It has been more than three months since TowerBrook Capital Partners announced it would divest its investment in the Blues, a major move considering the private-equity firm holds as much as a 75 percent stake in the club.

TowerBrook has indicated it will postpone divesting until Blues owner Dave Checketts can find a replacement, allowing the club some immediate security. But as the team prepares for next month's training camp, its long-term financial future seems uncertain until a new investor can be found.

The search continues in earnest, albeit slowly in an economy still seeking financial stability. Those close to the situation have described this stage as "kicking tires" and say that an agreement is far from imminent.

To date, Checketts' company, SCP Worldwide, has been mum on one of the largest challenges it has faced since taking over the Blues in 2006. But recently, Mike McCarthy, an SCP partner and vice chairman of the Blues, addressed the situation in the ownership's first comments about the search since May.

"You shouldn't be surprised to hear little publicly from us during this process," McCarthy said. "As anybody that followed the recent Rams process or our acquisition of the Blues can see ... these can go on for long periods of time.

"That said, we're pleased with where we are. We have no specific deadlines that we're chasing. We understandably have had interesting people show specific, sincere interest and we're in the midst of that process right now."

SCP has hired Citi Private Bank's sports finance and advisory team to lead the search. Citi's website says it has "$1 billion in commitments to sports-related financing" and since the mid-1990s "has banked approximately 25 percent of all sports teams in the four major professional leagues in the U.S."

It was no surprise to the Blues when TowerBrook announced its decision to divest in May. Ownership knew that TowerBrook had a four- or five-year window on its investment, and June completed four years.

But now, with the position in which the Blues find themselves — seeking a new investor during a critical period of the rebuilding process — some have questioned the decision to allow a private-equity firm with a limited horizon to finance such a large stake in the team.

A long and successful business history between SCP and TowerBrook was the reason they joined forces to purchase the Blues in 2006. TowerBrook was a spinoff of a company named Soros, and Soros and SCP founded the airline JetBlue together. They also teamed up to create College Sports TV, which was sold to CBS Sports.

While it hasn't been common in NHL history for investment groups to buy into teams, a league executive told the Post-Dispatch that it is becoming more typical these days. An unofficial look at the league's ownership groups showed that at least one-third of the 30 teams operate with finances from investment firms.

"It's a very common arrangement," said Kevin Short, CEO of Clayton Capital Partners, an investment banking firm. "These private-equity firms are very clear up front, saying they're going to get out in four or five years. They pretty much dictate how the deal is going to work, but it's very common.

"So I don't think Mr. Checketts got a surprise phone call. This conversation was probably on hold, and now that the capital markets are calming, they reopened the conversation. To (TowerBrook's) credit, they've been very up front with Checketts and have said they'll go about this in an orderly way."

A source close to TowerBrook told the Post-Dispatch in May that the company was "under no pressure to sell. They're not in any rush."

While that may still be true, there is a key tax hike looming in January that could put more pressure on Towerbrook to have the deal done. The capital gains tax is increasing from 15 percent to 20 percent in 2011, meaning the firm could save on tax dollars by selling its chunk of the team before the end of the year.

TowerBrook has historically referred questions to SCP, which neither confirmed nor denied that the tax increase played a role in TowerBrook's decision.

"The capital gains tax (going up) is a very common catalyst for selling," Short said. "Buyers may not care about tax purposes, but clearly the sellers do. The dilemma you have, you've got to get a deal done soon. Once we get into December, and the deadline is looming, there is pressure on the seller to get the deal done."

How that will affect leverage in potential negotiations, or what it will mean for the state of the Blues if no buyer has been found by December, remains to be seen.

In 2006, when SCP purchased the Blues and Scottrade Center for $150 million, Forbes magazine estimated the value of the franchise to be at that same number. Three years later, in 2009, Forbes estimated the Blues' worth to be $176 million, meaning the club has seen a $26 million increase in value. (The magazine's figures for 2010 have yet to be released.)

