Florida Panthers Get Tax Payer Bailout

[Rich]

This deal doesn't sound as bad as what the City Of Winnipeg guaranteed Shenkarow when the Jets 1.0 left, but you have to wonder if it really is worth injecting public funds to prop up a sports franchise that has been losing around $30 Million annually.

 

 

http://www.tsn.ca/potential-panthers-bailout-quashes-quebec-city-relocation-whispers-1.377849

 

 

Quebec City may eventually get an NHL franchise, but it isn’t likely to come in the form of the relocated Florida Panthers.

The Panthers and BB&T Center owner Broward County will begin public deliberations on Tuesday on an amended arena lease which would inject $86 million in aid into the team’s bottom line and keep the Panthers in South Florida through 2027-28.

 

The complex funding includes multiple guarantees on the county’s investment should the Panthers be sold (and relocated) or if the team enters bankruptcy.

 

The Panthers will also fork over its cut of the league’s expansion fee to Broward County, after team losses are covered, should the NHL expand between 2015 and 2021.

 

Given that Panthers owner Vinny Viola and partner Doug Cifu negotiated the terms with Broward County executives and their consultant, the deal is expected to be passed by the Broward County commission, with final approval likely sometime in early 2016.

 

Broward commissioners did not support a $78.6 million request for aid by the Panthers in 2013.

 

According to the Sun-Sentinel, the Panthers’ aid from Broward County will average $6.6 million a year, but call for front-loaded payments beginning with $12 million in the first year.

 

If the Panthers are sold, Broward County will receive 10 per cent of the profits of the sale, plus Viola will give the county an “irrevocable letter of credit” to essentially repay the county for these funds.

 

The Panthers will also share 10 per cent of gross revenue with Broward if the team’s gross revenue exceeds $145 million per year in the first six years, according to the Sun-Sentinel. County consultants calculated for the Sun-Sentinel that the Panthers lost $36 million last season and $27.3 million in 2013-14.

 

To help push the deal through, the NHL has committed to an All-Star Game at BB&T Center before 2022 and will donate $1.5 million to youth hockey in Broward County. League officials are expected to attend Tuesday night’s public discussion.

 

This controversial aid from Broward County is believed to be necessary by commissioners because, like city-owned Gila Arena River in Glendale, Ariz., Broward calculated the BB&T Center will be a bigger financial disaster without a primary tenant in the Panthers.

 

Also like the Coyotes, the Panthers have negotiated an “out-clause,” which would allow the team to cut ties in Broward as early as 2023, but the team must show $100 million in losses over seven years and pay a termination fee.

 

Since Viola’s group purchased the Panthers for a reported $250 million in Sept. 2013, the club has vowed to remain in South Florida despite repeated whispers of a move. This new bailout would finally put those rumours to bed.

[FrostyWinnipeg]

Does not seem like enuf money for the Panthers.

[bustamente]

The sooner the league starts moving these fringe teams the better. It got to bother the NHL to see buildings at 60-70 percent capacity.

[iHeart]

wow sounds like they are they are entering Coyotes territory there and it could end up getting messy.

[The Unknown Poster]

Not enough money. $8-$12m per year? Plus they have to give their portion of expansion money?

If be curious if, despite guarantees of the team can bankrupt themselves out of obligations.

[HardCoreBlue]

The sooner the league starts moving these fringe teams the better. It got to bother the NHL to see buildings at 60-70 percent capacity.

For more knowledgeable people than me, why is it that a team like Tampa Bay can thrive but not Florida?

[Goalie]

Location location location. Florida is in sunrise...

[johnzo]

Not enough money. $8-$12m per year? Plus they have to give their portion of expansion money?

The Panthers will also fork over its cut of the league’s expansion fee to Broward County, after team losses are covered

I'm sure there's lots of ways the Panthers can cook the books to make sure that they keep their hands on that sweet expansion dough.

[The Unknown Poster]

Another city council getting duped by Slick Gary and his cronies.  It wont be long before the city is regretting this decision and begging the team to leave.

[johnzo]

The sooner the league starts moving these fringe teams the better. It got to bother the NHL to see buildings at 60-70 percent capacity.

There's lots of reasons why the NHL is so committed to propping up its marginal teams.

For one, having a presence in every corner of the USA helps juice American TV deals -- and it's working. The 2011 NBCSN deal is worth $200M annually, triple the amount of the old US TV contract.

For two, if the Panthers were to sell to Quebec City or Las Vegas or Seattle interests tomorrow, NHL teams would lose a potential half a billion dollars in free expansion money. Roving franchises really hurt the market for expansion teams.

For three, in the case of Arizona and Florida (and previously Columbus) taxpayers can be made to prop up these weak sisters. More money for nothing.

Who cares about half-full arenas when the bottom line in the NHL has never been better? If I were an NHL owner, I'd love Gary Bettman.

[Noeller]

Saw someone post a Panthers ad on FB today where they're offering a ticket to the game, $15 voucher for concessions, and tshirt for $29. Just desperate to get people in the door...

[The Unknown Poster]

The idea of the NHL needing to protect itself from relocation is sort of a red herring since other leagues do it and those other leagues are bigger and wealthier than the NHL.  Those are leagues wants teams in places they will succeed.

 

Its different in that the NHL doesnt have a massive US TV deal, certainly.  But this came up during the Coyotes debacle.  And the talk was, is a Network stupid enough to see "Phoenix" and think that it opens them to 3 million people or do they look at the ratings and realize Swift Current gets more viewers for hockey than PHX?

 

I dont know how network people view those things but I would think 20 years of evidence would give them a pretty good idea of the value of the Coyotes on a national TV contract and it cant be more than what they'd get on additional revenue in Canada or a better US market with more viewers.

 

The NHL relies on bail outs by local government and taxpayer funded arenas.  They fought so hard in Glendale because the NHL convinced Glendale to build the arena and help fund the team and if they let the team leave, it would impact their future staring contests with other local councils. 

 

The NHL is obviously very good at convincing local governments to chip in cash.  They wont relocate a team until that is exhausted.  Its truly amazing that they allowed the Thrashers to exist in a scenario that was not favorable to them at all.  They had no options in Atlanta and were lucky Winnipeg was a soft landing spot.