Lightning's finances called worst


©St. Petersburg Times, published December 3, 1997

TAMPA -- The Tampa Bay Lightning may be bad on the ice this year, but financially, it's the worst professional sports franchise, according to Forbes magazine.

In its Dec. 15 edition, Forbes says the hockey team has the worst debt-to-value percentage of any franchise in any sport. The team is worth about $75-million, and has debt of about $177-million, according to the magazine. That makes its debt equal to 236 percent of its value.

The Forbes rankings were based on research done for the magazine by the Coopers & Lybrand accounting firm and others. They are part of a bigger story, "Fields of Debt," that details how professional sports team owners are counting on new stadiums to bail them out of debt.

The story describes the Lightning's deal for the Ice Palace as a bad one for the team. That's because it won't result in any substantial revenues for the Lightning until after the arena debt is paid down after 30 years.

It's no secret that the Lightning has been skating on thin ice financially, in part because of its lousy stadium deal.

Its Japanese owners, Kokusai Green Co., have put the team up for sale partly because they are tired of spending money on it. In past years, it has been late paying vendors and was even late paying state sales taxes and federal payroll taxes.

But Paul Davis, attorney for the Lightning, said the Forbes estimates aren't accurate. Even including internal debt owed to Kokusai Green, Davis said, Forbes overestimates the team's debts. "That $177-million number is way off," Davis said, without giving the actual debt owed by the team. The Lightning has refused requests by the Times for detailed financial statements.

Davis also doesn't agree with the estimated value of the team, although he wouldn't disclose the sales price its owners are seeking.

New National Hockey League franchises, he said, go for about $85-million. And one sports team appraiser recently said the Lightning would likely sell for $125-million to $175-million.

Even so, estimates by another financial magazine, Financial World, placed the Lightning's value at only $64-million last year.

"I don't put any credence in those values -- they're usually made by people who don't buy or sell anything," Davis said. "We'll all find out what the team is worth when it sells."

The NHL's Ottawa Senators was the next-worst sports team financially on Forbes' list, with debt equal to 196 percent of its value, followed by baseball's San Francisco Giants (164 percent), hockey's Boston Bruins (130 percent) and baseball's Milwaukee Brewers (115 percent).

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