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Vinik’s vision

Lightning owner Jeff Vinik sees bright days ahead for team, Tampa beyond Stanley Cup Final this year

In a suite set right along the blue line, Harry Barkett and a group of family and friends are among the more than 19,000 in attendance for an early round playoff game between the Tampa Bay Lightning and the Detroit Red Wings.

Barkett is unlike most others wearing Lightning blue this Saturday night though. He’s the president and CEO of Tampa-based Amalie Oil, the company whose name adorns the arena Barkett is sitting in. Amalie has its products sold in all 50 states and more than 100 countries, but as a supplier of motor oil and lubricants, it’s a rather nontraditional sports sponsor. Even with its name atop the arena, the company is a bit of an unknown among hockey fans, even in and around its Tampa home.

“As an owner of a sports team, it’s a responsibility to embrace the community.”
— Jeff Vinik

Photo by: GETTY IMAGES
So what led Amalie to sign a naming-rights deal with the team that’s become the biggest entertainment property in town?

“We wouldn’t be here if it wasn’t for Jeff Vinik,” Barkett said.

Step through the entry doors to the administrative wing at Amalie Arena and you’re greeted by large shiny letters mounted on a bright blue wall behind the receptionist’s desk.

Our Vision: A World Class Organization Unifying Tampa Bay through the Power of Lightning hockey and legendary events.

It’s a daily reminder of the standard that Vinik, the New Jersey-born former asset manager, set for himself and the rest of the team’s employees the day he became owner in March 2010.

Much like the city it calls home, the Lightning’s history is marked with peaks and valleys:

The first NHL franchise in Florida, and the first in the Southeast after the relocation of the Atlanta Flames more than a decade earlier.

An IRS investigation that resulted in a $750,000 fine for back taxes in 1994 and 1995.

Winner of the 2004 Stanley Cup.

Last in the league in 2007-08 amid ownership turmoil.

Inside Amalie Arena is a reminder of the standard Vinik has set for the franchise.
Photo by: TAMPA BAY LIGHTNING
But under Vinik’s watch, the team not only is living up to those standards on the wall, it quickly is surpassing them. Tampa’s trip to the Stanley Cup Final this year, despite ultimately losing in six games to Chicago, served notice to many that the team is back among the NHL’s top clubs and worthy of national attention. To that end, Vinik’s vision has bubbled over beyond the limits of the team and its arena, emerging in the form of a billion-dollar real estate project that aims to mark a rebirth of the city of Tampa.

A mere five years after being introduced in Tampa by NHL Commissioner Gary Bettman, Vinik might be the most popular guy in town. Who could have seen that coming? Not even Vinik.

“Ten years ago, I would have never predicted I’d own a hockey team. Five years ago, I never would have never predicted I’d be involved in real estate development,” Vinik said. “One of the fun things is you never know where life is going to take you.”

Despite growing up in New Jersey and later New York City, Vinik never played hockey or even learned how to skate. He did, however, spend many late nights watching the New York Rangers on a fuzzy TV in his bedroom while his parents thought he was reading books.

After graduating from Duke with a degree in civil engineering, followed by an MBA from Harvard Business School, Vinik made his name in the asset management industry. He quickly moved up the ranks at Fidelity Investments, ultimately managing the Magellan Fund, which at the time was the largest and most visible mutual fund in the investment industry, with more than $50 billion in assets under management at its peak.

Vinik stepped down from that position in 1996, starting his own hedge fund later that year. Known for his approach of being a judicious stock picker and buying and selling quickly, his decision-making was widely followed by those in the investment industry.

Photo by: TAMPA BAY LIGHTNING
JEFF VINIK


BORN: Deal, N.J.
AGE: 56
FAMILY: Wife, Penny; children Danny, Jared, Kyra and Joshua
EDUCATION: Duke University, Harvard Business School
BEFORE THE LIGHTNING: Managed Fidelity’s Magellan mutual fund in the 1990s

OTHER INVOLVEMENT IN SPORTS:
Minority ownership interest in Boston Red Sox
Served as a director at Liverpool FC from 2010 to 2013
Acquired AFL Tampa Bay Storm, who also play at Amalie Arena, in January 2011

But it was at a December 2008 Jingle Ball holiday concert in Massachusetts where Vinik decided he would take a different step.

