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NHL sets buyout plan
Damian Cristodero, Tampa-St Petersburg Times, August 8 2009
The NHL apparently has decided the Lightning's ownership situation is unsustainable and set up a process in which squabbling co-owners Len Barrie and Oren Koules can buy each other out.
Barrie has the first shot in an exclusive 60-day window that apparently runs out in mid to late September. If Barrie fails, Koules gets his chance.
Purchase price is not the only issue. The parties also must prove they can handle the substantial debt obligations to former owner Palace Sports & Entertainment.
If either Barrie or Koules meets those parameters during his exclusive window, the other must sell. In this way, the league hopes to bring stability to one of its most troubled franchises. How important is that? Let Phil Esposito tell you.
"Very, very, very," said the Lightning founder, who dealt with a Japanese group that forged an unsteady course in the franchise's earliest years.
"I can't emphasize enough how important it is. Then everything falls into place. Good management comes with that. Good players come with that."
What happens if both sides fail?
They might just have to live with each other; or the league might find a buyer; or perhaps Palace Sports will take back control. The former owner financed about $70 million of the $200 million purchase price and loaned OK Hockey another $30 million in operating capital.
No one is commenting; not the league, which declined several requests; not Palace Sports CEO Tom Wilson; not Koules, Barrie or anyone in their entourages, as per a gag order issued by commissioner Gary Bettman.
It is clear, though, the league is forcing a resolution.
The buyout windows are at least the third step in a plan laid out by Bettman at a June 23 meeting at the league's New York offices, where he demanded the owners work out their financial and philosophical differences about how to run the team.
Bettman made sure everyone knew his place. Koules is CEO and governor and, with general manager Brian Lawton, handles much of the day-to-day running of the organization. Lawton, as head of hockey operations, is the point man for all transactions (in other words, no meddling by the owners), and Barrie must be consulted on any transaction of more than $2 million.
The commissioner also established deadlines.
Barrie was ordered to produce a $10 million irrevocable letter of credit by July 17 to establish he could cover his portion of the team's projected losses next season and provide a bit of a cushion. The NHL never confirmed that happened, but deputy commissioner Bill Daly said at the time he was "satisfied where things stand."
Barrie also met an Aug. 1 deadline for repaying a $3 million personal loan from Koules, who covered a cash call last season that Barrie missed.
They were positive steps in creating the stability the owners say they want, and Lawton has had a superb summer as he significantly bolstered the team's blue line, cut payroll and is in the hunt for free agent wing Alex Tanguay.
Still, several aspects of the situation are unknown.
Why was Barrie given first crack at the buyout? How much will the buyouts cost? Will Koules' buyout window be of similar duration?
What is known is unless one or the other comes up with cash or a bank check (quite an assignment in this economy), any new investors will be subject to the league's due diligence and must be approved by 23 of the 30 members of the Board of Governors. The deal also must be approved by Palace Sports.
In other words, the process likely will not be quick.
"I know there's a passion with them," Esposito said of the co-owners.
The question is, does either have the money?
Damian Cristodero can be reached at cristodero@sptimes.com.
Damian Cristodero, Tampa-St Petersburg Times, August 8 2009
The NHL apparently has decided the Lightning's ownership situation is unsustainable and set up a process in which squabbling co-owners Len Barrie and Oren Koules can buy each other out.
Barrie has the first shot in an exclusive 60-day window that apparently runs out in mid to late September. If Barrie fails, Koules gets his chance.
Purchase price is not the only issue. The parties also must prove they can handle the substantial debt obligations to former owner Palace Sports & Entertainment.
If either Barrie or Koules meets those parameters during his exclusive window, the other must sell. In this way, the league hopes to bring stability to one of its most troubled franchises. How important is that? Let Phil Esposito tell you.
"Very, very, very," said the Lightning founder, who dealt with a Japanese group that forged an unsteady course in the franchise's earliest years.
"I can't emphasize enough how important it is. Then everything falls into place. Good management comes with that. Good players come with that."
What happens if both sides fail?
They might just have to live with each other; or the league might find a buyer; or perhaps Palace Sports will take back control. The former owner financed about $70 million of the $200 million purchase price and loaned OK Hockey another $30 million in operating capital.
No one is commenting; not the league, which declined several requests; not Palace Sports CEO Tom Wilson; not Koules, Barrie or anyone in their entourages, as per a gag order issued by commissioner Gary Bettman.
It is clear, though, the league is forcing a resolution.
The buyout windows are at least the third step in a plan laid out by Bettman at a June 23 meeting at the league's New York offices, where he demanded the owners work out their financial and philosophical differences about how to run the team.
Bettman made sure everyone knew his place. Koules is CEO and governor and, with general manager Brian Lawton, handles much of the day-to-day running of the organization. Lawton, as head of hockey operations, is the point man for all transactions (in other words, no meddling by the owners), and Barrie must be consulted on any transaction of more than $2 million.
The commissioner also established deadlines.
Barrie was ordered to produce a $10 million irrevocable letter of credit by July 17 to establish he could cover his portion of the team's projected losses next season and provide a bit of a cushion. The NHL never confirmed that happened, but deputy commissioner Bill Daly said at the time he was "satisfied where things stand."
Barrie also met an Aug. 1 deadline for repaying a $3 million personal loan from Koules, who covered a cash call last season that Barrie missed.
They were positive steps in creating the stability the owners say they want, and Lawton has had a superb summer as he significantly bolstered the team's blue line, cut payroll and is in the hunt for free agent wing Alex Tanguay.
Still, several aspects of the situation are unknown.
Why was Barrie given first crack at the buyout? How much will the buyouts cost? Will Koules' buyout window be of similar duration?
What is known is unless one or the other comes up with cash or a bank check (quite an assignment in this economy), any new investors will be subject to the league's due diligence and must be approved by 23 of the 30 members of the Board of Governors. The deal also must be approved by Palace Sports.
In other words, the process likely will not be quick.
"I know there's a passion with them," Esposito said of the co-owners.
The question is, does either have the money?
Damian Cristodero can be reached at cristodero@sptimes.com.
