s presence in the Amerks would have been a great thing for the city of Rochester and it doesn’t look like it’s going to work out,” said Quinn. “I think that ship has sailed.”“The city’s interest here is to have a stable, successful, well run team in the arena. That’s what we want and to the extent that the Sabres relationship fostered that, we think it’s a shame if it’s lost,” said Tom Richards who is a City lawyer.The city says before it signs a new arena lease with the Amerks the team needs to be sold or the management of its finances needs to change. The arena lease is up at the end of the season as well.

November 29, 2007 –

Source: News 10 NBC WHEC Rochester, NY

The letters previously mentioned that were sent by Larry Quinn to the Amerks on January 5, 2007 and April 6, 2007 were tracked down by News 10 NBC in Rochester, NY. Up until this point it had just been speculation and rumors that the Sabres did offer to begin talking to the Amerks about both long term affiliation as well as interest in purchasing the Rochester Americans.“You have two organizations whose business interests do not align properly at the moment,” Donner said.“It takes two to tango and that hasn’t happened,” Sabres owner Tom Golisano said.“We have a solid investment offer on the table worth millions of dollars that would clear up any questions about our finances,” Donner said. “The Rochester Americans are going to be fine. We’re going to be here. There’s absolutely no question about that.”

November 29, 2007 –

Source: Democrat and Chronicle American Hockey League President Dave Andrews says his league will continue to operate in the city of Rochester beyond the 2007-2008 season.

December 1, 2007 –

“We’ve encouraged them to put an offer in and we’ve actually told them the range it would take to put an offer in that we would accept,” Steve Donner is quoted as saying on the Soccer Sam radio show on Hot Talk 1280, WHTK in Rochester, NY.

Two other quotes of interest from Steve Donner:

  • “If they were open to put an offer better on the table than we have now, sure we’d have to listen.”
  • “I think you’re right that the ship has sailed because they were never really interested in buying or if they were they were looking to pick it up at a significant discount or for free.”

Download the archive of the show. (mp3)  Soccer Sam is a weekly radio show on Hot Talk 1280, WHTK in Rochester, NY.

December 3, 2007 –

Source: Democrat and Chronicle / article 2 Democrat and Chronicle

A few items to be pointed out:

  • Florida assistant general manager Randy Sexton said on Monday that as long as details and conditions of a new long-term affiliation can be ironed out, then “Rochester is our preference. We’re at the point as an organization where we can field a full, competitive AHL team,” Sexton said by telephone. “There are some certain things that need to come together, but we like Rochester.”
  • Sexton also noted that, “It’s common knowledge in NHL circles that the Sabres are headed to Portland, Maine (home of the Portland Pirates).”
  • Amerks president Steve Donner believes Florida will be an ideal parent team. Donner has been opposed to the dual affiliation, and has never agreed with Buffalo’s desire for a development-only working agreement in Rochester.
  • The Panthers are well aware of the Amerks’ $1.8 million in debt, plus the $500,000 loan that the AHL team still must repay to the city of Rochester. Sexton said Donner has been “forthcoming with disclosing things that are happening. Nothing that is happening has caught us by surprise.”
  • Donner said the Panthers are aware that quality veterans, even only three or four players, are essential to development, on and off the ice. Those players provide leadership in the AHL but are also able to fill injury gaps for the NHL team.
  • Quinn said the affiliation contract provided Rochester a chance to sign its own veterans, even those commanding a $200,000 AHL salary. Buffalo is charging only $18,000 per player, about half the normal rate. Florida’s price is about the same.”So if Rochester is paying $400,000 for their affiliation and the going rate is $800,000, then Rochester could have had two of those (veteran) guys,” Quinn said. “You got a break from the two NHL teams, sign some veterans.”
  • Quinn said a new agreement for the Sabres to be the sole parent team was finalized with Donner’s minority partner, Randall Latona, in the spring. “It was never signed by them,” Quinn said. “We really tried hard to fix things in Rochester.”
  • “We had numerous verbal discussions and there was never any common ground on anything remotely close to a number,” Donner said. “We encouraged them numerous times to put an offer in at whatever level they felt was appropriate. They never did.”

December 4, 2007 –

Source: Portland Press Herald

The Portland Pirates deny a rumor that the Buffalo Sabres will replace the Anaheim Ducks as the NHL affiliate of the team. The Ducks have said that the geography of being so far away has made it difficult to move players between teams, but they have no intention of changing affiliations.

December 5, 2007 –

Source: The Buffalo News

“That’s over,” Quinn said. “We’re going to go elsewhere.”

The Buffalo Sabres are ending their affiliation with the Rochester Americans after this season, Sabres Managing Partner Larry Quinn told The Buffalo News today.

And that’s where we are at right now. We’ll write more later in regards to speculation and further insight, but for now we just wanted to provide the facts that have been reported.

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3 Comments on “The Facts Regarding The Finances and Affiliations”

  1. Kevin Wright says:

    It’s Glens Falls, NY not Glenn Falls

  2. Keith Wozniak says:

    Thanks for the correction!

  3. Todd says:

    Now they cant even pay for hotel rooms(link above)? What the hell is that guy doing with all the teams money? They owe an office supply company over $30k, and haven’t paid their league or partnership fees to the Sabres or the Panthers.