31 January 2010
Hey Lightning fans, we may be going from this:
Yeah the coolness factor is getting a downgrade...ok in seriousness, the St. Petersburg Times reports that the deal for Jeffrey Vinik to buy the Tampa Bay Lightning is 'all but official'. Boston hedge fund manager who runs Vinik Asset Management LP in Boston is in negotiations to buy the Lightning, the lease to the St. Pete's Times Forum and 5 acres of land surrounding the arena for $170 million.
Since the Lightning are rumoured to be needing cash advances, the sale of the team before the next payroll date on February 15th is being pushed by the NHL.
Vinik is already a minority owner of the Boston Red Sox and used to manage the Fidelity Magellan Fund.
From the Globe and Mail:
However, a series of large sales that correctly foresaw the recession in late 2008 brought a huge windfall to Vinik Asset Management, although how much is not known. In early 2008, Vinik sold most of his stock holdings before the markets crashed. When the markets recovered in 2009, he started buying again, and SEC reports showed Vinik's fund grew to $6.8-billion by June 30, 2009. But by last Sept. 30, Vinik sold all but $1.6-billion of his holdings – a sign he expects the market to dip again early this year and leaving him with a large amount of cash.
OK Hockey originally bought the Lightning for $200 million, and since the cost for Vinik seems to be at $170 million, the owners will take a loss. Koules and Barrie still owe Palace Sports and Entertainment more than $100 million and Galatioto Sports Partners more than $30 million.
Now before people jump to comparisons with the Phoenix Coyotes situation there are a few marked differences between the clubs. The first one if that Tampa has been a hockey market, once among the NHL's top 10 in attendance. So if the team is able to put together a few wins and show their fans that they are serious about the game, the team should be able to survive in this market. The Coyotes have not been able to demonstrate a strong fanbase, even with an appearence to the playoffs. The expectation for this particular market is not a sell out every night, but to be financially viable. It will never be one of the hockey mad markets with 10 year season ticket holder wait lists, but as far as hockey markets go, this one should not be doing this horribly.
The other difference between the Lightning and Coyotes is the control over the arena, which in Tampa the St. Pete's Times Forum is controlled by OK Hockey (currently). The control of the arena, and revenues generated from it will be sold with the team to Vinik. In Phoenix, the Coyotoes pay the city of Glendale for the use of the Jobing.com arena.
Vinik may not know anything about hockey, and that may be a good thing. Unlike OK Hockey who professed to be hockey fans and ended up pissing away the team, if Vinik has no interest in hockey I could care less. As long as Vinik hires the right people who knows how to run a hockey club, what we will see as an end product on the ice will be a good product. Unlike OK Hockey who took the reigns over the team, I doubt Vinik will make any hockey related decision and that really is the way to go. Vinik will be no doubt a man of numbers, and being that this will be an investment, he will want to see money being made which can only be done with a winning hockey team.