Florida Panthers reassure fans they’re not moving … yet

From the Florida Panthers veiled threat department:

As we close in on the one-year anniversary of our ownership of the Florida Panthers, we want to reiterate our commitment to Broward County, South Florida and our Panthers fans and business partners. As we said at the press conference when we bought the team, we view ourselves as stewards of the team for the community and our plan is to build an organization that makes South Florida proud and to win the Stanley Cup in South Florida. Despite media speculation to the contrary, we have no plans or intentions to move this franchise…
It is no secret that the Panthers and BB&T Center have lost tremendous amounts of money over the last dozen years. We are working hard to address this situation, which we believe we can do with the support from our loyal fans, our business partners, the business community and our community-at-large.

In other words, “Only you can help us meet our goal of sticking around.” The only thing missing is the offer of a tote bag.

[Also, the Panthers aren’t actually losing money. But shh, don’t tell anyone, gotta keep those phones ringing!]


11 comments on “Florida Panthers reassure fans they’re not moving … yet

  1. The way I read it, the Panthers are losing money. The fact that another company owned by the same owners is able to rent out the arena (that the county stupidly built for the team and then leased to the operating company at a ridiculously low rate for a 30 year term) and make money on non-hockey events may be unfortunate, but it has nothing to do with the operation of the hockey team. The two companies may seem related because of the nature of the arena management contract, but I’m quite certain they will be completely separate from a legal standpoint. The county should have seen this particular loophole coming a long time ago.

    If the owners of any franchise own other profitable businesses, they shouldn’t be required (or expected) to fund losses of their sports (or other) businesses ‘just because’. They may choose to do so (for tax or other reasons), but they aren’t required to. Imagine your 401k includes revenue earned from share ownership in one company in particular. Should that revenue be used (with or without your consent) to cover losses in another company you own shares in? Not likely.

    The Florida Panthers need to be able to generate enough revenue on their own to support operations. If they can’t, they should disappear. Unfortunately, in such an instance the arena related debt will stay with the taxpayers of Broward county I’m sure.

  2. Except that the Panthers would likely be making money (or losing less) if their arena-operating arm lowered their rent.

    I haven’t seen the numbers involved, but this reminds me a lot of when Wayne Huizenga owned the Marlins and Pro Player Stadium, and charged himself such a high rent that the Marlins always lost money and the stadium always turned a profit. It was just bookkeeping (and a way to excuse himself from his periodic fire sales) until he sold the team to John Henry, and then suddenly it actually made a difference who was getting the profits.

  3. Is this really about arena revenue, or a desire to have a foothold in the Miami metro television market? This is the only plausible reason for the NHL’s southern strategy at this point, which has only admitted failure in Atlanta so far. Why else would the NHL insist on franchises in Phoenix and south Florida?

  4. I’m pretty sure it’s about Gary Bettman getting tired of having people ask him at parties, “So, are you still working for that Canadian sport?”

  5. So i rent room in my house to myself and complain that me the tenant is losing big time. Meanwhile me the house owner is making money.

    To complete the analogy, the city pays my mortgage.

  6. Fair point, but as you noted we don’t know the actual numbers. Do we even know if the Panthers pay to use the arena that their “sister” company managers (or might be paid to manage?)

    In a business environment in which some teams are paid to play in arenas that the public paid to build for them, while others not only don’t have that benefit but had to pay for their own arena… how do we determine what is a fair market rent?

  7. The Panthers pay $4.5m a year in rent to the county (to repay part of the arena bonds), plus operating costs:

    http://www.fieldofschemes.com/2014/01/10/6584/florida-panthers-exec-says-free-arena-is-nice-but-free-rent-would-be-even-nicer/
    http://deadspin.com/the-florida-panthers-want-broward-county-to-buy-them-a-505711613

    So they got a free arena from the county, in exchange for $4.5m a year in rent payments. The owners chose to put the $4.5m a year in costs on the Panthers’ books, while the revenue from the concerts and whatnot that they use the arena for go on the arena side of the ledger. This is bookkeeping games.

  8. DGA, I think you’re bang on. When the league was propping up the Coyotes, they did it for what? 3 years? The coyotes were losing an estimated 25 million a season? That’s $860 000 per team. To an NHL club (especially the Toronto’s, Montreal’s, NY’s and Philly’s) that is nothing.

    Gary Bettman still wants an NFL style US TV deal.

  9. “Gary Bettman still wants an NFL style US TV deal.”

    More like an NBA style US TV deal that he wants.

    Why did the Panthers move to and build a new arena at the time in Sunrise, Florida back in 1998? Why didn’t the Panthers stay in Miami and move into the American Airlines Arena with the Heat in 2000?

  10. Thanks for the rent number Neil.

    It may or may not be a bookkeeping game. $100k per game is not a bad price to play for a place to play hockey (hockey being one of the sports it’s hard to play in a parking lot, as the NHL proved a few years ago). I would agree that you’d expect the concert business to kick in something toward the rent… but it may be that there are sound NHL reasons for having the Panthers pay all that cost (like it can work for them when it comes to revenue sharing calculations as an allowable/refundable cost – something it couldn’t do for a concert business, for example).

    If the Panthers were on the hook for paying the ushers and security during non-hockey events as well, I’d agree with you. I’m just not sure that the club’s payment of the full rent amount is outrageous. A concert business could be run elsewhere (perhaps a smaller and less profitable business, but it could be housed elsewhere). The actual amount the Panthers pay in rent does not seem unreasonable to me. Compared to the teams that are paid to play in their free buildings, it’s not as good. But operating costs for the clubs that own their own buildings can run almost double what the Panthers are paying (in Canada, just the property tax bill for some of the arenas is double that amount). I’d say what they pay is in the ballpark.

  11. Jim/Daniel:

    I’m sure you are aware that Bettman has a new tv deal from NBC. It pays $2bn… over ten years. This was touted as the NHL hitting the big time in hockey circles, but in reality it is nothing of the sort. It’s a healthy increase from the $60-100m the league was getting from US broadcasters annually before (sometimes a lot less than $60m…), but it amounts to less than $7m per team per year. Their new Canadian tv deal pays 2.5 times that amount into league coffers.

    The real bad news for the NHL is both deals include rights in all media, so there will be no MLBAM type windfall for professional hockey clubs should digital broadcasts/streaming become a big hit among fans. Those revenues will accrue to the broadcasters and not the leagues. Bettman’s member clubs did need the revenue infusion from these deals, but they do limit the NHL’s money making ability going forward (unless they plan to direct broadcast using analog media, I guess….)

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