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

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Old
02-04-2010, 06:41 AM
  #101
kombayn
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Well at least the NHL can get stable ownership in place. Nashville has ownership problems that need to be fixed soon and what about Columbus losing all that money? Bettman needs to go eventually. New blood is much needed.

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02-04-2010, 10:49 AM
  #102
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OK and LB (and others) are out. Vinik will be sole owner.

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

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02-04-2010, 11:19 AM
  #103
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I'll add this as details sometimes disappear into archives:

Quote:
The price for the team, the St. Pete Times Forum lease and 5 1/2 acres around the arena is unclear but likely will be less than reports in the $170 million range and substantially less than the $200 million OK Hockey paid in June 2008.
Time is critical. The SportsBusiness Daily Web site reported that to help meet January's payroll, the financially strapped team took an advance on the league revenue sharing money it will receive after the season. Vinik, recruited to ownership by the league, could begin covering the payroll as soon as a purchase agreement is signed.
The deal is not a one-to-one transaction. Palace Sports financed about $67 million of the purchase price and loaned another $30 million in operating capital. Galatioto Sports Partners, a New York sports banking firm, financed at least $30 million.
But Palace Sports also could be for sale and may be willing to take less than the full value of the loan to clear the team off its books.

Soooo.... the league has a limit on the amount that can be financed (50% of the sale price). That would mean $67 + 30 MM is the original debt; $2 MM from Sun Sports to meet payroll; PSE threw in an additional $30 MM as operating capital last Jan/Feb (2009). [$129 MM]

OK came up with $95 MM as down payment + whatever money was spent to run the team.

PSE claims it lost a total of $84 MM in running the team, which fits with their reports around the time of the sale of needing revenues of $80-90MM, and losing ~$10 MM per year. They also probably didn't have as much debt, having purchased the team for $115 MM.

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Old
02-04-2010, 11:35 AM
  #104
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This Globe & Mail piece has a little more information on Vinik's asset management history:

http://www.theglobeandmail.com/sport...rticle1450267/
Quote:
By March of 2008, reports filed with the U.S. Securities and Exchange Commission showed Vinik's company had $9.5-billion invested in stocks.
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.
...
While the hockey team has been losing millions of dollars for years, the arena is one of the busiest in the United States and brings in a lot of revenue. Last year, it was the second-most active arena to New York's Madison Square Garden.
Once among the NHL's top 10 in attendance, the Lightning are now averaging 14,994 fans per game, before last night's action. However, those close to the team say the actual average turnstile count is around 10,500.

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02-04-2010, 12:05 PM
  #105
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If anyone is interested in Vinik's (Vinik Asset Management) current portfolio

http://www.tickerspy.com/pro/Vinik-Asset-Management

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02-04-2010, 12:10 PM
  #106
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Just came across a tweet from our local beat writer Erik Erlendsson...

Quote:
Sounds like the sale announcement is imminent, with an announcement prepared and ready to be sent out

about 1 hour ago from mobile web
.

http://twitter.com/erlendssontrib/status/8638022543

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02-04-2010, 01:40 PM
  #107
LadyStanley
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Quote:
Originally Posted by Fugu View Post
Soooo.... the league has a limit on the amount that can be financed (50% of the sale price).
AIUI, the AHL has a similar limit for franchise ownership AND the franchise itself cannot be used as collateral (that's part of what tripped up the AHL Iowa franchise).

Wouldn't be surprised the ECHL wanted/had similar limitations as well.

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02-04-2010, 03:31 PM
  #108
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Per the St. Petersburg Times

Tentative agreement reached

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02-04-2010, 04:16 PM
  #109
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Quote:
Originally Posted by Major4Boarding View Post
Per the St. Petersburg Times

Tentative agreement reached

And he's financing the deal himself. Seems like this should go forward quickly from now on. It will be interesting to see the final sales figure, and if PSE gives up some what it's owed. (I presume they've been getting some form of payment until OK defaulted.)

