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Karen Davidson could help determine Lightning's fate


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#1 Howard He Do It?!

Howard He Do It?!

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Posted 22 January 2010 - 07:28 AM

The situation in Tampa seems to be getting a lot worse.
QUOTE
Tampa -- For months, owners Oren Koules and Len Barrie, not to mention the NHL, have tried to find partners or even an outright buyer for the Lightning.

The possibility of Karen Davidson, widow of former Lightning owner Bill Davidson, selling the Pistons and Palace Sports & Entertainment might accelerate that process and none too soon as the Lightning's financial situation, long known to be tenuous, apparently is dire.

A report on the Web site of SportsBusiness Daily said the league, to help the team cover January's payroll, advanced it part of the revenue-sharing money it will receive after the season. It also said television-rights holder Sun Sports in April advanced the team $2 million to help it meet last season's final payroll.

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Sun Sports spokeswoman Amy Pempel declined comment.

NHL deputy commissioner Bill Daly would not confirm or deny the report Thursday but texted to reporters: "We are working with the current Lightning owners to resolve a number of issues for their mutual benefit and for the long-term benefit of the franchise and the league. We hope to have a resolution on at least some of those issues in the relatively near future."

"Otherwise," Daly texted the St. Petersburg Times, "we are not commenting further on the situation or on what may or may not be true."

Koules declined comment, and Barrie and Palace Sports CEO Tom Wilson did not respond to phone messages.

The flash point seems to be Karen Davidson's decision to explore selling the NBA's Pistons and possibly Palace Sports, the umbrella company that also owned the Lightning from June 1999 to June 2008.

Palace Sports, which claimed it lost about $84 million as Lightning owner, was so desperate to sell, it financed about $67 million of the $200 million sale to OK Hockey, which also got the St. Pete Times Forum lease and 5 acres of land around the Tampa arena.

Another $30 million or so was financed by Galatioto Sports Partners, a New York sports banking firm. Palace Sports also lent $30 million in operating capital.

The team's on-ice business has run smoothly since June, when NHL commissioner Gary Bettman decreed Koules, as CEO and governor, would handle day-to-day operations with general manager Brian Lawton. Barrie, battling financial troubles in Victoria, British Columbia, with his Bear Mountain Resort, need only be consulted on transactions of $2 million or more.

Still, speculation has been persistent that Palace Sports, as majority debt holder, could reclaim the team if Koules and Barrie did not keep up with payments, and Palace Sports has restructured the deal at least once to help the owners meet obligations.

A report in the Daily Tribune in Royal Oak, said the Lightning, which last season lost enough money to qualify for $15 million in league revenue sharing and has been hurt by lagging ticket sales and a bad economy, is in default of its Palace Sports loan. The report was not sourced.

True or not, Palace Sports does not want a money-losing property on its books if it might be sold. Finding a buyer is a much better option. Taking less on the dollar to satisfy its loan could speed the process by creating a more conducive purchasing environment.

Retiring the debt has been a parameter since Bettman in June put up the "For Sale" sign. He even gave Koules and Barrie, who were not in sync on how to run things, the chance to buy the other out, but neither came up with the cash.

Several potential buyers have kicked the tires, and there is talk of a group that could be well along in negotiations, though that could not be confirmed.

St. Louis real estate developer Anthony Sansone Jr. has been the most consistent name, though he has been unable to complete a deal. Miami Beach real estate developer Jeff Greene also did due diligence but decided not to pursue after looking at the books, he said.

The Detroit News

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