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    Report: Hockey owners lost $32.7-million

    The Lightning is on a roll, but a consultant says both the team and Times Forum operations are floundering financially.

    By ALICIA CALDWELL and JEFF HARRINGTON
    © St. Petersburg Times
    published April 23, 2003


    TAMPA -- The group that owns the Tampa Bay Lightning lost $32.7-million on its hockey and arena operations for the fiscal year ending last June, with total losses eclipsing $100-million since 1999, according to a new consultant's report.

    The consultant, hired by hockey team owner Palace Sports & Entertainment, outlined in detail losses that far outstrip any figures Palace Sports officials ever have publicly claimed.

    Palace Sports downplayed any discrepancies, saying that past discussions about losses have focused on cash losses, and the new, detailed report includes such items as depreciation, amortization and interest costs.

    The key issue, team officials said, is that the Lightning needs financial help to stay viable.

    "If it's $20-million (in losses annually) or $40-million, it's not a good situation," said Scott McLaren of Hill, Ward & Henderson, which represents the Lightning.

    The big losses seem to lend support to Palace officials, who are trying to extract financial concessions in lease renegotiations with Tampa and Hillsborough County, and who also want to reduce or erase the St. Pete Times Forum's property tax bill.

    The report dated April 11, one of two recently filed with the county Property Appraiser's Office, was generated by Stout Risius Ross, a Chicago financial advisory firm. It is expected to be ammunition in the court battle between Palace and the county over the valuation of the St. Pete Times Forum, a dispute that is scheduled to go to trial June 2.

    The other report, by Integra Realty Resources, based in Fort Myers, claims the Times Forum property was worth $21-million in 2001, and $25.5-million with a National Hockey League franchise.

    Will Shepherd, general counsel for the property appraiser, said the county and Palace officials have consistently agreed that the land under the Times Forum is worth about $17.5-million. That would mean the building is worth only $3.5-million, a figure Shepherd called laughable.

    The Integra report estimated it would cost $145-million in 2001 to build a replacement for the Times Forum.

    "That's an interesting stance to take when you're also going to the county and saying, 'We're a benefit to the county and we're worth all these concessions,' " Shepherd said. "Then, they're basically saying, 'This $150-million building you gave us -- that's not worth anything.' "

    The new disclosures conflict with a report last fall by Hillsborough County government consultant Turnkey Sports, which, in a rare glimpse into Palace Sports' finances, said the Lightning owner lost $21-million in its fiscal year ended June 30, 2001. About $18-million of the loss was attributed to the hockey team and $3-million to the arena operations.

    In contrast, the consultant for Palace Sports, Stout Risius Ross, indicated the Lightning owner lost $40.8-million on its Tampa operations that fiscal year.

    Mike Merrill, county director of debt management, backed the validity of the Turnkey report.

    "I don't know how they got $40-million, and I don't particularly care. I'm satisfied with the work we've done," he said. "We're more comfortable with a more conservative loss anyway."

    Lightning president Ron Campbell said his previous comments about team finances focused on cash losses only. Campbell said he expects a loss of $14-million this fiscal year, down from a $16-million loss the year before. He places total losses at about $50-million since Palace Sports bought the team in 1999.

    "I think it's safe to say that the numbers often are questioned," Campbell said Tuesday. "'Paul McCartney sold out. You must be making money. You've got Elton John and Billy Joel. You must be making money.' And we've repeatedly told people that's not the case.

    "I think this just reinforced that we've been truthful," he added. "We've at least not misled anyone that we are doing better than we've said publicly."

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