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02-04-2010, 04:26 PM
  #110
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I do think it's interesting that Vinik's self financing. I'd have to think he could beat the cost of obtaining financing by investing his own assets properly.

To illustrate(figures are for example purposes only, not realistic, but simplified for illustration):

Borrow funds (50%, league max) at 10%, invest equal value of sale price in proper channels, earn 12%. Use interest payments from your investment, to pay debt service payments...interest income is your profit.

Just an interesting element to think about. Not that its a bad thing to be liquid in a purchase...just trying to think about it from an optimal standpoint, which is how investors tend to look at things. He must feel financially its more prudent and will yield a better return by directly investing his cash into the Lightning, as he feels that could beat any return he could get from the market.

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02-04-2010, 08:11 PM
  #111
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Quote:
Originally Posted by Fugu View Post
And he's financing the deal himself. Seems like this should go forward quickly from now on. It will be interesting to see the final sales figure, and if PSE gives up some what it's owed. (I presume they've been getting some form of payment until OK defaulted.)
"It is believed ..." = reporter's best friend. Funny how that gets turned into a fact.

Damian Cristodero "believed" that TB could qualify for a full revenue share - a mathematical impossibility.


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02-04-2010, 09:20 PM
  #112
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Quote:
Originally Posted by GSC2k2 View Post
"It is believed ..." = reporter's best friend. Funny how that gets turned into a fact.

Damian Cristodero "believed" that TB could qualify for a full revenue share - a mathematical impossibility.


Are you saying the sale isn't happening or something else?


Yes, you do keep bringing that part up, about the advance on this year's share of revenue. Do you think the league loaned 50%? How would they know what kind of attendance TB would have?

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02-05-2010, 12:16 PM
  #113
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Done Deal.

http://www.nhl.com/ice/news.htm?id=516378

"Buying the Lightning and joining the Tampa Bay community is a dream come true," Vinik said. "I've been an avid hockey fan my whole life and I pledge to our fans that I will work my hardest to build the Lightning into a world class organization both on and off the ice. I hope to bring a high level of excitement and intensity back to Lightning hockey, with a goal of having the team consistently compete for the Stanley Cup. I have a passion for the game and will do my best to restore a winning culture at the St. Pete Times Forum that all of our fans and partners can be proud of."

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Old
02-05-2010, 12:28 PM
  #114
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Quite a contrast comparing the speed with which Vinik closed the Tampa deal, and the (lack of) speed in closing the Phoenix deal. This despite "substantially less" than $170M meaning a significant loss for the existing owners (or their note holders).

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02-05-2010, 12:30 PM
  #115
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From the St Petersburg Times

Quote:
Boston investor Jeff Vinik secures purchase agreement to buy Tampa Bay Lightning
By Damian Cristodero, Times Staff Writer
Posted: Feb 05, 2010 11:30 AM

The Lightning is on its way to having new ownership as Boston hedge fund manager Jeff Vinik on Friday secured a purchase agreement to buy the team, the St. Pete Times Forum lease and 5 acres around the building.

The deal still has to close and Vinik needs approval from the NHL's Board of Governors for the transfer of ownership from OK Hockey. But because Vinik is paying cash and already has been vetted by the league, those are considered formalities and expected to be done in two to four weeks, when Vinik will officially take over the team.
One other thing of note, though not surprising

Quote:
It is believed the key to the transaction was the willingness of former owner Palace Sports & Entertainment to take less on the dollar to settle its financing of OK Hockey's purchase.
http://www.tampabay.com/sports/hocke...cle1070998.ece

Wonder how much the Pistons/Palace of Auburn Hills talk ramps up now that this is "out of the way".

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02-05-2010, 12:48 PM
  #116
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Quote:
Originally Posted by Dado View Post
Quite a contrast comparing the speed with which Vinik closed the Tampa deal, and the (lack of) speed in closing the Phoenix deal. This despite "substantially less" than $170M meaning a significant loss for the existing owners (or their note holders).
Yes, and despite the fact that a deal in principle with Glendale allegedly has been negotiated (as in-- they'd assume the existing lease).