“I was sitting at the concert with a friend, drinking a glass of wine as our daughters watched,” Vinik said. “I turned to him and said, ‘I’m turning 50, and I don’t like to play golf. I like going to museums but don’t want to go to too many museums with my wife. What am I going to do to have fun the rest of my life? Well, I’m going to buy a hockey team.’”

Vinik at this point wasn’t a complete stranger to sports ownership. He had picked up a limited-partnership interest in the Boston Red Sox when friend and fellow Boston-based financier John Henry led a group that acquired the Red Sox in 2002. It’s there where he learned the importance of strong leadership and ownership in sports, and how that could lead to success all around.

Still, this would be his team to lead. The stakes, literally, would be higher.

So the next morning, Vinik woke up and bought numerous textbooks on sports business. He even went online and Googled “How to buy a sports team.”

“It said one, be rich; two, know a lot of people; and went on from there,” Vinik recalls.

An analyst by training, he spent the next few weeks engrossing himself in the sports business. Through some mutual connections in the financial industry, he was able to set up a meeting with Bettman to discuss his goal.

“I knew of Jeff as an extraordinarily bright and smart person, obviously very successful at Fidelity, and a passionate sports fan,” Bettman said. “He told me it was his dream to own an NHL franchise, and as I do with many people with that message, I told him I’d keep him in mind and look for the right opportunity.”

To help with the learning process, Bett-man introduced Vinik to Jac Sperling, a veteran sports executive and lawyer who had helped facilitate earlier acquisitions of the Winnipeg Jets and the Anaheim Mighty Ducks. He also oversaw the expansion process of the Minnesota Wild as CEO of team parent company Minnesota Sports & Entertainment.

After a few conversations, Vinik retained Sperling to help him identify the right opportunity. While being east of the Mississippi was critical for Vinik and his family, he evaluated roughly 10 franchises, even some that were not available. He looked at both Dallas and Phoenix, as well, and he considered minority positions with other teams, but he desired to hold majority control because if the right decision for the team in the long run was uneconomical in the short term, it would still be done.

Six years after he spoke to NHL Commissioner Gary Bettman about owning an NHL club, Vinik’s team competed for the Stanley Cup.
Photo by: GETTY IMAGES
“With the Lightning, it was a franchise that had success before, and that was attractive to him. Plus, it was available,” Sperling said. “But it also was a fabulous location with a great community, exactly where he would like to live with his family.”

When looking at Tampa, Vinik saw a city close in proximity to beaches and with diverse cultural activities, as well as with positive demographic trends — considerations important to him because he knew it would be important to be living in the city where he owned a team. In the Lightning, he saw a club with a history of success both on the ice and at the gate, and with two rising young stars in Steven Stamkos and Victor Hedman.

He identified the risk factors as well: The local economy had been in a terrible recession because of the housing crash and its tie to the construction industry. And while the fan culture was strong in the Tampa area, median income levels were lower than in other markets around the country, limiting potential increases in things like ticket prices.

Through all his layers of evaluation, Vinik concluded that Tampa was for him. He committed to buying the Lightning. Within 15 months, he went from an idea that was discussed over glasses of wine to putting ink on paper.

BUILDING HIS TEAM

When the transaction closed early in 2010, Vinik had acquired the franchise, the lease to the team’s arena, and roughly 5 1/2 acres around the facility for approximately $110 million, a sum he paid in cash. The total was about $90 million less than the team’s previous owners had paid nearly two years prior.

“The franchise had its challenges, with a series of owners other than Bill Davidson [who owned the team between 1999 and 2008] and now Jeff who weren’t able to provide the degree of resources, commitment and business acumen at a level that this franchise and city required,” Bettman said. “What was clear to me from when I met him, for lack of better words, is that Jeff would be all in.”

