Post by WpgJets2008 on Jan 22, 2010 17:28:31 GMT -5
Lightning leftovers
David Shoalts The Globe and Mail Friday, January 22, 2010
www.theglobeandmail.com/blogs/globe-on-hockey/lightning-leftovers/article1440741/
Leftovers from the visit to the NHL’s latest crisis, the Tampa Bay Lightning:
At this point, it is difficult to judge how serious the financial problems are for the Lightning. The NHL and Lightning co-owner Oren Koules insist everything is under control even if the team has needed help from the league and its television broadcaster to make payroll.
They are right, up to a point. The current ownership survives at the pleasure of Palace Sports and Entertainment, which holds one big loan and guaranteed another, to Galatioto Sports Partners, for a total north of $100-million. Now that Palace Sports boss Karen Davidson has let it be known she would like to sell her main sports property, the Detroit Pistons of the NBA, it only makes sense that she would also like to get the Lightning off her books.
So far, NHL commish Gary Bettman has managed to convince Davidson to hang in there while he and Koules and even Bolts co-owner len Barrie look for new investors or a new majority owner. From talking to various sources over the last few days, my best guess is they had better find someone by the summer at the very latest. The league would like to do it sooner but all they have now are a few tire-kickers looking for a big discount.
Oh, and a word about the advances the Lightning is getting from the NHL on its portion of revenue-sharing from this season. This is not unusual for the league’s needier teams. The problems arise when those advances fail to cover the losses and the team needs direct loans as well, a la the Phoenix Coyotes.
When Rod Bryden owned the Ottawa Senators, the team was always into the league for advances on its shared revenues. There was no revenue sharing in the 1990s but teams could get advances on television and merchandise money and the like. Bryden once told me, when I called some years ago to inquire about a $14-million tab the Sens had with the NHL, that it was just like a line of credit. Once the broadcast money was divvied up, he said, the Sens would pay down their bill.
The problem is that most of these teams eventually crash and burn unless a sugar daddy is found. The Sens had to be rescued from bankruptcy by Eugene Melnyk.
Koules has two problems in trying to keep the Lightning going. One is that his rebuilding efforts on the ice have yet to bear fruit. He and Barrie knew going into their 2008 purchase of the team that they did not have the money for the long haul but their gamble was that the team could be turned around quickly so that ticket sales would jump (the local market had proved it would support a winner). That didn’t work, of course, and the crowd for the Leaf game the other night – announced at 13,000 and change and more likely around 10,500 – demonstrated the problem.
As one of the local reporters told me, fans in Florida all come from somewhere else so they do not have a strong attachment to the team. It has to be a winner or at the very least entertaining for them to buy a ticket.
The second problem for Koules is the lingering recession. Florida was hit hard because much of its economy is based on real estate, in which people have a second home down south, and that has yet to bounce back. The unemployment rate was announced on Thursday as 12.4 per cent in the Tampa area.
That is a disheartening number when your survival depends on selling tickets.
Chris
David Shoalts The Globe and Mail Friday, January 22, 2010
www.theglobeandmail.com/blogs/globe-on-hockey/lightning-leftovers/article1440741/
Leftovers from the visit to the NHL’s latest crisis, the Tampa Bay Lightning:
At this point, it is difficult to judge how serious the financial problems are for the Lightning. The NHL and Lightning co-owner Oren Koules insist everything is under control even if the team has needed help from the league and its television broadcaster to make payroll.
They are right, up to a point. The current ownership survives at the pleasure of Palace Sports and Entertainment, which holds one big loan and guaranteed another, to Galatioto Sports Partners, for a total north of $100-million. Now that Palace Sports boss Karen Davidson has let it be known she would like to sell her main sports property, the Detroit Pistons of the NBA, it only makes sense that she would also like to get the Lightning off her books.
So far, NHL commish Gary Bettman has managed to convince Davidson to hang in there while he and Koules and even Bolts co-owner len Barrie look for new investors or a new majority owner. From talking to various sources over the last few days, my best guess is they had better find someone by the summer at the very latest. The league would like to do it sooner but all they have now are a few tire-kickers looking for a big discount.
Oh, and a word about the advances the Lightning is getting from the NHL on its portion of revenue-sharing from this season. This is not unusual for the league’s needier teams. The problems arise when those advances fail to cover the losses and the team needs direct loans as well, a la the Phoenix Coyotes.
When Rod Bryden owned the Ottawa Senators, the team was always into the league for advances on its shared revenues. There was no revenue sharing in the 1990s but teams could get advances on television and merchandise money and the like. Bryden once told me, when I called some years ago to inquire about a $14-million tab the Sens had with the NHL, that it was just like a line of credit. Once the broadcast money was divvied up, he said, the Sens would pay down their bill.
The problem is that most of these teams eventually crash and burn unless a sugar daddy is found. The Sens had to be rescued from bankruptcy by Eugene Melnyk.
Koules has two problems in trying to keep the Lightning going. One is that his rebuilding efforts on the ice have yet to bear fruit. He and Barrie knew going into their 2008 purchase of the team that they did not have the money for the long haul but their gamble was that the team could be turned around quickly so that ticket sales would jump (the local market had proved it would support a winner). That didn’t work, of course, and the crowd for the Leaf game the other night – announced at 13,000 and change and more likely around 10,500 – demonstrated the problem.
As one of the local reporters told me, fans in Florida all come from somewhere else so they do not have a strong attachment to the team. It has to be a winner or at the very least entertaining for them to buy a ticket.
The second problem for Koules is the lingering recession. Florida was hit hard because much of its economy is based on real estate, in which people have a second home down south, and that has yet to bounce back. The unemployment rate was announced on Thursday as 12.4 per cent in the Tampa area.
That is a disheartening number when your survival depends on selling tickets.
Chris