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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. *)
Ascent Entertainment Group, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
043628106
(CUSIP Number)
David Fink Benjamin L. Douglas, Esq.
Matador Capital Management Corporation Shartsis, Friese & Ginsburg LLP
200 1st Ave. North, Suite 206 One Maritime Plaza, 18th Floor
St. Petersburg, FL 33701 San Francisco, CA 94111
(813) 898-9300 (415) 421-6500
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
June 1, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box /X/.
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
Potential persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays
a currently valid OMB control number.
SEC 1746 (10-97)
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SCHEDULE 13D
CUSIP No. 043628106 Page 2 of 11 Pages
- -------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Matador Capital Management Corporation
- ---------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- ---------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- ---------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
- ---------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ---------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY --------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 1,658,900
REPORTING --------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,658,900
- ---------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,658,900
- ---------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- ---------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.6%
- ---------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO and IA
- ---------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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SCHEDULE 13D
CUSIP No. 043628106 Page 3 of 11 Pages
- ---------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Jeffrey A. Berg
- ---------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
- ---------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- ---------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) / /
- ---------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- ---------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY --------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 1,658,900
REPORTING --------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,658,900
- ---------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,658,900
- ---------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- ---------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.6%
- ---------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- ---------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
CUSIP No. 043628106 Page 4 of 11 Pages
ITEM 1. SECURITY AND ISSUER.
This statement relates to the Common Stock (the "Stock") of Ascent
Entertainment Group, Inc. ("Ascent"). The principal executive office of
Ascent is located at 1225 Seventeenth Street, Suite 1800, Denver, CA 80202.
ITEM 2. IDENTITY AND BACKGROUND.
The persons filing this statement and the persons enumerated in Instruction
C of Schedule 13D and, where applicable, their respective places of
organization, general partners, directors, executive officers and
controlling persons, and the information regarding them, are as follows:
(a) Matador Capital Management Corporation, a Delaware corporation
("MCMC"); Jeffrey A. Berg ("Berg"); David R. Fink ("Fink"); William W.
Wright ("Wright"); and Steven A. Kohl ("Kohl").
(b) The business address of MCMC, Berg, Fink, Wright and Kohl is 200
First Ave. North, Suite 203, St. Petersburg, FL 33701.
(c) MCMC is a registered investment adviser. Berg is the President,
sole director and controlling shareholder of MCMC. Fink is the Chief
Operating Officer of MCMC. Wright is the Treasurer of MCMC. Kohl is the
Vice President of MCMC.
(d) During the last five years, none of such persons has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, none of such persons was a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
(f) Berg, Fink, Wright and Kohl are citizens of the United States of
America.
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SCHEDULE 13D
CUSIP No. 043628106 Page 5 of 11 Pages
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The source and amount of funds used in purchasing the Stock were as
follows:
Purchaser Source of Funds Amount
MCMC Funds Under Management $16,596,546
ITEM 4. PURPOSE OF TRANSACTION.
On May 20, 1999, MCMC sent a letter to each of the members of Ascent's
Board of Directors. That letter, which is attached as Exhibit A hereto and
incorporated by reference herein, expressed MCMC's disappointment regarding
Ascent's announcement of its intent to dispose of its sports properties:
the Denver Nuggets, the Colorado Avalanche and the Pepsi Center
(collectively, the "Properties"). Among other things, the letter
highlighted the following issues:
1. Ascent may not have conducted a public "auction" aimed at identifying
as many potential purchasers of the Properties as possible and creating a
spirited, competitive environment for the sale of the Properties;
2. The dramatic change in the company resulting from the sale may require
shareholder approval;
3. The sales price appears to be as much as $75 - $150 million too low and
does not appear to acknowledge the increased revenues resulting from the
ownership of the Pepsi Center;
4. The fact that Ascent's CEO has accepted a senior role with the
purchaser of the properties raises issues of potential conflict; and
5. The fact that a firm for which a director of Ascent serves as Managing
Director was hired to broker the deal raises issues of potential conflict.
MCMC believes that were the Board to conduct a true auction of the
Properties, many parties would surface and likely make substantially higher
bids.
As of the date of this filing, MCMC has received no response, either verbal
or in writing, from any member of the Board, the management of Ascent or
any of their advisors/representatives. MCMC believes that this lack of
communication calls into question whether the Board intends to carry out
its fiduciary duty to the shareholders. Therefore, MCMC intends to
formally request that the Board take all the steps necessary to perform its
fiduciary duty to the shareholders and engage in a transaction that
maximizes shareholder value.
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SCHEDULE 13D
CUSIP No. 043628106 Page 6 of 11 Pages
MCMC has had discussions with the senior management of Ascent in the past
and may have discussions in the future regarding various operational and
financial aspects of Ascent's business. MCMC may solicit indications of
interest from potential purchasers of the Properties and present those
indications to Ascent's Board. MCMC may retain one or more investment
banking firm to assist it in exploring ways of maximizing long-term
shareholder value. MCMC has had and may in the future have discussions
with other shareholders regarding various ways of maximizing long-term
shareholder value.