But while Vinik’s desire to deliver a world-class franchise to Tampa was apparent even in his introductory press conference, Vinik knew he couldn’t do it alone.

“When I bought the team, I said we would be world class on and off the ice. I said it so many times my kids made fun of me for it,” Vinik said. “I think I’m a decent leader, and I thought I could be a good owner, but I should not be the guy who is picking players or running the business, so first things first: It was essential to find great leaders on both sides.”

Vinik spent the first few months after acquiring the team interviewing a variety of candidates, but he set his sights on two in particular: Tod Leiweke, then CEO of the Seattle Seahawks and Vulcan Sports & Entertainment, and Steve Yzerman, the legendary Detroit Red Wings player who was serving in a vice president role with his former team.

Yzerman had been approached by a number of teams for a management position, given his success with Hockey Canada and his pedigree working under Detroit general manager Ken Holland. Vinik, in his pitch to Yzerman, stressed that he was willing to make the Lightning a cap-max team but also that he understood it was not a quick-fix in Tampa. The team would be built through the draft, yet with the ultimate goal of becoming a perennial Stanley Cup contender.

It worked. Yzerman was announced as vice president and general manager of the Lightning in May 2010. But there still was the off-ice business to tend to.

One of the first times Leiweke met Vinik was in Vancouver during the 2010 Winter Games. The two met for dinner, along with their wives, where the conversation was more about the United Way and charities than sports.

Before moving to Seattle, Leiweke had been president of the Minnesota Wild and chief operating officer of Minnesota Sports & Entertainment, doing so at the time when Sperling was the team’s CEO. He knew NHL team operations and was deeply connected throughout sports. Still, Leiweke initially was opposed to taking the leadership role with the Lightning that Vinik wanted him to have, given the great respect and trust put into Leiweke by Paul Allen to appoint him to his position at Vulcan.

A few months later, though, Vinik “played dirty,” as Leiweke recalled with a chuckle.

“He had Steve Yzerman call me,” Leiweke said. “One of my vulnerabilities is that I’ve been a lifelong hockey fan, and I can still remember Steve coming into Minnesota and just having his way with the Wild.”

Once again, Vinik’s move worked. Leiweke was announced as chief executive officer of the Lightning in July 2010, receiving a small stake in the franchise as well.

THE INNER CIRCLE

Jeff Vinik is quick to credit those around him for the success the Lightning and the downtown Tampa real estate endeavor he’s spearheading have had to date. That group of closest confidants includes:
Tod Leiweke: CEO, Tampa Bay Sports & Entertainment/Tampa Bay Lightning
Steve Griggs: President, Tampa Bay Lightning
Jim Shimberg: COO, Strategic Property Partners; EVP and General Counsel, Tampa Bay Sports & Entertainment
Jac Sperling: Managing member, Strategic Property Partners
“[Those moves] gave us credibility instantly, both in town and in the hockey world,” Vinik said, looking back at the hirings.

One of Leiweke’s first moves in Tampa was to recruit a former colleague from Minnesota, Steve Griggs, who had been serving as executive vice president of sales and marketing for the Orlando Magic. Vinik, Leiweke and Yzerman were all newcomers to Tampa. In Griggs, the bet was that the Lightning would be getting an executive who had a good sense of what would work well in the marketplace.

“I saw a lot of the same things that I saw in Orlando, but here you have three teams and a university,” said Griggs, who joined the Lightning as COO in August 2010 and serves now as the team’s president. “But when I spoke with Jeff, he brought a vision that this could be a great organization and he saw that it could be done here. And I wanted to work with Tod to make that happen.”

One of the first times that Griggs met Vinik in his office, Vinik drilled Griggs with all sorts of questions regarding ticketing pricing and strategy. Griggs answered as many as he could, telling Vinik he would teach him everything he knew about ticketing if Vinik would teach Griggs everything he knew about the financial markets, and suggesting a number of books and resources to scour for more information.

