Broward County with the save and it's a beauty
County agrees to modified operating agreement with the Panthers
The Florida Panthers may have lost to the Ottawa Senators on the ice, but they won big time where it really mattered on Tuesday with the Broward County Commission voting 5-3 in favor of a $86-million financial grant which ensures the struggling franchise will stay in Sunrise for at least eight more years. The money for the "bailout" will come from tourist taxes collected at hotels and via short-term rentals.
Highlights of the Panthers responsibilities under the revised agreement (courtesy of the Sun Sentinel) include:
- Continue making $5.3 million annual debt payments toward the county's $15.3 million obligation.
- Receive $86 million from the county, or $6.6 million a year on average, but in a schedule of front-loaded payments that starts at $12 million a year. Of the total, $39 million must be used for capital expenses at the arena, $45.5 million for operating expenses like paying the electric bill or property insurance, and $1.5 million to lure a "high impact event."
- Provide an irrevocable letter of credit to protect the county's financial investment if the team defaults, files bankruptcy or relocates.
- Grant the county development rights on land surrounding the arena, where a mixed-use entertainment complex could be considered.
- Share proceeds with the county if the NHL expands between 2015 and 2021 and gives teams expansion proceeds. After the Panthers' losses are covered, the county would get the remainder of the one-time expansion payment.
- Give the county 10 percent of profits if the team, made more valuable by this new deal, were sold.
- Give the county authority to approve where the money for capital projects is spent, and authority to replace the Panther's Arena Operating Company with another arena manager if needed.
- Share profits with the county. The revenue threshold was lowered from the October proposal, to make the county's ability to receive profits more likely. Under the new proposal, if gross revenues hit $130 million the first year of the new contract, the county would get 10 percent of gross revenues above that. The threshold increases each year by $4 million, or by $5 million in years 5, 8, 9 and 10, ending with a $170 million threshold for 2025 through 2028.
- Continue paying $500,000 annually to a county tourism fund, and provides the county an arena suite, and advertising on a "dasher board" that wraps around the ice and elsewhere in the arena.
- Maintain corporate offices and primary practice facility in Broward.
- Reimburse the county up to $600,000 for expenses related to renegotiating the contract.
- Commit to use "commercially reasonable efforts" to get the NHL to award at least one All-Star Game to the arena before 2022. The NHL also would contribute $1.5 million for youth hockey development in Broward County.
- Allow the Panthers to get out of the contract in eight years if it's not working out. They'd have to give a year's notice, show losses of $100 million over seven years, and pay a termination amount. For example, if the Panthers leave in year eight, they'd pay back the full $72 million the county would have given them by then. The termination penalty decreases each year thereafter but leaves the county with enough money to pay off the debt./
In a nutshell, the Panthers get some much-needed financial relief and owners Vinnie Viola and Doug Cifu get more time to undo the past mistakes of prior regimes, which have led to widespread apathy among South Florida sports fans. Broward County gets insurance that its investment is protected in case the club tries to up and move in the short term or declares bankruptcy, like former Phoenix Coyotes owner Jerry Moyes did back in 2009 to force a sale and move to Hamilton, Ontario, leading to much legal wrangling between the franchise, the NHL and municipality. Fans of the Cats can now focus solely on the on-ice product without having to worry about the club relocating to Quebec or Las Vegas, the two cities currently in the mix for expansion franchises, or other cities like Seattle, Portland or Kansas City who may be ready to poach a troubled existing franchise if given the opportunity. Oh yeah, we will also get an All-Star Game to attend before 2022.
Cifu had this to say:
"We are humbled and appreciative of the support from Broward County," Florida Panthers Owner, Governor and Chairman Vinnie Viola said. "My partner Doug Cifu and I want to thank the County Commissioners, County Administrator and County staff for their work on this agreement. As we have repeatedly stated the Florida Panthers are committed to Broward County and South Florida. We will continue to work tirelessly to make the franchise successful on and off the ice and a valued member of the Broward County community."
NHL Commissioner Gary Bettman added his two cents:
"The National Hockey League is extremely pleased that the Florida Panthers and Broward County have agreed to work together to create an exciting future for the Panthers, their fans and BB&T Center." "This collaboration provides a terrific opportunity for a surging team and an outstanding venue to energize the sports landscape in South Florida."
While using public money to subsidize professional sports teams is always a touchy subject, this looks to be a win-win for both sides. Now that this deal is finally done, the Panthers have the stability needed to move forward and continue building a team that will do South Florida proud. A big props go out to the aforementioned Misters Viola and Cifu, as well as Executive Chairman Peter Luukko and CEO Rory Babich. This is what happens when you have committed, polished, professional executives building a bridge between team and elected officials. Lastly, thank you to the five members of the county commission who voted yes. If it weren't for you, local hockey fans might not have had a team in our backyard to root for much longer.
How do you feel about the new deal?
|Great! Happy the Cats are staying put, good deal for both sides||117|
|I'm happy the team is staying, but not the best use of public money||16|
|Don't like it: Should have let the team survive or fail on their own with no public assistance||14|