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Potential Florida Panther Sale Kept Out Of Mainstream Media
by PuckStopsHere on 11/14/09 at 11:57 AM ET
Comments (7)
Alan Cohen led a group of Florida businessmen in purchasing the Florida Panthers from Wayne Huizenga of Blockbuster Video fame in 2001. Since that point, the Panthers have been one of the have not teams. They have failed to make the playoffs during Cohen’s ownership. According to Forbes Magazine the Florida Panthers have the fifth least value in the NHL and faced the second largest operating losses last year (beaten only by the Phoenix Coyotes). As a result, Alan Cohen decided he wanted out.
Over the summer, Cohen agreed to sell the team to Sports Properties Acquisition Group. This is a publicly traded company set up with the purpose of buying a sports franchise. Should they fall to do so by the end of the year (which appears likely), they will be dissolved and money will be returned to shareholders. The sale was to be for $240 million and included the Panthers franchise, the BankAtlantic Center where they play and some surrounding real estate.
The NHL turned down this purchase lacked a primary owner with a substantial equity stake. In other words, when the Panthers lost money it was not clear who would pay it. The NHL could be stuck with a team that was abandoned by ownership.
Alan Cohen was tired of paying for Florida Panthers losses and he decided to get out. He is leaving the team to his major partners in his 2001 purchase (Cliff Viner and Stu Siegel). Probably the deal is not for a significant amount of money. It is Cohen getting out and leaving things to the partners that remain. The partners have little choice but the either buy him out and assume any losses on the team or to give up their ownership and lose any equity they have in the Florida Panthers. These men are both Florida businessmen who probably never had any desire to be more than minority partners in a local ownership group of an NHL team. With the majority partner departing, they are forced to accept a bigger role than they ever wanted in an effort to not “lose their shirt” in this investment. This is remarkably similar to what happened with the Phoenix Coyotes. It was Steve Ellman and some minority partners (including Wayne Gretzky) who bought the Coyotes in 2001. When Ellman was tired of financing the team, he bowed out and was bought out by minority partner Jerry Moyes in 2006. Moyes was never interested in being the majority owner of an NHL hockey team, but he found himself in that position as he attempted to save his investment. By 2008, Moyes was unable to finance the team and that led to the past summer’s bankruptcy and eventual sale to the NHL.
This is one way that the NHL has found “money marks” - a pro wrestling term for people who have spent their savings to try to keep failing wrestling promotions alive. The NHL makes a profit while depleting the savings of some of the weaker franchise owners - often people who had no desire to be majority owners. They were intending to be minority partners in local ownership groups, but circumstances found them thrust into majority positions when the people above them abandoned the team. This leaves the NHL with weak teams owned by weak reluctant owners. There is almost no way for that team to succeed in those circumstances.
If you check most mainstream hockey media sites (i.e. tsn) you will find no mention of the Florida Panthers potential sale. This isn’t the kind of story the NHL wants to see promoted. If this pattern of thrusting reluctant minority owners into majority positions of weak franchises is understood by potential investors, it could hurt the other weak NHL teams. The NHL is looking for minority partners to help Oren Koules run the Tampa Bay Lightning. How long until Koules gets out and the minority partner is left as the sole owner? How about other local ownership groups such as Nashville? Should those minority owners be feeling a bit anxious if they do not want to be stuck financing the losses of the team as a majority owner?
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Tags: Alan+Cohen, Florida+Panthers, Phoenix+Coyotes,
Comments
Cohen, though no longer Managing Partner, will retain a large share of the team. Viner and Siegel are not completely buying out Cohen, only half of his share of the team. And from this part of a story in the Miami Herald, it certainly appears that they didn’t need to put a gun to the head of Siegel for him to want into the Panthers.
Siegel played hockey at the University of Pennsylvania for four years and plays in men’s leagues in South Florida.
In the July 2008 news release announcing his involvement with the Panthers, Siegel said, ``It’s literally a dream come true, as I have aspired to join the ownership group of an NHL team for many years.’‘
http://www.miamiherald.com/sports/hockey/story/1309012.html
Posted by Georgia Panther from Buford, Ga on 11/14/09 at 05:09 PM ET
While I commend you for finally linking outside your own work, I believe your main argument is completely flawed:
If you check most mainstream hockey media sites (i.e. tsn) you will find no mention of the Florida Panthers potential sale. This isn’t the kind of story the NHL wants to see promoted. If this pattern of thrusting reluctant minority owners into majority positions of weak franchises is understood by potential investors, it could hurt the other weak NHL teams…
Should those minority owners be feeling a bit anxious if they do not want to be stuck financing the losses of the team as a majority owner?
No league wants to advertise struggling franchises. To admit financial failure in a franchise could lower the market value of other teams. The NHL under Bettman has expanded into some questionable places. Despite a booming economy, many expansion teams have lost money annually since inception. And other owners are going to protect their business interests and not advertise financial problems.
Potential owners should be aware that most pro sports teams do not make much, if any, money. It is the pursuit of fame and glory that many become owners in the first place. As a financial venture, sports franchises are very high risk. If you don’t want to lose your shirt, don’t get involved.
Regarding your MSM criticism, a detailed Google search reveals quite a few MSM articles this past year. Including National Post, Globe and Mail, Post-Tribune, and various other news sources.
In the years preceding the current economic crisis, most MSM outlets have undergone massive cutbacks in both personnel and budget. Fewer resources are being devoted to sports, and news in general, worldwide.
The drama in Phoenix was the biggest hockey story of the year, and one of the biggest in all pro sports. Judge Baum’s decision would affect all North American sports leagues. MLB, NFL. and the NBA all made legal submissions in the case.
With fewer resources in news, does it not make sense that they would be spent covering the story in Phoenix? The MSM would rather spend resources where there is fire (Phoenix) than where there is smoke (Florida). I can’t blame them. Apparently you can.
Posted by VooX from Behind the Bar in the Hasek Club Car on 11/15/09 at 04:02 PM ET
Potential owners should be aware that most pro sports teams do not make much, if any, money.
Potential owners should be aware that most pro sports teams do not make much, if any, PROFIT.
clarification
Posted by VooX from Behind the Bar in the Hasek Club Car on 11/15/09 at 04:06 PM ET
You know the grades. C- on this one.
Voox, i pointed that out in the prior post, which he deleted.
Posted by moore00 from Columbus, OH/Grand Rapids, MI on 11/15/09 at 04:27 PM ET
Moore00
Your first comment was deleted as it is a clear example of a post meant to inflame and to troll and not to discuss the hockey topics on hand. You were warned of this behavior via your email. The fact you continue to press the issue implies either that either you are attempting to flaunt the rules and are willing to risk punishment or it implies that your email in your profile is inactive/rarely checked and you are unaware of the warning (I will give you the benefit of doubt and assume the second).
If you would like to discuss this further please email Paul and/or myself (addresses can easily be found on this site). Otherwise, please return to commenting on the issues brought up in the posts and refrain from comments that are clearly intended to be inflammatory. Can you also please chage your email to a more actively checked one so that iif there are further issues they do not have to be dealt with in such an open forum.
If you satisfactorily respond to me via my email, I will delete this comment…
Posted by PuckStopsHere on 11/15/09 at 04:44 PM ET
Maybe you should pay attention more and you would have seen news in the media. It’s been talked about.
From Nov 6.
Posted by John Wensink on 11/18/09 at 10:58 AM ET
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aww, you deleted my well thought out post.
Posted by moore00 from Columbus, OH/Grand Rapids, MI on 11/14/09 at 04:28 PM ET