The next time they met, Vinik had read every one of Griggs’ suggestions.

The leadership team was in place. Now, the task turned to reshaping the franchise in terms of creating a world-class experience for Lightning fans.

A NEW LOOK, INSIDE AND OUT

The focal point was the arena. For Vinik, that meant putting his own money into the facility he was leasing from the city. All told, he would end up making a roughly $62 million commitment to the facility between 2011 and 2013. Griggs would oversee the developments.

Every one of the arena’s 69 suites would be reconstructed and remodeled. Every seat in the venue would be replaced with one that featured cup holders, the absence of which had been one of the fans’ biggest complaints. A Daktronics-installed HD video display today fills more than the distance between the rink’s two blue lines. Additionally, as a throwback to NHL barns of old, a digital pipe organ with a 300-speaker sound system was installed, with a vivid light display behind it that can go along with the music. There also are two giant Tesla coils that hang from the ceiling, creating indoor lightning when the team scores.

But the developments don’t stop there.

One of the crown jewels of the renovation of Amalie Arena under Vinik has been the creation of an outdoor party deck, previously just the roof of the arena’s restaurant. The area provides spectacular sunset views looking out onto the water surrounding Tampa’s Channel District, where the arena is located.

It also provides a view of Vinik’s vision for Tampa beyond just the Lightning.

Vinik didn’t know a billion-dollar mixed-use development would come from his real estate purchases.
Images by: STRATEGIC PROPERTY PARTNERS

“Looking out, there was real estate that was available across the street from the arena, just parcels of unused land and parking lots,” Vinik said, recounting the creation of his plan. “A place next to that became available, then a parcel was available nearby. My thought was, worst case, real estate in a downtown area next to water will appreciate over time, and best case, maybe we’ll develop it.

“We didn’t know we’d be talking a billion-dollar-plus development now.”

For this endeavor, Vinik formed Strategic Property Partners, a holding company that specifically focuses on Tampa’s downtown real estate. Vinik serves as managing partner, with Sperling as managing member, Leiweke as CEO, and Jim Shimberg, a longtime Tampa real estate lawyer who had been serving as city attorney, later joining as chief operating officer.

In 2011, Strategic Property Partners paid approximately $6.8 million for seven acres near Amalie Arena. A year later, they bought five acres more for $9.5 million, and in December 2014, they added four additional acres for $18 million. Vinik also bought existing buildings in the area, acquiring nearby outdoor mall Channelside Bay Plaza for approximately $7 million, and the 719-room Tampa Marriott Waterside Hotel & Marina for $150 million, both in the fall of 2014.

Vinik dove head-first into educating himself about real estate developments. He and members of Strategic Property Partners traveled across the United States engrossing themselves in different cities, with Vinik taking the opportunity to examine other NHL markets closely when traveling with the team or at league events like the 2015 NHL All-Star Game in Columbus.

As with many of his other ventures, Vinik perused as many books and texts on the topics of urban planning and creating mixed-use neighborhoods as possible, even going as far to hire the man who literally wrote the seminal book on walkable cities and downtowns, Jeff Speck.

To put even another rubber stamp on Vinik’s real estate vision, Bill Gates’ Cascade Investment fund signed on to help finance the project in September 2014.

“From what we’ve been able to do, there’s a lot of folks out there now saying, ‘Well maybe the team does work there.’ And then it was, ‘But what about the community around the arena?.’ And now, as we’ve gotten into the real estate pro-ject, it’s become, ‘Gosh, why didn’t they do that 20 years ago?” Leiweke said. “What was improbable and maybe to some illogical, now it almost seems destined to be.”

But Vinik isn’t affecting the community only by what’s to come. He’s making a distinct impact now — one family at a time.

