Daniel Kaplan of Street and Smith's Sports Business Journal is reporting that the Florida Panthers are in negotiations to merge the team, an arena management company that operates the BankAtlantic Center in Sunrise, FL, and the rights to the real estate surrounding the arena to publicly traded Sports Properties Acquisition Company (SPAC). The value of the deal is estimated at $230MM, but the real payoff to SPAC is a potential mixed use development that is planned for property around the arena. SPAC went public last year, raising $215MM in an Initial Public Offering, and the terms of the offering were that SPAC had to close at least one deal by January 2010 or the funds from the IPO would be returned to the shareholders. Initially, SPAC had planned to leverage the funds from the IPO to do deals in the $1BB range, but the collapse of the credit markets has quashed that possibility. Currently, only the Green Bay Packers have a form of public ownership in the big four sports leagues, although other teams are owned in part by other large public companies.
Although Broward County owns the arena, Sunrise Sports controls the bulk of the facility's revenue. The arena sits on 139 acres, currently used for parking only. The planned mixed use development is proposed by Sunrise Sports and is called The City of Oz, although development has not begun. In addition to hockey, Sunrise Sports books around 200 events a year at the arena.
The board of SPAC includes Tony Tavares, who moved the Montreal Expos to Washington, D.C. He serves as CEO of SPAC. Board members include Hank Aaron and current Chairman of USA Football Jack Kemp.
There are other ownership arrangements in hockey where outside interests have a majority ownership in a hockey club, most notably Maple Leaf Sports and Entertainment where the Ottawa Teachers Pension Plan owns 58% of MLSE, the operator of the Maple Leafs, the Toronto Raptors, the Toronto Marlies AHL hockey club, and the Air Canada Centre where the Leafs play.
All of this poses an interesting scenario. The question is who calls the shots for the operation of the hockey club should this deal be consummated? As a publicly traded entity, SPAC will look for a certain return on its investment. Ostensibly, this will come from the potential development around the arena, but we all know how the real estate market is performing today, and south Florida is especially weak. If the development doesn't come to fruition, the return on investment comes from arena revenues and the revenue generated by the Panthers hockey club. The Panthers haven't made the playoffs since 2000 and have struggled at the gate, ranking 24th out of 30 teams this past season in attendance. So who makes the call about hockey operations? What about contracts? Will it be the GM, or will it be the board of SPAC? All of this points to an interesting scenario playing out in south Florida.
As the economy continues to wither, I would expect to see other ownership groups struggle and look for options to either shore up operations or sell. Phoenix and Montreal are currently in play; Tom Hicks, the owner of the Stars, has run into dire financial straits. Predator fans should be thankful for stability in our local ownership group.