More Trouble In Tampa

From TampaBayOnline/TBO.com today:

Lightning owners seeking investors

By ERIK ERLENDSSON | The Tampa Tribune

Hoping to strengthen their financial backing, the Lightning are looking to bring additional investors into the ownership group, a process that is already under way.
"It's a work in progress, but now that we've gotten through the first year and we've had time to work on it, we've got a couple of real good guys looking at it," team co-owner Len Barrie said. "It's about reducing debt. The more debt you eliminate, the better you can run your business."

OK Hockey, led by Oren Koules and Barrie, bought the team in June for a reported $206 million. Of the purchase price, $100 million was financed through previous owner Palace Sports and Entertainment, along with Galatioto Sports Partners.

The financing of the deal with Palace Sports was restructured, with NHL approval, in January.

While team officials have denied the Lightning were in any financial hardship during the first year under OK Hockey, there have been signs the team is not exactly on solid ground, despite qualifying for the league's revenue-sharing pool this season.

Rumors of a possible trade involving superstar center Vinny Lecavalier are fueled by the $10 million annual salary he will make for the next seven years as part of the 11-year, $85 million contract extension that kicks in July 1, along with a no-trade clause.

At the beginning of March, the team began charging building employees to park. Last month, more than 30 employees were laid off in what the team termed a "restructuring" process.

The team is also delinquent on at least $213,410.87 in realty taxes owed to Hillsborough County for the VIP east parking lot, a payment that was due April 1. A late fee was added when payment was not received by the end of April, and interest on the delinquent payment will begin to accrue if not paid by the end of May, although team spokesman Bill Wickett said that bill is expected to be paid to the county today.

Meanwhile, attendance inside the St. Pete Times Forum was significantly down this season, dropping nearly 12 percent from an average announced crowd of 18,692 in 2007-08 to 16,497 this season. With the drop of more than 2,000 fans per game, the Lightning fell from eighth overall in league attendance to 22nd.

The team lowered season ticket prices for next season.

While Barrie says the team is not behind on any of its loan payments, bringing in new investors could provide a boost to the franchise. But any new partners in the ownership group will be subject to the same league due diligence and background checks given to all team owners.

It is unclear where any new investors would fit into the ownership group, which currently includes eight members.

"Everything would have to go through the NHL, especially if it's a substantial investor, but any kind of effect adding new owners would have is premature for me to talk about," Barrie said. "We'll continue to work through the NHL and that way we can have a good ending."

TOCCHET ON HOLD: With Lightning general manager Brian Lawton attending the world championships in Switzerland this week, it has slowed the contract talks regarding interim coach Rick Tocchet. While a three-year deal is believed to be close, an official announcement might now come Monday.

JETTING TO WINNIPEG: Tampa Bay will play a preseason game in Winnipeg, Manitoba, on Sept. 24 against the Edmonton Oilers. The remainder of the Lightning's preseason schedule will be released at a later date.

Mr. Balsille should be made to read this 1000 times and produce a thesis on it before he gets a team.

TBay should declare bankruptcy too. Heh heh. Madness will ensue!

and the hits just keep on comin'!

Geez, Bettman's head must be ready to explode...
Remember the mneumonic for detecting a stroke...
Seriously, I would NOT want to be Bettman right now.

Gary's worst nightmare: Balsillie buys BOTH teams and moves them BOTH to Southern Ontario.

How sweet would that be?

Sweet. So damn sweet.

I know it can't happen... but dare to dream...

For those of you who read the article and see for yourselves the financial hanky panky it took to "buy" this franchise, don't you wonder why such a tenuously financed purchase was OKd and Balsillie with his liquid cash money are continually rebuffed?

shabbs wrote:Gary's worst nightmare: Balsillie buys BOTH teams and moves them BOTH to Southern Ontario.

How sweet would that be?

Sweet. So damn sweet.

I know it can't happen... but dare to dream...

My goodness, the prospect of how much $$ he could make by doing just that is sickening.

He could but the Yotes, move them to Hamilton or wherever - pay off the Leafs, Sabres and Wings, then buy the Lightning and keep them where they are, then buy the Panthers and move them to Quebec City.

He'd need his very own Fort Knox.

I think NHL rules prevent an owner from owning more than one team, so it would be a pipe dream if I am not mistaken.

SeawaySensFan wrote:For those of you who read the article and see for yourselves the financial hanky panky it took to "buy" this franchise, don't you wonder why such a tenuously financed purchase was OKd and Balsillie with his liquid cash money are continually rebuffed?

Interesting comment...the TB purchase was actually financed by Bill Davidson, the previous owner, who was, according to reports, pretty darn liquid, i.e. as owner of the Detroit Pistons among other things.

I say 'was' because Davidson just passed away recently.

I posed the question to Lyle Richardson if he thought Davidson's death might trigger some aftershocks as Koules and Barrie seemed to have blown the wad Davidson lent them. His opinion at the time was that he thought not.

