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11-17-2012, 05:59 PM
  #764
Gallatin
A Banksy of Goonism
 
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Join Date: Mar 2010
Location: Pittsburgh
Country: United States
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I just finished my review of the Florida Panthers Arena Operations Auditor's Report for the years 1999-2008.

The parent company is Sunrise Sports & Entertainment Ltd. (SSE) and the sister corporations under that company are the Arena Operating Company Ltd. (AOC), and Florida Panthers Hockey Club Ltd. (FPHC). There was no information on whether SSE owned any other subsidiary corporations.

It was actually not too bad of a read, these guys did not go into nearly as much detail as I am used to with the Auditor's Reports for the businesses I have operated. I am running late to get to the Pitt basketball game though, so I will keep this short, and answer any questions folks may have in the next few days.

Miami is considered a strong entertainment market. When this very large Arena opened in 1999 there was a lack of Miami area facility competition for shows, and the Panthers were coming off a streak of several years good play that included a run to the finals. It holds 19k+ for 41+ hockey games, and 22k+ for 70-100 shows per year.

The first 3 years of 1999, 2000, 2001, they absolutely crushed it on pre-tax net profit, averaging well over $13 million per season. In 2002 another Miami area facility opened, driving increased competition that severely impacted pre-tax net, practically cutting it in half. Then the Lockout came in 2004/2005, damaging pre-tax net again.

They had a nice rebound in 2006 to $11.7 million, but pre-tax net was consistently eroded the next few years, to the point that in 2009 at the time this report was written, the Panthers sister corp owed the county more than $8 million, and there was concern that AOC did not have enough cash in the bank to meet it's debt service obligations for their part of Arena development costs.

If FPHC did indeed average 7.5 million in losses from 2002 through 2008, AOC pre-tax net profit has not covered all of those loses, and they are 3 to 4 million in the red for the period 2002 through 2008 if you add the two subsidiary corporations together.

The significant downward trend in pre-tax net profit from 2006 to 2008 leads me to believe that it possible combined losses for the sister subsidiary corporations owned by SSE have grown at an increasingly steep rate the last 3 years, as AOC pre-tax net profit is assumed to continue to erode, and FPHC's net losses are assumed to have increased in recent years. Knowing what I know of the industry, I would not be surprised to find out the combined losses of AOC and FPHC have grown to over 5 million a year recently.

Well there you have it folks. Some real data, some assumptions on my part, and an interesting look at the relationship between Arena and Hockey Team. Make of it what you wish and I will check in the next day or two to answer any questions that may be posted. Wow am I late for the game!


Last edited by Gallatin: 11-18-2012 at 11:26 AM.
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