Florida sports business: Hockey power play
Tampa Bay Lightning owner Jeff Vinik has plans for his team -- and downtown Tampa.
On the hockey operations side of the franchise, the Lightning haveinvested heavily in scouting and player development. Allan Walsh, a player agent whose clients include prized Lightning rookie Jonathan Drouin, said a member of the Lightning staff made contact with Drouin three or four times a week last year while he played for a junior team in Halifax, Nova Scotia, providing guidance for everything from training to nutrition to education.
“From the moment a player is drafted into the organization, there is a commitment to their continued development that is probably at the top of the league,” Walsh says.
Prioritizing internal development is smart for off-the-ice reasons, too. Under the terms of the league’s collective bargaining agreement, rookie salaries are strictly capped for the first few years and players usually aren’t eligible for unrestricted free agency — when they can market themselves to all 30 teams, driving salaries higher — until they are 27 or have played seven seasons.
Those cost savings will be important because the team will have to spend an enormous sum within two years if it is to keep Stamkos, the team’s captain and by far its biggest star. Stamkos will be an unrestricted free agent when his current contract, which pays him $37.5 million over five years, expires in two years. The two sides can sign a new deal as early as July 1.
Yzerman said at the start of the Lightning’s training camp this year that the team had yet to begin negotiations with Stamkos’ agents but that the team hopes to get a deal done by July 1 or soon after. “Obviously, it’s a priority and it’s our hope that we get him signed to an extension,” he says.
One challenge for the Lightning will be ensuring it doesn’t handcuff itself too much with a new deal for Stamkos — who will almost certainly receive an eight-year contract, the maximum allowed in the NHL’s collective-bargaining agreement for a player re-signing with his team — so it can still adequately fill out the roster around him. Negotiating with a franchise player like Stamkos is “quite complex,” says Stamkos’ agent, Don Meehan. “It involves a great deal of strategic planning, a great deal of sessions, all kind of information and understanding of the CBA.”
An eye to the future
With the team’s finances stabilizing and its on-ice performance trending up, the Lightning are now turning their attention to other projects. That includes developing the land around the Amalie Arena, which might ultimately prove to be the most lucrative opportunity that Vinik has with the Lightning, says Ron Campbell, who was the Lightning’s president for a decade under Palace Sports.
“Whether or not he’ll ever make money on a day-to-day basis with the team, it does allow him to make other investments,” says Campbell, who now works for Seminole Financial Services near St. Petersburg. “It gives him fronts to other business opportunities, and that’s maybe where he’ll get rewarded.”
The team has also begun trying to address one of its longestterm challenges. This summer, the Lightning hired Jay Feaster, who was the general manager of the team for its Stanley Cup run but had been out of the organization since 2008, to fill a newly created position of executive director for community hockey development. Feaster’s responsibilities include managing outreach to youth and high school hockey programs in hopes of increasing participation.
“One thing that’s near and dear to all of our hearts that we’re not as good at as we should be is community outreach, especially with respect to schools and hockey rinks,” Vinik says. “Jay’s mandate is to make us as good as anybody in the NHL in terms of community outreach and, frankly, to get a stick in the hands of every kid who wants one in this area.”
Getting more Florida children interested in hockey at a young age is vital to fully stabilize the franchise in a market where kids don’t grow up playing on homemade rinks in their back yards.
“They’ve still got a lot of work ahead. They know that. It’ll never stop,” says Waddell, the Carolina Hurricanes president. “But I think now, especially when you look at the Southern markets,” Tampa is becoming more of a hockey market.
The Florida Panthers are hoping a casino could be a lifeline for the perpetually cash-strapped franchise — but it may turn out to be a losing wager.
A little over two years ago, the parent company of the Florida Panthers NHL franchise, Sunrise Sports & Entertainment, signed an agreement with Las Vegas-based Boyd Gaming to develop a casino resort on land next to the BB&T Center, where the Panthers play.
Executives with the two companies have said they envision a midsize resort with a few hundred hotel rooms, about 50,000 square feet of meeting space and slot machines and table games.
The two companies have since joined a horde of other gambling interests urging state lawmakers to legalize casino gaming in Florida. The Panthers — a team that loses $100,000 a day, according to its owners — wrote a $100,000 check to the Republican Party of Florida just a few months before the start of the 2014 legislative session. A joint venture set up by Boyd Gaming and Sunrise Sports, dubbed “BYDSSE Gaming LLC,” has paid a lobbyist about $60,000 to work the Legislature over the last 12 months.
But the Legislature has not acted, and time may be running out. The Panthers’ contract with Boyd is set to expire soon after the 2015 legislative session ends in May, according to two people who have been briefed on the deal, and it’s unclear whether they’ll renew it if the Legislature hasn’t acted by then. Representatives for the Panthers and Boyd Gaming both declined to comment.
It’s clear that the Panthers must do something. While the Tampa Bay Lightning have stabilized under owner Jeff Vinik, the state’s other NHL team remains one of the most unsteady franchises in the league. The most recent turmoil includes the departure of CEO Michael Yormark, who resigned in March after 11 years with the team to join rapper Jay Z’s Roc Nation Sports agency. In June, the team laid off about 25 employees, according to a report in the South Florida Sun-Sentinel.
The Panthers franchise, sometimes mentioned as a candidate for relocation to Quebec City, was sold last fall for a reported $250 million to Vincent Viola, the founder of high-frequency trader Virtu Financial, and Douglas Cifu, Virtu’s CEO. The new owners are hoping to land arena-lease concessions and other public help worth about $80 million from Broward County.
“Vinnie and I have both publicly said that we are here to make this franchise work in Florida,” Cifu said in an August interview with Fox Sports Florida. “That being said ... the arena and the team have lost a significant amount of money year over year for the last 10-plus years, and the current business model is not sustainable.”
Jeff Vinik bought the Tampa Bay Lightning in 2010 for $110 million. League and team executives say Vinik deserves credit for turning the team around. The former hedge fund founder has invested millions in the team and assembled more than 20 acres of prime real estate around the Lightning arena in downtown Tampa.