Quote:
Originally Posted by Major4Boarding View Post
From the St Petersburg Times]

One other thing of note, though not surprising

http://www.tampabay.com/sports/hocke...cle1070998.ece

Wonder how much the Pistons/Palace of Auburn Hills talk ramps up now that this is "out of the way".
Also interesting is that the TB writer is sticking to his guns about the actual sales price (<$170 MM), and namely due to PSE willing to take the hit. PSE was also the guarantor for the Galatio Sports loan of $30 MM, bringing their full exposure to $130 MM. I wonder what - if anything - OK gets out of it (other than the disappearance of the debt)?


I like Vinik. Seems like a very smart guy, he knows and loves the sport, and seems to have the right approach with focus on getting great operational people in place. I'm certain he's done his homework, so his willingness to make of a go it is a good sign. It should help his bottom line too that he's paying cash!

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02-05-2010, 01:02 PM
  #117
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KK has a link to a brief interview with Vinik.

http://www.kuklaskorner.com/index.ph...ghtning_owner/

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02-05-2010, 01:28 PM
  #118
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Quote:
Originally Posted by Dado View Post
Quite a contrast comparing the speed with which Vinik closed the Tampa deal, and the (lack of) speed in closing the Phoenix deal. This despite "substantially less" than $170M meaning a significant loss for the existing owners (or their note holders).
And in part because the existing owners (or creditors) didn't throw the team into bankruptcy.

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02-05-2010, 02:30 PM
  #119
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http://www.cbssports.com/nhl/story/1...-lightning/rss

Vinik is a minority owner of MLB Boston Red Sox.

So, he comes with a sports pedigree.

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02-05-2010, 02:34 PM
  #120
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Quote:
Originally Posted by LadyStanley View Post
http://www.cbssports.com/nhl/story/1...-lightning/rss

Vinik is a minority owner of MLB Boston Red Sox.

So, he comes with a sports pedigree.
Then again, so did Boots .

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02-05-2010, 02:36 PM
  #121
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More on Vinik
erlendssontrib: #TBLightning sold to Jeffrey Vinik is official, and he is a big hockey fan, contrary to earlier reports. Thinking this is good news for fans

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02-05-2010, 02:43 PM
  #122
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Quote:
Originally Posted by LadyStanley View Post
And in part because the existing owners (or creditors) didn't throw the team into bankruptcy.
Then again, the NHL didn't take over the operation and try to get Reinsdorf a sweetheart deal.

Quote:
Originally Posted by LadyStanley View Post
More on Vinik
erlendssontrib: #TBLightning sold to Jeffrey Vinik is official, and he is a big hockey fan, contrary to earlier reports. Thinking this is good news for fans

What earlier reports? Did someone say he wasn't a hockey fan?

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02-05-2010, 02:49 PM
  #123
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There were rumblings early when the news broke from local sources saying he wasn't a hockey guy. That he was connected with the Sox but didn't know hockey and was going to blow up the team and treat it strictly as a money investment.

I like the news that Vinik has been watching the team for 2-3 months. This gives us some insight on how long they've been working this deal out and also shows that Vinik can keep his mouth shut unlike the former group.

Hopefully this gives the team some much needed stability. If the season ended today they would be in the playoffs. Making the playoffs is a big step to getting the fans back into the seats.

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02-05-2010, 02:59 PM
  #124
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I'm wondering if this will end up being a stopgap. He's not that rich, so I wonder if he can keep things going for the long haul.

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02-05-2010, 03:01 PM
  #125
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Quote:
Originally Posted by Fugu View Post
Then again, the NHL didn't take over the operation and try to get Reinsdorf a sweetheart deal.
Then again, the NHL didn't take over the operation (after the current owner walked away and announced to the NHL he was done) and try to get Reinsdorf a sweetheart deal.

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