After a profitable season, the NHL champ still seeks help from Tampa and Hillsborough County.
By JEFF HARRINGTON
Published September 10, 2004
The Tampa Bay Lightning released a rare financial snapshot Thursday, then gave two very different diagnoses of the financial health of the Stanley Cup champs.
Short-term, the team's romp through the playoffs added $14.1-million to the bottom line, giving the team its first operating budget profit, at $3.6-million.
But the long-term picture is far less rosy, and officials with Palace Sports & Entertainment Inc., which owns the Lightning, warned that escalating player salaries and other fiscal challenges mean future operating losses still loom.
Team officials hope the glimpse into their finances will lead city and county leaders to consider tax breaks and other aid.
"We've turned the corner and made a small amount of money," Lightning president Ron Campbell said, adding that the team still wants to come up with a new financial operating model that "allows us to be competitive and viable for years to come."
Over the past five years, the team and the St. Pete Times Forum, which is also used for concerts and other events, have racked up $53.9-million in operating losses. Add in noncash losses from depreciation, amortization and interest expense and the five-year loss total zooms to $141-million, $5-million of it in the most recent fiscal year.
Campbell said there is no guarantee the team will be bailed out again by a postseason run that included 23 profitable home games, let alone repeat as champs.
"It's a fool's bet. You can't budget the playoffs," he said. "We won, but to sustain is very difficult."
There also is no guarantee the players' union and the NHL will break a salary dispute that threatens the start of training camp. And if the season goes forward, the Lightning projects its players' salaries will jump from $33-million last year to up to $49-million this year.
Put it together, the Lightning says, and it shows that one successful season doesn't negate the team's need to "fix" its financial woes, either through tax relief or other aid.
That desire explains why the normally private Palace Sports chose to divulge any financial details. Owned by Detroit billionaire Bill Davidson, who also owns the NBA champ Detroit Pistons, Palace Sports has long been reluctant to release such information.
"The depth of what we disclosed today probably goes beyond what the company has ever done before, but we think it's worth it," Lightning spokesman Bill Wickett said.
Yet, even the one-page financial document released Thursday was limited in scope. It mingled revenues from hockey games and concerts together, along with sponsorships in both. All expenses were lumped into a single line-item.
Still, Palace Sports is hopeful the numbers back up its case for a new fiscal partnership with the city and county that involves greater financial support.
Another key part of their case is the argument that government officials never treated the Lightning with as much respect as other sports teams. Most teams, they point out, have at least a share of parking revenue, unlike the Lightning. And Tampa Bay's other recent championship football team, the Buccaneers, doesn't have to pay property taxes on its stadium like the Lightning does.
Lighting chief operating officer Sean Henry stressed that the team never had a 30- or 40-year deal with the city and county ensuring its long-term presence here.
"This is not negotiating a deal," he said of the latest meetings. "It's finishing the deal."
Last year, Turnkey Sports, a consultant hired by the county, drew up a draft proposal of what a 30-year deal with the Lightning could include. It listed more than $10-million a year in tax relief and subsidies, among them:
* Transferring ownership of the Times Forum to Hillsborough County so Palace Sports wouldn't have to pay property taxes. (The team won a sharp reduction in its property taxes, but the county has appealed that court decision.)
* Letting the company keep any revenue from ticket surcharges.
* Giving Palace Sports a sales tax rebate, money from a higher tourism tax and revenues from advertising displays throughout the Channelside district as well as inside the Tampa Convention Center.
* And possibly even imposing a surcharge whenever patrons throughout Channelside buy a beer or a burger, funneling part of the take to Palace Sports.
The draft, which the county and Palace Sports say was only meant to be a starting point in talks, never got any traction.
But this time, the Lightning is making its case to public officials as a popular, NHL championship team that has drawn new fans to its sport and new visitors to the emerging Channelside district on the outskirts of downtown Tampa.
Mike Merrill, director of debt management for the county, said he saw few surprises in the brief financial report, which was audited by PricewaterhouseCoopers.
"We would have been surprised if they hadn't have made money this season," he said.
Merrill said there have not been any sit-downs with the Lightning since before the playoffs. "Now that the Lightning are releasing this into the public forum," he said, "I'm sure that things will begin to happen again."
Talks can't happen soon enough for Palace Sports owner Davidson, who has expressed frustration over delays.
Asked Thursday whether the team may decide to pull out of Tampa at some point if it cannot reach an agreement, Campbell said, "I think you have to seriously consider it."
