Tuesday, November 2
Deal faces Nov. 10 deadline
 
Associated Press

  DENVER -- Donald Sturm's $461 million purchase of the Denver Nuggets, Colorado Avalanche and the Pepsi Center has hit a roadblock because the billionaire and city officials cannot reach agreement over what would happen to the teams in the event of Sturm's death.

At issue is the city's insistence that the Nuggets and Avalanche play in the arena for the next 25 years, no matter who owns the teams.

Saying his mandate is to protect the interests of taxpayers, Mayor Wellington Webb on Tuesday said Sturm's age is a complicating factor. Sturm, a major telecommunications investor who also owns the Bank of Cherry Creek, will turn 68 in January.

"If you accept the premise that no one is immortal," Webb said, "at some time Mr. Sturm won't be with us. In the event of Mr. Sturm's passing, we want a guarantee that the team will be here for 25 years.

"Because a probate judge has wide latitude to decide how a guarantee like this will be handled in settling an estate, there is considerable uncertainty that the 25-year commitment will continue to have appropriate backing."

At a press conference, Webb said the city, which has been negotiating a transfer agreement with Sturm since August, has offered Sturm and his lawyers several "mechanisms" to solve the problem without impairing Sturm's financial dealings or estate planning.

"After lengthy exploration of these possibilities, Mr. Sturm has currently withdrawn all of them from consideration," Webb said.

Tom Ragonetti, an attorney working with the city on the issue, said the proposals have included making certain will provisions and creating a trust for Sturm's beneficiaries.

On Monday, however, Sturm's attorneys informed the city that he "didn't want to offer any more guarantees than Ascent had offered," Ragonetti said.

Webb explained it was different dealing with a major corporation such as Ascent Entertainment Group Inc., which is selling the sports assets to Sturm, compared to dealing with an individual.

"What is at issue is an individual, not just his age," Webb said. "Don Sturm could be 30 years old and his plane could go down. The city wants a legal guarantee that the teams will be here in 25 years, just like we had with Ascent, a corporation with perpetual existence."

Webb said the stalemate "leaves the city with a difficult choice: either accept Mr. Sturm's guarantee with the uncertainty of probate or reject him as the new owner -- a financially stronger owner than Ascent -- and try to keep Ascent in place when Ascent has clearly made plans to move beyond the teams and the privately funded Pepsi Center.

"This is a choice I hope I don't have to make. Mr. Sturm has acknowledged to me that probate is an issue and he is committed to work on it. I trust his word and hope we can reach a mutually satisfactory resolution. This guarantee is not some willy-nilly notion that we aren't serious about."

Liz Orr, special projects director for the city, said all other issues associated with the transfer agreement have been resolved with the exception of what happens to Sturm's guarantee upon his death.

"It doesn't take a rocket scientist to understand our concern," Webb said. "None of us can predict what might happen when someone dies, what his heirs might do, who the new owner might be. I feel good about having Mr. Sturm's word on it, but I would feel better if we have it on paper. What we're asking for is not unreasonable. The next move is up to Mr. Sturm."

Paul Jacobs, an attorney for Sturm, said his client is not trying to lessen the city's claim to the teams. "He has no desire to move the teams," Jacobs said. "That's not even an issue."

On Monday, Ascent announced it had missed an Oct. 31 deadline to close the deal and had renegotiated an extension with Sturm to Nov. 10. Under terms of the extension, either Sturm or Ascent could walk away from the deal if it is not completed by Nov. 10.

Ascent has a lot to lose if the Sturm deal falls through. Liberty Media Corp. has offered to buy Ascent for $513 million, contingent on the sports assets being sold first.