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Another day anther rehash in the FreeP by Sinclair: Crocus deal shows mayor's bad side

His opinion is that Sam "is playing us for fools." Gordon rehashes most of the above and points out the first of my two issues above. A big difference of (legal?) opinion rests on whether there was a loan or "investment." The rest is presenting a "ping-pong" of "reversals" by Sam.

The appearance may be that but, as in the case of "profitable, but in debt" it may be only that. Yes they made money --and-- yes they have debt (like stadium payments); the question there is how much impact does that debt actually impact the annual expenses. It's confusing and maybe an accountant can/will clear this up.

The issue he doesn't raise is a possible third issue: Was there any misuse of company funds that could be brought in civil suit? That is about the only place the sideshow of expenses from the divorce proceedings have any impact. On that count it may be up to the receiver to decide whether if there's enough of a case to try getting some sort of compensation and whether its worth pursuing. I don't know the legal issues, especially in Canadian law, but that's about the only way the Crocus investors will get anything.

The rest is more bad PR and hype.

Are the Goldeyes a privately held company?

And the circus show continues through The Canadian Press (as referenced by BPD's top story): Business lawsuit, divorce create legal and political woes for Winnipeg mayor

In it there are at least specific quotes from Sam on the subjects above.

First as to your question:

The team's financial situation remains unclear. As a privately owned club, they are not required to issue public financial statements. Katz said the team is still paying a mortgage on its ballpark.

And Sam's the majority shareholder with (supposedly) 65% of the shares. As for the salaries and nannies.

"In the business world, it's not uncommon for your family to perform some services and receive a salary," he said.

"That happens just about everywhere."

Katz adds that any personal expenses paid by the club were repaid through deductions from his salary or a shareholders' loan on his behalf.

About the only thing new (after all the rehash) is any thoughts about the 2010 mayoral race:

Katz has not decided whether he will seek re-election in 2010, but a political analyst said the controversy may cost him.

"It's got to pass the smell test, and some of these things just don't smell right," said Paul Thomas, a political science professor at the University of Manitoba.

"For the average citizen, it will be about putting (his) wife on the payroll, about nannies' salaries and so on."

Of course to overcome this he'll have to get the citizens of Winnipeg have to understand that how he runs his business(es) and government aren't one and the same. It's not as if he put Bailie on the city's payroll. Unfortunately the circus has become heated with Sam referring to one talk radio program "as a two-hour drive-by shooting."

BPD's focus is on the value of the franchise claiming "if he were to put the Goldeyes up for sale tomorrow at $4 million -- more than he claims the team is worth -- he'd have potential buyers lined up around the block." Certainly the Goldeyes are "golden" at the turnstile, but it's been very difficult for anyone to sell indy franchises for "top dollar" (even Canadian ones). I'm sure investors will show up but given the very issues raised by the Crocus suggest some may be put off by the lack of liquidity or Sam's management raised in the press --because I'm certain he would not sell off the entire team.

On the other hand, if a third party sets a "fair market" of the team that was substantially higher than Sam's value, this would only make things worse (though they might truly line up around the block to flip the Goldeyes if not simply to benefit from its profitability). That might happen if the receiver and/or the courts try to recover the fund's investment --regardless of whether they sell or not.

The other point, as I've already suggested, is the nature of the later "investments" in the Goldeyes: loan or equity?

And I'm well aware of the miserable exchange rate --and that you can no longer get refunds on your GST as you used to.

It makes my point all the more significant since the Goldeyes would be sold in loonies not buck --adding an unexpected additional cost for any US investors.