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More win-win, but still a loss

Even as the Lightning franchise and St. Pete Times Forum do a brisk sponsorship business, their owner projects a loss of $8.8-million.

By LOUIS HAU
Published March 9, 2006

TAMPA - On the northside of the St. Pete Times Forum's lower concourse, a new lounge opened in January featuring wood-panel flooring, flat-panel TVs and Budweiser brews on tap.

Christened the Bud Light Blue Line Club, the lounge gives Tampa Bay Lightning fans a new place to hang out and allows a valued sponsor a unique way to promote itself. And because it is part of a renewed multiyear sponsorship pact that Anheuser-Busch signed with the Lightning in September, it pulls in more revenue for Palace Sports & Entertainment, the owner of the Lightning and Times Forum.

"This is an example of us trying to create a win-win for us," said Bill Wickett, senior vice president for communications of the Lightning and Times Forum.

If the defending Stanley Cup champions have struggled at times on the ice, Palace's operations at Times Forum appear to be doing pretty well off the ice.

Lightning home game ticket sales are at record highs. Times Forum, which hosts the Tampa Bay Storm arena football team, concerts and other events, continues to rank among the world's busiest venues of comparable size.

And while the Lightning's sponsorship revenues for the fiscal year ending June 30 are expected to dip slightly from their team-high levels during the 2003-04 championship season, most of that can be blamed on the National Hockey League's untimely lockout, which canceled the 2004-05 season and didn't end until some would-be sponsors had reached spending decisions for the year.

Nonetheless, Palace is projecting that the Lightning and Times Forum's operations will post an operating loss of about $8.8-million in the fiscal year ending June 30, compared with operating income of $3.8-million reported during the 2003-04 season, which included $14.1-million in playoff income.

Palace anticipates losing money this year even after factoring in projected Lightning ticket sales of $32.5-million, the highest in team history and up 50 percent from $21.6-million during the 2003-04 season. Palace's financial projections exclude the effect of possible playoff revenues.

As an NHL franchise, Palace isn't doing badly. The Lightning/Forum's annual projected fiscal 2006 revenue of $79.1-million ranks in the upper half of NHL arenas.

Forbes magazine calculated the Lightning/Forum recorded an operating profit of $8.6-million in 2003-04, fourth-highest in the NHL and more than twice the amount reported by the team. The Lightning/Forum's Wickett said Palace's audited figures included all revenues the company generated at the venue.

Palace released the financial data as part of its campaign to get a larger cut of the parking revenues generated by Times Forum events and to garner support for a proposal to allow professional sports teams in Florida to get an annual sales tax rebate that's double the size of an existing $2-million rebate.

Under the tax rebate proposal, the additional money would have to be invested back into the team's venue.

Part of the Lightning's financial challenge is its payroll, one of the highest in the NHL ($39-million, at the top of the salary cap). At the same time, its ticket prices rank 22nd among the league's 30 teams, Wickett said.

Lightning/Forum executive vice president and chief operating officer Sean Henry noted that the team generates only about $200,000 in annual parking revenues from two lots by Times Forum, which account for a small portion of the parking available. That's compared with the $5-million to $8-million in parking revenue that he said is typically generated by NHL and National Basketball Association teams, a figure that some experts dispute.

In exchange for concessions on parking, the team would be willing to commit to a binding long-term lease, something it doesn't have.

"It's so much easier to invest when everyone - the city, the county, yourself - say you're here forever," Henry said.

As Palace ramps up its public relations machinery to sell its parking and tax rebate proposals, the company continues to focus on ways to grow its sponsorship portfolio at Times Forum.

In addition to the Bud Light Blue Line Lounge, other sponsorship-linked projects completed or in the works since the Stanley Cup win have included:

McDonald's Box Office, an unusual arrangement giving naming rights to a sports venue's ticket office.

Canon Business Solutions Center, a 142-seat, suite-level luxury seating area on the north end of Times Forum, which opened the summer after the Stanley Cup win. The section features a food buffet and beverage service and marks Canon's first sponsorship deal with the Lightning.

Palace also plans to construct a new ground-floor luxury lounge this summer for Lightning season ticket holders in rows A and B by the ice and for floor-seating ticket holders at concerts.

"We want to do something to give them an area to call their own," Henry said. "Why do you send your wife flowers after you've been married for 15 years? Because you should. Just because you're sold out today (in rows A and B) doesn't mean you'll always be sold out."

[Last modified March 9, 2006, 22:46:02]