Lightning sale could trigger salary purge
The Tampa Bay Lightning ownership fiasco could come to an end soon, but speculation that the team will deal captain Vincent Lecavalier is just beginning to heat up.
According to multiple sources, the NHL is negotiating the sale of the Lightning and the five-acre parcel of land adjacent to the St. Pete Times Forum from the OK Hockey Group to Boston-based financier Jeffrey Vinik for an estimated price of $170 million.
The two groups met six weeks ago and while there are conflicting reports on whether or not a sale is imminent, it's believed Vinik has emerged as a front-runner to buy the team and is serious in his offer.
The financial difficulties of current owners Len Barrie and Oren Koules have been well documented, as has the rift between the two men. There is speculation the NHL had covered the Lightning's last payroll because the team was unable to do so and that there was no money to cover the upcoming payroll for Feb. 15.
Koules had no official comment on Vinik's interest when contacted, and NHL deputy commissioner Bill Daly and Lightning GM Brian Lawton offered no comment on the situation.
Vinik, a 50-year-old hedge fund manager, is well known in financial circles as an aggressive and innovative investor. A limited partner in the Boston Red Sox since 2002, Vinik once managed the Fidelity Magellan Fund, one of the largest funds in the United States until 1996, before leaving to establish Vinik Asset Management, which is also one of the most lucrative on the stock market. His net worth has been estimated at about $515 million and he apparently has no background in hockey.
It's believed that the deal is being brokered by NHL commissioner Gary Bettman, who is eager to have the Lightning in the hands of a more stable ownership situation, something Vinik potentially brings.
The Lightning has been in financial turmoil for over a year, but it has a very favorable lease with Hillsborough County, which the team pays about $650,000 per year for the use of the facility. However, attendance has spiraled downward since the team won the Stanley Cup in 2004. Recent figures indicated a turnstile count of just 10,576 per game, well below the Lightning's announced average attendance of 14,994, which includes giveaways and tickets sold.
There is also speculation that if Vinik buys the team, he will be eager to cut payroll to get player costs in line, which means Lecavalier and his $7.7 million salary cap hit (and $10 million salary for the next six seasons) may very well be shopped before the trade deadline and prior to Vinik taking control of the team.
When the OK Hockey Group purchased the Lightning in 2008, it required former owner Bill Davidson to extend financing for the purchase. Davidson has since died, but his family's company, Palace Sports and Entertainment, is owed about $100 million after OK Hockey defaulted on its loan and was reportedly on the verge of reassuming control of the franchise.
While it's not expected that Palace Sports and Entertainment will get all of its money back, a significant amount of the selling price would go to Davidson's company. Galatioto Sports Partners, a company that specializes in pro sports financing, is reportedly also owed $30 million that is secured. That wouldn't leave much for either Koules or Barrie, who clashed as owners and were unable to put together an ownership group on their own to purchase the team.
Despite the ownership troubles, the Lightning was just one point out of a playoff spot in the Eastern Conference with two games in hand over the eighth-place New York Rangers.