IDENTIFYING HEROES

Richard Gonzmart is waiting with his family down at ice level before Game 5 of the Lightning’s first-round playoff series. The president of the Columbia Restaurant Group, Gonzmart is a fourth-generation family member overseeing a local restaurant empire headlined by The Columbia in the nearby Ybor City neighborhood.

Gonzmart was there to be recognized by the Lightning Community Heroes program, something Vinik and his wife, Penny, began in 2011. The program highlights at every home game a community member who is making a difference in Tampa, awarding that person $50,000 to give to a charity of his or her choice.

Lightning Community Hero Richard Gonzmart got more than a photo op with Vinik and defenseman Jason Garrison.
Photo by: TAMPA BAY LIGHTNING
The program, to which the Vinik family pledged to donate at least $10 million over the course of five years, even awarded the money during the time that home games were scheduled but canceled by the 2012-13 NHL lockout. The program additionally increased the donation amount to $100,000 during this year’s Stanley Cup Final.

As the players left the ice after warm-ups and the Zambonis began to prep the ice surface for that night’s game, Vinik along with Tampa defenseman Jason Garrison greeted Gonzmart for what could have been just a quick photo, a handshake and a hand-off of a ceremonial jersey and check presentation — all of which would be broadcast during the game on the in-arena scoreboard. But after the scheduled greetings and procedures were finished, and Garrison headed to the locker room for his final preparations for that night’s game, Vinik stayed to chat with Gonzmart about life, charity and family.

“Just seeing the way Mr. Vinik gives back to the community and runs his business, it makes me want to do even better with ours,” Gonzmart said later about the experience.

For Vinik, the community in Tampa was a large reason why he was attracted to the team from the beginning. It remains a reason why he is so driven in his various projects.

“As an owner of a sports team, it’s a responsibility to embrace the community, and even more, this is our community now too,” Vinik said.

Tampa Mayor Bob Buckhorn says Vinik is “what every owner should be.”
Photo by: AP IMAGES
Tampa Mayor Bob Buckhorn has seen it firsthand. The assistant to the mayor when Tampa was awarded an expansion franchise in 1990, Buckhorn has seen the ebbs and flows the franchise has taken through the years.

“When Jeff bought the team, no one here really knew him,” Buckhorn said. “Since then, he’s really made a commitment to the city of Tampa — financially, emotionally and personally.”

After buying the team, Vinik started what was perhaps his most important sales pitch: Convincing his wife and family on the idea of uprooting from their Boston home to move to Florida.

“One of my main premises was owners can make a difference, and it’s important to live in the same city that the team is in because it’s important to be part of the community, it’s important to be active, it’s important to be seen by the fans — and it’s fun,” he said.

Vinik was somewhat of a commuter at first, with children who were still in the final years of high school. But less than two years after acquiring the team, he and his family established permanent residence in Tampa. He and Penny now have become involved in a number of charities in the community, and they also frequently host members of the city’s business and municipal community at their home for dinner.

“His actions have repaired the wounds between the team and the franchise in this community, which were deep, and I think he did so in the way that should be the model on how to get it done,” Buckhorn said.

Vinik also has helped re-energize the city of Tampa, which has had visions of grandeur before. The 1988 book “Megatrends” declared that Tampa would be the next great American city. Three recessions later, the city hasn’t reached that point, but Buckhorn thinks the time is near.

“I’ve lived through all of that stuff, the ups and the downs, and the ‘next great city’ and then not so much,” he said. “But for the first time in decades, everyone in this town is on the same page.”

Buckhorn, who is serving his second term after being elected mayor in 2011, has dedicated much of his tenure to building and reinvigorating the city’s urban core. It’s a plan that he says aligns with the projects Vinik has his hands in, which are now also drawing the attention of developers for possible additional projects in the greater Tampa region.

But what will this new neighborhood of Tampa that is sprouting up around Amalie Arena be called? Buckhorn said he’s heard suggestions of calling it “Vinik-ville,” but there is one key person who is staunchly opposed to that name.

