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UPD: Lightning sold to Vinik (cash + future payroll?) (UPD - BOG approves sale)

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Old
02-02-2010, 04:28 PM
  #76
81ragnaH
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Quote:
Originally Posted by Jonas1235 View Post
says he's a minority owner of the red sox...isn't there a rule that an owner of an NHL team is prohibited from owning a sports team in a competing NHL city? or maybe i'm thinking of the NFL...

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02-02-2010, 04:33 PM
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Quote:
Originally Posted by 81ragnaH View Post
says he's a minority owner of the red sox...isn't there a rule that an owner of an NHL team is prohibited from owning a sports team in a competing NHL city? or maybe i'm thinking of the NFL...

I think you're thinking of the NFL.

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02-02-2010, 04:34 PM
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Originally Posted by Fugu View Post
I think you're thinking of the NFL.
ok, thought so. thanks for clarification.

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02-02-2010, 05:18 PM
  #79
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Even the NFL's rules don't apply to minority owners.

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02-02-2010, 05:54 PM
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Quote:
Originally Posted by 81ragnaH View Post
says he's a minority owner of the red sox...isn't there a rule that an owner of an NHL team is prohibited from owning a sports team in a competing NHL city? or maybe i'm thinking of the NFL...
Someone would need to inform MLSE lickety split.

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02-02-2010, 10:49 PM
  #81
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I think there may be a slight mix up regarding his net worth... I, too, could be wrong though.

I've seen more than one report his net worth is around $515 million. The portfolio for Vinik Asset Management is hovering around 800 million as of yesterday's close. Maybe some other assets not included + the Red Sox minority stake equating to around $800 million? Maybe the report erred and meant to say Vinik managing around $800.

Or maybe the Herald is right... seeing how he's in their backyard.

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02-03-2010, 06:32 AM
  #82
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Ken Campbell of THN seems to have an inside track.

http://www.thehockeynews.com/article...ecavalier.html

Quote:
Source: Vinik negotiating to buy Lightning at lower price and keep Lecavalier
Ken Campbell
2010-02-02 18:35:00

At different times over the past two days, NHL commissioner Gary Bettman, Lightning co-owner Oren Koules, Vinik and Palace Sports and Entertainment CEO Tom Wilson have been meeting at the NHL offices in New York in an effort to hammer out an agreement to sell the team from Koulesí OK Hockey Group to Vinik, a limited partner in the Boston Red Sox and one of the most successful hedge fund managers in the United States.

The sale is still expected to be completed, but there has been a twist. Vinik had originally planned to ask Lecavalier to waive his no-trade clause so his 11-year, $85 million contract could be moved. But Vinik has apparently come to realize there would be considerable backlash in the local market to that move, so he is negotiating to bring the purchase price down from $170 million to about $140 million. That, presumably, would make it more palatable to keep Lecavalier, even with his $10 million salary for each of the next six seasons.

Itís believed Bettman would make keeping Lecavalier for at least three years a requirement of the sale at a reduced price, but going down that much in price would certainly be a hit to Bettmanís attempts to keep franchise values high.
...
But Vinik, who has made his fortune buying and selling stocks and trying to outperform the market, would not pay that price, nor would he let anyone believe he paid anywhere near that amount. Sources say Vinik thought the $170 was too much, but was willing to pay it, but only if it meant Lecavalier could be moved.
He goes on to say that Vinik would prefer an even lower announced price of $125 MM.

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02-03-2010, 09:51 AM
  #83
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My thoughts are....

- $140M is 1/3 less than the previous sale price, ouch

- The NHL dictating roster moves is not, IMO, a good road to start traveling down. Especially when the NHL already owns/runs a team!

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02-03-2010, 10:28 AM
  #84
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Quote:
Originally Posted by Dado View Post
My thoughts are....

- $140M is 1/3 less than the previous sale price, ouch

- The NHL dictating roster moves is not, IMO, a good road to start traveling down. Especially when the NHL already owns/runs a team!

It was originally reported that Bettman advocated against moving Vinny because he felt the team's value would be higher, and thus easier to sell, if the roster weren't gutted of it's biggest star(s). In fairness, the blocked move to the Habs was after consultation with the GM, since the feuding owners couldn't agree on a course.

