SBJ/November 23 - 29, 1998/No Topic Name

Team's stock may go solo

Hotels and ice hockey just don't mesh as well as expected, so billionaire businessman H. Wayne Huizenga may be ready to spin the Panthers hockey team out of Florida Panthers Holdings Inc.

The team went public in 1996, and after an aggressive real estate expansion program, the stock price soared to more than $30 a share. But the price now hovers near single digits, and the Panthers chairman may be ready for change.

At the company's annual meeting last week, the outspoken Huizenga responded to a question by saying a split between the real estate part of the company and the ice hockey team is one proposal under review. While nothing is definite, the mix of hockey and resort hotels has not proved as profitable as once hoped.

For its first quarter ended Sept. 30, the company's net loss was $20 million, or 57 cents a share, on revenue of $52.3 million. Real estate generates the bulk of the revenue.

"This is probably the right move," said George Cole, a sports banker with First Union Corp. "The team and real estate are valued with different methods and attract different investor bases."

Talk of a split comes as the Panthers have moved into their new home, the National Car Rental Center in Miami. As a result, the team is expected to turn a profit for the first time ever, said company spokesman Stan Smith.

While the team will finally be profitable, would a new Panthers-only public hockey team still just be a "souvenir" stock, suitable for fans and not serious investors?

The Boston Celtics and Cleveland Indians are public teams with no other holdings, and their stocks have performed poorly. Shares have been scooped up by loyal fans, but institutional shareholders have shied away.

"The sports business has not been run to produce a huge profit, and when there is a profit, it is put back in the company," said Robert Caporale, a principal with Game Plan LLC, a sport investment banking boutique. "If you are an investor, the question is why are you investing in it."

Caporale said there is an argument to be made that Ascent Entertainment Group Inc., which owns the Denver Nuggets and Colorado Avalanche, has also seen its stock price suffer because of its sports holdings.

Several months ago there were rumors that Ascent was considering spinning off its sports teams, but the company has denied the speculation.

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