“Jeff hates that idea,” Buckhorn said with a laugh. “But that’s his personality, and that’s what makes him so great to work with. It’s not about him at all.”

Still, it doesn’t stop Buckhorn from taking a bit of pleasure out of it.

“Every time I have to introduce him at a big event, I have great fun telling great things about Jeff Vinik and what he has done because I can watch him squirm in his seat,” he said. “I think if it were up to him, he’d be just as happy if he could do all these things and no one noticed.

“In my estimation, he is what every owner should be,” Buckhorn added. “As a mayor, I couldn’t have a better partner than Jeff Vinik.”

LEAVING HIS MARK

As he sits in the Champions Sports Bar on the ground floor of that Marriott Waterside property he owns, Vinik says he takes the same approach to the ebbs and flows of the team and the real estate project that he did when he was working in the markets.

“You can’t get too high, can’t get too low,” he said. “Going to have bumps in the road, going to have things not work.”

When he purchased the team, it was losing “quite a bit of money,” he said, a financial reality that was factored into the price he paid for the franchise. Now, Vinik says, the losses are in single digits of millions, progress with which he’s pleased.

“If we could break even, make a difference in the community and have a great hockey team all at the same time — I’ll sign up for that formula forever,” he said.

It’s not just within Tampa where Vinik has made gains. He’s also risen quickly in prominence in the NHL’s ownership ranks. A member of the NHL board of governors’ executive committee, Vinik said he often seeks out advice from other members of the board on running a franchise and on other charitable endeavors. He also fields questions from other owners who are impressed with the franchise’s actions in Tampa.

The key, Vinik said, is the people, something that hasn’t changed for him through his years in business.

“Any business, or any endeavor, it comes down to the people. If you hire well and have people with integrity who are smart, who are thoughtful, and give them the resources, that’s the path to success for any franchise,” he said. “From my position, I try to provide leadership with just good values and treat people how I would like to be treated. Hire the best people you can, pay them well, give them 100 percent accountability and the best resources, and judge them accordingly.”

Vinik still enjoys reading, albeit with the Lightning’s postseason run and a host of work to do with the real estate project, he’s gotten a bit behind. The latest book he’s cracked open is on museums, and just like the ones before about sports management, ticketing and urban planning, it could be tied to something down the road. Vinik and his group have been in talks with the local Museum of Science and Industry to move its facilities to the new development, something he says “would be awesome.”

So what is Vinik’s next chapter going to look like?

“I’ve always been one to say you play the cards as they come out of the deck,” he said. “You make the best decisions you can make based on the information that’s available, and you don’t try to predict what will happen five years from now, and you don’t second-guess yourself — as long as you made a good honest effort to make the best decisions that you could.”

TAMPA BAY LIGHTNING: A VOLATILE HISTORY

1990
Tampa is awarded an NHL expansion franchise.

1992-93
Lightning plays its inaugural season. Supported by hockey legend Phil Esposito, the team’s initial owners, a group of Japanese businesses led by resort operator Kokusai Green, reportedly had the team on the verge of bankruptcy as it bled money. Principal owner Takashi Okubo is believed to have never attended a game.

1998
Insurance tycoon Art Williams buys the team. While the club’s finances improved, it was still a money-loser, and Williams would sell the club roughly a year later.

1999
Bill Davidson buys the team, launching what would become the Lightning’s longest stretch of success, financially and competitively. Under Davidson, whose Palace Sports & Entertainment also owns the Detroit Pistons, the Lightning would win the Stanley Cup in 2004.

2008
As Davidson’s health wanes (he would die in 2009), he sells the team to an ownership group fronted by former NHL player Len Barrie and film producer Oren Koules. What followed was a series of spats over management issues that reversed the franchise’s progress. Both sides had the opportunity to buy the other out, but neither did so, and  NHL Commissioner Gary Bettman was even forced to intervene at points.

2010
Jeff Vinik buys the team, becoming the Lightning’s fifth owner in its two-decade history, and he begins to set the course for the franchise’s current standing.

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