That said, it now appears that [at least based on this report] Vinik views the $10 MM/annum contract as too much given the team's operational needs ($$). It's interesting that he recognizes the value-- but want someone else to "pay" for it.

Beggars can't be choosers? (Or the cost of artificially inflated franchise values.)

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02-03-2010, 10:44 AM
  #85
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If Vinik thinks he can get this team for $125m, he's on crack. $140 maybe, 125? Get real man. Do you think I can walk into a dealership and demand a new Porsche for 30-35% off because it's a bad economy?

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02-03-2010, 10:48 AM
  #86
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Quote:
Originally Posted by donGjohnson View Post
If Vinik thinks he can get this team for $125m, he's on crack. $140 maybe, 125? Get real man. Do you think I can walk into a dealership and demand a new Porsche for 30-35% off because it's a bad economy?
depends on how desparate they are to sell....

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02-03-2010, 10:49 AM
  #87
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Quote:
Originally Posted by Dado View Post
My thoughts are....

- $140M is 1/3 less than the previous sale price, ouch

- The NHL dictating roster moves is not, IMO, a good road to start traveling down. Especially when the NHL already owns/runs a team!
the NHL has dictated roster moves for years....see contract/trade approval procedures....

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02-03-2010, 10:56 AM
  #88
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Originally Posted by edog37 View Post
depends on how desparate they are to sell....
No matter how desperate you are, you can only eat so much money when most of your initial purchase price was financed. They'd be eating their hats at that level.

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02-03-2010, 11:01 AM
  #89
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Originally Posted by donGjohnson View Post
No matter how desperate you are, you can only eat so much money when most of your initial purchase price was financed. They'd be eating their hats at that level.
better their hats vs nothing at all....

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02-03-2010, 11:13 AM
  #90
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Originally Posted by edog37 View Post
better their hats vs nothing at all....
Very clever, I admit. However, they'd be left over $40m in the hole, right? I'm thinking that'd be just too much to be workable. The NHL simply wouldn't allow it. They'll buy the team before they let that happen- rapid devaluation would ruin ownership in the NHL, and the B.O.G. would be pissed.

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02-03-2010, 11:22 AM
  #91
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According to this article:

http://www.mutualfundwire.com/articl...ireID=2&bhcp=1

The previous price was 100 million, not 200 million.

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02-03-2010, 12:11 PM
  #92
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Quote:
Originally Posted by Jonas1235 View Post
According to this article:

http://www.mutualfundwire.com/articl...ireID=2&bhcp=1

The previous price was 100 million, not 200 million.

No, Davidson paid ~$115 MM in 1999. OK Hockey purchased the team from Davidson two years ago for ~$204 MM. As OK couldn't line up a bank to finance 50% of the deal, Palace Sports covered $75 MM, and later refinanced to cover operational costs. The other stake holders are detailed in this thread.

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02-03-2010, 04:14 PM
  #93
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Originally Posted by donGjohnson View Post
If Vinik thinks he can get this team for $125m, he's on crack. $140 maybe, 125? Get real man. Do you think I can walk into a dealership and demand a new Porsche for 30-35% off because it's a bad economy?
The team is only worth what someone is willing to pay in that market.

If you have to sell and no one is wlling to pay more than $125 million then that is what it is worth despite what the NHL wants or the BOG's want...

Simple supply and demand 101..

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02-03-2010, 06:28 PM
  #94
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Why was the two-headed monster ownership even accepted into the NHL? What were the BOG's smoking.

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02-03-2010, 06:35 PM
  #95
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Why was the two-headed monster ownership even accepted into the NHL? What were the BOG's smoking.
Excellent question since Barrie perhaps should have raised some flags somewhere.......

Davidson knew his heirs weren't interested in keeping his sports empire, so he started the sales process before he died. I think he passed away a few months after the sale to OK Hockey. When OK Hockey couldn't come up with all the money & financing (recession was hitting around that time), PSE decided to finance them directly. Once in for $75 MM, they were kind of on the hook to keep the ship afloat. Barrie's deal was falling apart too, due to the recession as well (and maybe some other things, but that's another story).

From the NHL's perspective, they at least knew they had a solid backer in Davidson (net worth in the $3-4 billion range, IIRC), and the franchise value was in the range Bettman wanted to promote.

