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Source: Dallas oilman Douglas Miller makes offer to purchase Stars

A new suitor has emerged with an offer to buy the Dallas Stars amid speculation that billionaire Dallas Mavericks owner Mark Cuban could still end up buying the team himself.

THN.com has learned Dallas oilman Douglas Miller has made an offer to purchase the Stars, but there is also speculation Miller could be for Cuban what is known in business circles as a “stalking horse,” someone who establishes the value of a business by making an offer before another party comes in with a more lucrative one.

In any event, Miller’s offer is believed to be for about $110 million cash, but it would likely be publicly announced as somewhere in the $225 million range. That’s because in addition to the purchase price, Miller would assume about $20 million in existing debt, most of which is owed to the NHL for the advancement of television and revenue sharing money to help keep the Stars afloat. Also built into the purchase price would be four years of losses estimated at about $25 million per year.

According to a source with knowledge of such matters, the Stars have lost between $26 million and $28 million over the past 12 months. NHL commissioner Gary Bettman insisted at his All-Star Game news conference in January that the league is not funding the Stars, but multiple sources have confirmed the Stars have been using advances on television and revenue sharing money and have required more than one advance to continue to pay the bills as a new owner is sought to replace Tom Hicks.

Miller is the chairman and CEO of Exco Resources, an oil and gas producer based in Dallas. Late in 2009, Miller made an offer to purchase the company with the intention of taking it private and valued the company at about $4.35 billion.

Whether Miller’s offer is accepted remains to be seen, but there is growing speculation that despite not publicly declaring interest in the Stars, Cuban is waiting in the background to make an offer that will be slightly better than the one received for the team and could ultimately end up owning both the Stars and the Mavericks.

As it currently stands, the Stars and Mavericks split the revenues that come out of American Airlines Arena in a convoluted arrangement. If Cuban were to buy the Stars, all revenues would be coming to the same entity and costs could be saved in terms of marketing and staff if both teams were owned by the same person.

Bettman, meanwhile, would have one fewer ownership headache on his hands because Cuban is well funded and has established an excellent business model with the Mavericks. His brash nature and penchant for speaking out might not mesh well with Bettman’s buttoned-down image, but that would be the least of his worries if he could get the Stars sold to Cuban.

Bettman said during the all-star break that there are a “half-dozen interested parties,” but nobody has until now emerged with a firm offer to buy the team. Calgary billionaire Bill Gallacher, who also owns the Portland Winterhawks of the Western League, pulled out of the bidding last summer. Tom Gagliardi of Vancouver remains interested, but has yet to make an offer.

The NHL originally had set a purchase price of $300 million on the Stars, but the actual selling price of the team will almost certainly be much lower than that.

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