But while the Blues have built equity, SCP has indicated in the past that it has lost money since purchasing the team. While ownership won't disclose how much, Checketts, who was unavailable to comment for this story, has said that SCP didn't plan to break even until Year 4, which was last season.

The Blues have collected from the NHL's revenue sharing each of the last four years, which means the team has been in the bottom third of the league in overall revenue in that span.

More revenue needed

The NHL has witnessed a continued boost in revenue since the lockout in 2004-05, leading to a salary-cap increase for the fifth straight season. But several reports suggest that much of the boost is from the financial success of the six Canadian clubs.

Canadian teams take in Canadian dollars and make their payroll in U.S. dollars, and last year the Canadian dollar saw a 15 percent increase.

"It's not healthy in the NHL right now," said Jim Lites, former president of the Dallas Stars and now president of the Hicks Sports Marketing Group, which is owned by Stars and Texas Rangers owner Tom Hicks. "I just think it's a tough economic model. We're spending 55-56 percent of our revenue on player payroll, and that makes it a tough go, particularly in the small- and medium-size U.S. markets.

"We're depending so much on the ticket and arena revenue to drive the business. Do the math ... it's really difficult. The business is different in Calgary and Montreal, let alone Toronto, than in St. Louis and Dallas, where we have to chase paid bodies into the building. The economics have to change, and for Dave (Checketts), that's something you have to rely upon."

The Blues, who have recorded sellouts in 64 of their last 82 regular-season home games, are raising ticket prices 10 percent this season to help increase revenue. The increase alone, however, isn't expected to make the team profitable in 2010-11. The Blues' business model is built on turning a profit only if the club makes the playoffs, and under Checketts, the team has done so only once in four seasons.

Checketts in charge?

Even if the Blues do generate interest from an investor, there remains the question of how much control the individual or group would want.

TowerBrook allowed Checketts to be front and center and, along with team management, to be the decision-maker for the franchise. Checketts wants to remain in the same position with any new potential investor.

Outsiders have suggested that could keep away some investors, but others see having Checketts run the team as an attractive chip in the deal. Until an investor is found, though, it's unknown how the ownership will set up.

So how long will the search take and how could it affect the Blues if it drags out?

"It's going to be harder than when they did it four or five years ago," Short said. "I'd be surprised if (locally) is where Checketts gets his money. There are only a half-dozen guys in town that write these kinds of checks and have a history of looking at sports franchises. The money will come from private-equity groups around the country. It's fairly accepted when they won't make money when they're operating, but they'll make a lot of money on the other end."

Checketts obviously has a way of finding investors, evidenced by his group's bid, which ultimately failed, to buy the Rams earlier this year.

Some sources have indicated that the investors who wanted to buy into the NFL don't have the same interest in the NHL; however, another source said Checketts' search for potential Rams investors "hasn't hurt" his Blues search.

Lites, who was involved in a recent failed bid to buy the Stars, believes Checketts will find help.

"There's probably no one more capable than David. ... His track record shows that he's been a very successful guy in different markets and several different sports," Lites said. "If it can get done in St. Louis, David is the type of guy that can get it accomplished."

Effect on team

Until then, the financial future of the Blues remains uncertain. Despite repeated insistence that day-to-day operations aren't affected by the loss of a major investor, some remain skeptical after watching management trim more than $5 million this summer from last year's payroll. And, meanwhile, multiple player agents have said that their dealings with the Blues have been different since TowerBrook's announcement.

The club's ownership denies any effect.

"John Davidson, Doug Armstrong, Dave Checketts and the entire management group feel the team is well-positioned for the future ... not just this year, but next year, too, with the way the team is structured," McCarthy said. "I think J.D. and Doug had a fantastic offseason, including the deal of the summer getting (Jaroslav) Halak and signing key restricted free agents. ... We're younger and poised for terrific things on the ice, and we're all very excited about it. I think the team is being managed smartly."