Partially timing is to blame, but one could say that some greater thought should have been given to a situation where the new owners were having trouble coming up with THAT much money. Maybe the price was also difficult to support once you started the due diligence.

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02-03-2010, 07:03 PM
  #96
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Give it to Vinik for 140. I mean what else can you do...At least he has the money to pay the ****ing bankroll.

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02-03-2010, 08:55 PM
  #97
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Originally Posted by edog37 View Post
the NHL has dictated roster moves for years....see contract/trade approval procedures....
That isn't dictating, that's approving.

Enormous difference.

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02-03-2010, 09:02 PM
  #98
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Quote:
erlendssontrib

Rumblings tonight of solid progress in sale talks; expect deal to be announced before the ink even dries on the contract
http://twitter.com/erlendssontrib


Erik Erlendsson of the Tampa Tribune.

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02-03-2010, 10:00 PM
  #99
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Quote:
Originally Posted by Fugu View Post
Excellent question since Barrie perhaps should have raised some flags somewhere.......

Davidson knew his heirs weren't interested in keeping his sports empire, so he started the sales process before he died. I think he passed away a few months after the sale to OK Hockey. When OK Hockey couldn't come up with all the money & financing (recession was hitting around that time), PSE decided to finance them directly. Once in for $75 MM, they were kind of on the hook to keep the ship afloat. Barrie's deal was falling apart too, due to the recession as well (and maybe some other things, but that's another story).

From the NHL's perspective, they at least knew they had a solid backer in Davidson (net worth in the $3-4 billion range, IIRC), and the franchise value was in the range Bettman wanted to promote.

Partially timing is to blame, but one could say that some greater thought should have been given to a situation where the new owners were having trouble coming up with THAT much money. Maybe the price was also difficult to support once you started the due diligence.
Bold = especially here in the Tampa Bay area. I'll get to that later.

You're right, Fugu. Davidson's health was ailing and the family expressed zero interest in taking over the reigns on not just the Lightning, but the whole Sports package. As evident now with the Pistons, etc.

I think (speculate) this may be the end result of Bettman helping facilitate the wish of an old friend (sell and get out) and it backfired, or blew up in his face. That the vetting was more than, shall we say, laxed after Absolute Hockey (MacLean and Sherrin) "fell apart". Bettman and Bill Davidson went way back together to the days when Bettman was in the NBA League office. I think it was brought to Bettman's attention, quietly, during the lockout that the feeling was it was time. With the Lightning having attendance ranking 2nd, 3rd, and 8th from 06-08, there was no rush however.

That's a nasty accusation, I know (the Due Diligence not exactly being diligent), to accuse Bettman of allowing the deal with OK. But I can't recall any other franchise acquisition where the initial group had their ducks in a row, fell apart (undermined perhaps?), and a quick throw-together on OK Hockey's part gets it done. With the seller backing 50% of the purchase no less.

I would assume (and agree Fugu), at the time, Bettman felt secure in that with PS&E holding the note, that if OK fell on their faces that it wouldn't turn into a PHX situation (hindsight). But that was while Mr. Davidson was still alive. Unfortunately that security blanket went with Mr. Davidson when he died in March of last year. Then things get to where they are now. Evenmoreso, Barrie dangling Bear Mountain may of played a big part.

Remember, although Barrie may not be "Citizen of the Year" to those around Langford B.C. and desecrating sacred caves, the auditor's report and subsequent investigation didn't take place until after he went in with Koules. Not taking up for Barrie by any means, or excusing the process by the League office, but glancing Due Diligence wouldn't even pick up on anything.

http://www.theglobeandmail.com/sport...rticle1271448/

The deal with Absolute Hockey was more than sound... between Doug MacLean, Jeff Sherrin, and Oren Koules there was enough financial presence to carry the deal through. Then in Oct - Nov 2007 everything went to Hell in a handbasket. For whatever reason, Koules (purposely?) withheld his portion of the installment and with MacLean and Sherrin feeling all parts not equal, bailed. The rumor mill suggested that perhaps Koules and MacLean were already at odds as to the operational side of things and that strain between them may have led to Koules then brokering a side deal with he, Mark Burg, and LB. Sherrin sued, but they settled o.o.c.