MCMC intents to review continuously its investment in the Stock and may in
the future change its present course of action.
MCMC may determine to acquire additional Stock or to dispose of all or a
portion of the Stock which it now owns on behalf of its advisory clients.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The beneficial ownership of the Stock of the persons named in Item 2 of
this statement is reflected on the cover pages of this statement.
The persons filing this statement have not effected any transactions in the
Stock since April 1, 1999.
ITEM. 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Pursuant to investment management agreements, MCMC is authorized, among
other things, to invest funds of its investment advisory clients in
securities, and to vote and dispose of those securities. Such investment
management agreements may be terminated by either party on notice as
provided in such agreements. The investment management agreements provide
for fees payable to MCMC based on assets under management and realized and
unrealized gains.
MCMC is also a member of RJ Matador, L.L.C., a Delaware limited liability
company and registered investment adviser. RJ Matador, L.L.C. and MCMC are
the general partners of an investment limited partnership, whose limited
partnership agreement provides to MCMC and RJ Matador, L.L.C., as general
partners, the authority, among other things, to invest the funds of the
partnership in Stock and to vote and dispose of Stock. Pursuant to such
limited partnership agreement, the general partners are entitled to
allocations based on assets under management and realized and unrealized
gains.
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SCHEDULE 13D
CUSIP No. 043628106 Page 7 of 11 Pages
Berg is also the President of Everglades Capital Corporation
("Everglades"). Everglades is the general partner of Matador Capital
Management, L.P. ("MCM"), a Delaware limited partnership that is the
general partner of several investment limited partnerships. Pursuant to
those partnerships' agreements of limited partnership, MCM has the
authority to invest the partnerships' funds in Stock and to vote and
dispose of Stock and is entitled to allocations based on assets under
management and realized and unrealized gains. MCM has delegated its
investment management responsibilities with respect to those partnerships
to MCMC.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A - Letter from Berg to Mr. Charlie Lyons dated May 20, 1999.
SIGNATURES
After reasonable inquiry and to the best of my knowledge, I certify
that the information set forth in this statement is true, complete and
correct.
DATED: June 1, 1999
MATADOR CAPITAL MANAGEMENT CORP. JEFFREY A. BERG
By: /s/ David Fink By: /s/ David Fink
David Fink David Fink
Chief Operating Officer Attorney-in-Fact
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SCHEDULE 13D
CUSIP No. 043628106 Page 8 of 11 Pages
Exhibit A
May 20, 1999
Mr. Charlie Lyons
Chairman of the Board
Ascent Entertainment Group, Inc.
One Tabor Center
1225 17th Street, Suite 1800
Denver, CO 80202
Mr. Lyons:
Matador Capital Management ("Matador"), through its various clients,
controls nearly 1.7 million shares, or approximately 5.7%, of Ascent
Entertainment Group, Inc. (OTC - GOAL). As a large shareholder, we are
writing to express our concern regarding the recently announced planned
disposition of Ascent Entertainment's sports properties: the Denver
Nuggets, the Colorado Avalanche and the Pepsi Center (collectively, the
"Properties"). We are also writing to request that you reopen the process
and invite proposals from other potential bidders and that you seek
shareholder approval prior to consummating any transaction.
Our initial excitement upon hearing the news regarding the potential
disposition of the properties immediately disappeared when we learned the
details of the transaction. On the face of it, the process undertaken by
Ascent to dispose of the sports properties appears flawed:
There appears to have been no true, competitive "auction" process,
The dramatic change in the business of the company resulting from this
transaction requires shareholder approval of the transaction,
The sales price of $400 million appears to be between $75 and $150 million
too low based on private market transactions coupled with the incremental
revenues for the Nuggets and the Avalanche resulting from the ownership of
the Pepsi Center,
The CEO's role as the company's chief negotiator through a portion of the
process and then as a key member of the partnership purchasing the
properties raises issues regarding potential conflicts and brings into
question discussions, or the lack thereof, the company had with other
potential bidders, and
The fact that a Director's firm was retained to broker the deal, resulting
in compensation to that Director, raises questions of potential conflict.
<PAGE>
SCHEDULE 13D
CUSIP No. 043628106 Page 9 of 11 Pages
Based on our knowledge of the process and the transaction value obtained,
the information Matador has obtained from the company, publicly released
comments, and information from the "trade" that we believe to be reliable,
we have concerns that the best interests of the shareholders are not being
met with the transaction as currently contemplated.
