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As Credit Crunch Hits, Purchase of Lightning Drags Out PDF Print E-mail
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Written by Maury Brown   
Wednesday, 02 April 2008 20:08
Tampa Bay LightningIn a sign that the credit crunch has hit the sports industry, the sale of the Tampa Bay Lightning has been stalled. Now nearly four months since the pending sale, Hollywood producer Oren Koules has yet to close the deal. As reported by the St, Petersburg Times:

There have been all kinds of rumors on why Koules hasn't closed the $200-million purchase from Palace Sports & Entertainment that includes the team, the St. Pete Times Forum lease and 5½ nearby acres. He needs more investors. The group can't come up with 50 percent of the purchase price before financing as the NHL prefers.

But interviews with several investment bankers familiar with sports lending indicate the holdup likely is the worldwide credit crunch tied to the subprime mortgage crisis.

"There are a lot of places in the last three to six months that have shut down all lending," Pagliuca said. "Even for a hockey team, as good as the collateral might be, in this environment, they're not loaning."

"Even if you have the 50 percent, you still have to go out and find financing," said Brian Marler, senior vice president of the media, sports and entertainment group at Houlihan Lokey, a Los Angeles investment bank. "Due to the credit market, it may be tougher to get."

As to how the finances of the NHL in general are at this time, the report continues to say that NHL gross revenues should approach $3 billion this year, $900-million more than 2005-06. With the increase in revenues, the salary cap could be raised from $50 million to $56 million “with a minimum payroll of at least $40-million.”


Maury Brown

Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is contributor to Baseball Prospectus, and is available as a freelance writer.

Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.

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