Davidson and Tom Wilson always made it known that the chronic losses per year for the Lightning were at or around $10MM a season (except the Cup year). I honestly doubt anyone but Tom Wilson will ever know what those "losses" really were and what they stemmed from. Local press always pegged it as "accounting" losses. The "land" in all these deals (Williams - OK) still sits vacant, no one knows why. The building, in relation to gross concert revenues has always been in the top 5 in the U.S. and top 10 in the world. See here and here

But the Lightning, for whatever reason has never been profitable. Except once. 10MM or so in "accounting" losses yearly, to me, doesn't scream "fail" for some reason when all other things considered (Favorable lease tag, consistent revenues via events and concerts, etc). Anyway... What really has things in a bad way now is that from 2002-2008 the Bay Area was thriving via Real Estate and Corporations and Start Ups were coming to Tampa in droves to set up shop (No state tax, favorable office space costs, etc) on the heels of that. Corporate sponsorship was pretty decent, obviously attendance was great. But starting Mid 2008 and really coming to a head in 2009 the bottom fell out. Fast.

http://blogs.tampabay.com/realestate...e-in-2009.html

The notion that attendance is starting to creep back up now that the Bucs season is over, despite a 12% unemployment rate in this area should show that although this is a Football first market, that people are finding a way to spend their sports dollar. It unfortunately took the Bucs season to be over to see it. This Market has shown (and will again) that it can support this franchise. Things have to turn around for that to be more visible though.

I see this deal with Vinik nothing more than a bridge or stop gap until it does turn around here. Then he flips it. Bettman is going to have to realize that the franchise value is going to be considerably lower than he'd like it be for the time being and also take care of PS&E, Galatio, OK in the process. Best of luck to you on that, Gary.

I say $150MM gets it done. Some or all aren't going to receive back what they are owed it seems. I wouldn't even be surprised that Vinik becomes the majority, Koules stays as a minority, and Barrie's lucky to even get a gratuitous hand shake when this thing's finalized.

EDIT/UPDATE -I guess not.

http://www.tampabay.com/news/busines...pa-bay/1070641


Last edited by Major4Boarding: 02-04-2010 at 07:44 AM.
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02-03-2010, 10:44 PM
  #100
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Originally Posted by donGjohnson View Post
Very clever, I admit. However, they'd be left over $40m in the hole, right? I'm thinking that'd be just too much to be workable. The NHL simply wouldn't allow it. They'll buy the team before they let that happen- rapid devaluation would ruin ownership in the NHL, and the B.O.G. would be pissed.
The NHL/Gary Bettman have done nothing but play chicken with rapid franchise devaluation for several years now.
Other owners should already be pissed at what has gone on. Honestly, how much can ANY NHL franchise be worth when one of the franchises had to be purchased by the league itself?!? Yeah yeah, there was more to that....that the league didn't want the team to move...so they bought it themselves because the only people even remotely interested in keeping it where it is bailed.
The NHL's handling of Balsillie has driven down franchise values, I think Vinik knows this and I also think he knows Balsillie (and people/groups like him) are still lurking. Look at Nashville, the league basically forced an Owner to take a drastically lower price for the franchise to avoid selling to a person they weren't too keen on. So, Vinik can basically low ball them. He knows the current owners have had to borrow money from the league to make payroll...he knows groups are lurking that want to move teams north....he can basically bid 30% lower than what the team is worth and say "What are you going to do? Sell to a guy that will move the team to Ontario? Buy the team yourself? Ha! I've got you by the clock-weights!"
Which he does.

Smart man to low ball. I think what the NHL thinks it's franchises are worth is a joke...they are worth much less and it is that way because of ridiculous actions they have taken in the past few years. Vinik probably knows that the alternative to him is not something the NHL wants, seeing how they basically threw the Preds at a fraud that had a group paying FAR less than somebody the NHL doesn't like....he knows he can play the good guy card and get a team dirt cheap...because the NHL is afraid of the alternative.
The alternative is a billionaire buys the team and arena......moves the team to Hamilton (or wherever else) while continuing to operate the very profitable Tbay arena and turning a money losing NHL franchise into a huge money maker. They don't want that...and they know that is the other option given how desperate current ownership seems to be. Only this half baked Ice Edge group has shown up to pursue the Coyotes....who do they really think is going to show up to buy the Lightning? Nobody. Vinik knows it.

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