But it may well be that those managing Davidson's estate decided to call in their markers with OK Hockey.

SeawaySensFan wrote:For those of you who read the article and see for yourselves the financial hanky panky it took to "buy" this franchise, don't you wonder why such a tenuously financed purchase was OKd and Balsillie with his liquid cash money are continually rebuffed?

That's it exactly SSF. It seems you and I are on the same page.
When I understood all the details about how the new 'owners' came to purchase the Lightning, it's really hard not to question why Bettman is continously rebuffs Balsillie's attempts and NOT see it as personal.

Now, if it's all about the principal (meaning it's the WAY Jim is going about it and until he conforms to their rules then MAYBE he'll find himself a member of the club of NHL owners) but really, what's the major concern: If they accept Jim's proposal, are they worried that will set a precedent for ANY new potential owner to bully their way into becoming an owner?

If that's the case, then I suppose I could understand it to an extent, but perhaps they can address that issue at a later time because if the Yotes are in deep dung, and Jim has LIQUID cash, the problem could be rectified quite quickly.
Trust me, should the REAL problem(s) of TB come to light, and then Bettman et al are stuck dealing with partner after partner and trustees and such, they're asking for one whopper of a migraine...

I think the NHL will step in and help the TB owners if things go too badly. It was a gong show, but at the same time, they are quite passionate about the game, have the money to pay the NHL back if there are loans to be had.

I doubt this evolves into too much of an issue to be honest.

From Lightning insider Damian Cristodero in his TampaBay.com blog today:

http://blogs.tampabay.com/lightning/2009/05/new-investors-could-be-a-good-deal-if-you-want-vinny-to-stay.html

TampaBay.com/May 06, 2009

New investors? Could be a good deal if you want Vinny to stay

Len Barrie on Wednesday reiterated that the team is looking for new investors, or one investor, to drastically pay down the $130 million up-front debt OK Hockey incurred during the $200 million purchase of the team, the St. Pete Times Forum lease and 5.5 acres next to the arena.

The debt load is about $30 million more than we have spoken of previously. That is because now we are including the approximately $30 million in operating capital OK Hockey had in the loan to help run the team in addition to financing about $100 million of the purchase price.

Former owner Palace Sports & Entertainment shouldered about 75 percent of that debt, or about $97 million. Galatioto Sports Partners, a New York sports investment firm, is in for the rest.

Anyway, there will be all kinds of information in tomorrow's story about how OK Hockey is looking for outside investment to pay down as much of that debt as it can.

The bottom line, though, is if the debt is reduced, well, maybe there is more room for Vinny Lecavalier.

As Barrie said, "If we put ourselves in a non-debt situation, what we're paying now in interest and fees can go into getting players instead of to the banks."

Consider Lecavalier's new 11-year, $85 million contract, pays $10 million next season, about a quarter of an expected payroll of $43 million to $45 million. That equation could change drastically if some of the Lightning's debt is lessened. In other words, perhaps payroll goes up.

Look, it's all up in the air. The world's economic collapse would seem to make it difficult to find any investors, though Barrie said the team has had "several" inquiries, none locally.

Asked if there was any interest from the group from Dubai, which Barrie has said is negotiating to buy his Bear Mountain Resort in Victoria, British Columbia, Barrie declined comment.

If no investor is found? "It just puts more pressure to play better or put more money into the team; as simple as that," Barrie said. "We just keep going. ... I don't think the team in Tampa is in jeopardy at all."

As for Lecavalier's future? A decision to build around him or reap what he could bring in trade has to be made before the June draft and before his no-move clause kicks in on July 1.

Barrie said he wants Lecavalier in a Tampa Bay uniform.

"He's a generational player," Barrie said. "Why wouldn't you want a player like that? ... We need to put good players around good players. If we make two ro three moves, shore up the defense, maybe add a forward, we're in pretty good shape."

Posted by Damian Cristodero at 05:45:51 PM on May 6, 2009

In one breath Barrie says they need to clear the debt so that more money can be put towards the payroll and then in another breath he says:

If no investor is found? "It just puts more pressure to play better or put more money into the team; as simple as that," Barrie said. "We just keep going. ... I don't think the team in Tampa is in jeopardy at all."

So, what is it? In trouble or not? Or just a pain in the Donkey with all this debt?

Definitely no consistency lies in Barrie's message, eh?

Good point Shabbs. A LOT more going beneath the surface here I think.

504Heater wrote:I think the NHL will step in and help the TB owners if things go too badly. It was a gong show, but at the same time, they are quite passionate about the game, have the money to pay the NHL back if there are loans to be had.

I doubt this evolves into too much of an issue to be honest.

Quite the opposite. Koules and Barrie never had the money in the first place and had to borrow it from former Lightning owner Bill Davidson.

And now these two are scrambling for cash.

Issues with this franchise? You better believe it.