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Bank looking for another Lightning owner
Published June 29, 2009
The embattled owners of the Tampa Bay Lightning have hired an investment bank to potentially find a third general partner, sources said, as the team struggles with management division and financial losses.
Los Angeles-based Park Lane is exploring several options, including bringing in limited partners, securing a third general partner, or even finding a replacement for one of the current partners.
Last week, NHL Commissioner Gary Bettman mediated between Len Barrie and Oren Koules, who are divided over the direction of the franchise they jointly bought for $206 million in June 2008.
Koules and Barrie had to cover a cash-flow squeeze in mid-April, a source said. On the ice, the Lightning posted the NHL’s second-worst record in the just-concluded season, and attendance fell a league-worst 11.7 percent from the prior year. But the two differ on how to respond: Koules wants to restrain payroll, but Barrie wishes to increase it.
The team got an advance payment of $2 million from broadcaster Sun Sports in April around the time the club was making its last payroll of the season, sources said. It was in this period that rumors swept financial circles that the team was about to miss payroll, but the NHL said that did not occur.
While some sources described such accelerated payments as commonplace, had the team missed payroll, the previous owner, Palace Sports & Entertainment, would have regained control of the franchise. Koules and Barrie borrowed $100 million from Palace Sports and its adviser, Galatioto Sports Partners, to purchase the club, and under terms of the financing, if the team misses payroll, the ownership reverts.
It’s unclear whether the accelerated media payment was used to meet payroll.
The Lightning declined to comment, and a spokesman declined to make either Koules or Barrie available.
The tension is the latest example of the difficulties that can exist in joint control of pro sports teams. The owners of the Atlanta Hawks and Thrashers have brought their disputes into court, while the ownership of Liverpool FC by George Gillett and Tom Hicks has been fraught with in-fighting.
Park Lane founder and managing director Andrew Kline has sent out a financial prospectus to potential investors outlining the team and the investment opportunity. Kline also declined to comment.
Limited partnerships are challenging to sell in normal circumstances, as individuals who can afford them tend to want control of the franchise. In a down economy, and for a franchise expected to lose more than $10 million this season, Kline’s task would seem even tougher, creating a more likely scenario of someone buying in with more control.