Since the original announcement, we have had the opportunity to consult
with a number of professionals involved in the world of professional
sports. Conversations with these professionals revealed several
interesting items. First, to a person, they apparently were not aware of
the kind of auction process that would truly create competition for the
properties. In fact, during our conversations, they admitted their
surprise that an agreement had been reached regarding the disposition of
the properties without an auction process. Perhaps as important, following
an announcement of the disposition, they informed us that they had been
contacted by other parties who indicated their potential interest in
bidding for the properties at prices "substantially higher" than the
current offer on the table. Given the apparent interest level of these
parties, it is difficult to believe that a true auction process was
conducted. Historically, other sports franchises have publicly announced
their intentions to sell their properties, as did the Cleveland Indians
this past week. And why not, given the interest that such a sale would
likely prompt from potential buyers from seemingly unlikely places? Why
has Ascent acted any differently?
In addition to an apparently flawed process, it appears, based upon a
litany of private market transactions, that fair value (much less "full
value") was not achieved. Whether it is the benchmark of 2.0x - 2.5x
expected revenues for NHL franchise transactions, 3.0x - 3.5x expected
revenues for NBA franchise transactions or benchmarks such as the Comcast
purchase of the Philadelphia Flyers, the Seventy Sixers and the attendant
stadiums in 1995 for $530 million, this transaction simply does not seem to
measure up. In fact, when one considers the incremental revenues from (1)
a renegotiated NBA contract, (2) a renegotiated NHL contract, (3) leases
for 93 luxury suites (most of which are for a period of ten years), (4) an
estimated 1,500 - 1,850 club seats per season at $5,000 to $8,000 per seat,
(5) an estimated 2,000 additional arena seats per season (at $56.78 per
seat for an Avalanche game and $30.51 per seat for a Nuggets game), (6)
founding partners agreements for Coors, U.S. West and others to be
announced, (7) the naming arrangement for the arena and (8) the
renegotiated Ogden concessions contract (which, by our estimation could, in
aggregate, add more than $40 million in annual revenues for the
franchises), it becomes apparent that this transaction, using the valuation
parameters outlined above, has transferred all of the incremental value
from the creation of the arena to the purchaser. The discount is even more
glaring in light of the recent labor agreement reached between NBA teams
and the labor union, an agreement hailed as the most successful ever
reached in modern sports, as well as the strong possibility of a future
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SCHEDULE 13D
CUSIP No. 043628106 Page 10 of 11 Pages
WNBA franchise being awarded to Denver, the elimination of the McNichols
arena as a competitive entertainment venue and the elimination of seat
taxes and sales taxes to the city (including the ability to use sales tax
revenue as a credit against its obligation to the city for breaking the
McNichols lease).
Moreover, the process appears to have been wrought with potential
conflicts. In addition to letting Charlie Lyons partner with the buyer of
the properties, the Board has further compounded the perception of conflict
by allowing Paul Gould to serve on the Special Committee. Allen & Co., as
the advisor to Ascent Entertainment on this transaction, stands to collect
a large fee for the successful consummation of this deal. Putting Mr.
Gould, an Allen & Co. representative, on the Special Committee could be
perceived as putting the proverbial fox in charge of the hen house.
The sale of the properties has profound implications for Ascent
Entertainment and its shareholders. The sale will mark a radical
transformation of Ascent Entertainment from a diversified entertainment
company to simply a majority owner of On Command Video (OTC - ONCO). Thus,
the nature of Ascent Entertainment's business mix appears to be undergoing
a dramatic change, a phenomenon that calls for shareholder approval under
Section 271 of the Delaware General Corporation Law.
Given the significant nature of the disposition of the properties and its
impact on Ascent Entertainment, it is vitally important that the Board
proceed with care and ensure that shareholder value is being maximized. As
indicated above, we have reason to believe that there are other potential
bidders for the properties that are willing to submit bids at levels higher
than the offer currently on the table. We would ask the Board to reopen
the bidding process and conduct a true auction, one that has the attention
and awareness of the public and the professionals in this industry.
Moreover, prior to accepting an offer, we would submit to the Board that
this matter bears enough import as to require the approval of the
shareholders. As such, we would ask that the shareholders be given the
opportunity to vote on any offer deemed acceptable by the Board.
As the company continues the restructuring process, which will most likely
include the disposition of On Command or simplification of the Ascent
Entertainment/On Command corporate structure, Matador and its advisors will
be paying extremely close attention to the process that is undertaken and
the eventual outcome to ensure that our interests as the shareholders of
the company are being met. We clearly see both the value and the rationale
for a transaction that potentially includes AT&T, TCI, Liberty Media or
@Home. Nonetheless, given the representation on Ascent's Board of
Directors by individuals with close ties to these companies, we will be
especially sensitive to a transaction involving any of these entities that
does not maximize shareholder value. We trust that the interests of the
Board are aligned with our interests as shareholders and that the Board
will endeavor to ensure that any actions undertaken by the company are in
the best interests of the shareholders.
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SCHEDULE 13D
CUSIP No. 043628106 Page 11 of 11 Pages
We would appreciate a response from the Board on these matters at the
earliest opportunity.
Sincerely,
/s/ Jeffrey A. Berg
Jeffrey A. Berg
President
BLD/4267/002/1047213
