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Jeff Vinik Selling the Lightning -- Unthinkable? Not So Fast

May 13, 2019 - 9:00am
After only two home playoff games, Amalie Arena stands silent
After only two home playoff games, Amalie Arena stands silent

Jeff Vinik selling the Tampa Bay Lightning would never enter the mind of most local hockey fans, but the idea is not at all far-fetched.

In fact, over the next 15 months it is rated a 50-50 proposition to those paying close attention to the machinations and business travails of the former hedge fund manager.

At the end of 2018, Forbes Inc. tagged the Lightning with a $445 million net worth -- a tad extravagant, but let’s go with it. Forbes used four factors in its value estimate: revenue sharing from the NHL, market size, arena (though owned by Hillsborough County) and brand.

Not a bad investment for Vinik, who purchased the distressed franchise for $93 million in 2010, according to Forbes. Media reports at that time said Vinik paid anywhere from $110 million to $170 million.

Forbes and other publications place Vinik’s net worth at between $515-550 million. Regardless of which figure is used, Vinik personally is as highly leveraged as his $3 billion downtown development, Water Street Tampa.

Vinik’s two mansions -- one in South Tampa, the other a 23,000-square-foot, monstrous blight on Sarasota’s St. Armand’s Key -- are valued at between $25-30 million total. Now Vinik’s encumbrances become even more pronounced.

Then and now: Jeff Vinik in his 30s, left, as fund manager for Fidelity. And, right, his reinvention in Tampa
Then and now: Jeff Vinik in his 30s, left, as fund manager for Fidelity. And, right, his reinvention in Tampa

The Lightning, therefore, comprise 80 percent of Vinik’s net worth. It may be a propitious time to sell the franchise, although Vinik missed the top of the market when the Lightning were embarrassed last month when the lowest seed in the Eastern Conference swept them in the first playoff round by the lowest seed in the Eastern Conference. The Lightning were a prohibitive favorite to win hockey’s cherished Stanley Cup.

Worse, he extended the contract of coach Jon Cooper whom national talking heads and half the fan base hold responsible for the Lightning’s multi-year playoff debacles. Highly regarded hockey executive Steve Yzerman left the Lightning at the close of the 2018-19 season to become general manager of the Detroit Red Wings -- another minus.

The Boston Globe said Vinik, now 60, “reinvented” himself after the Boston-to-Tampa move.

Still, with the Lightning's value at a premium and Vinik in a personal financial squeeze, sale of the franchise either this offseason or in 2020 is far from preposterous.

Proceeds of the sale could help Vinik both personally and with Strategic Property Partners, his company tasked with Water Street Tampa. The development, since it was announced in 2013 with a five-year window, has experienced an ever-shifting “vision.”  No Fortune 500 company has been clamoring to relocate there.  A health-oriented grocery store, a remarkably low bar, never materialized.  Moving the financially-troubled Museum of Science and Industry from Temple Terrace to Water Street is off the table.

Vinik relied on University of South Florida cronies Judy Genshaft and Frank Morsani to relocate the College of Medicine, now dubbed Water Street’s “anchor.”  The relocation away from the USF Hospital and the rest of the campus makes no sense logistically.

Marriott International is building a hotel on Water Street but its value to Vinik is its presence more than anything tangible SPP got from the deal.

That $445 million in proceeds from a Lightning sale look more opportune than ever. And being the de facto owner of the Tampa Bay Times and a benefactor to other local media through advertising or pay-for-play, Vinik can control the message.

He can suppress the true reason for the sale and write any of several stories: he cannot devote the time necessary to maintain the level of a prized sports franchise; it’s time to pass the torch to a new owner; he has an unspecified illness. Whatever scenario he comes up with will be remotely plausible and dutifully reported by his media sycophants.

Water Street Tampa is being financed by Cascades Investments owned by Internet billionaire Bill Gates. Gates does not participate in decisions regarding loans/investments; he leaves that to his right-hand man, Michael Larson, manager of Cascades.

Larson managed bond funds for Putnam Investments, then his own fund, at the same time Vinik managed Fidelity Magellan.  Both men plied their craft in Boston.

This is how Gates characterizes the person with whom he entrusts his investments: “I wanted someone with a conservative philosophy about investing. I needed to have complete faith in the person I picked, since I didn’t ever want to have to look over their shoulder.”

Larson told Fortune magazine, “I’m not a risk taker.”  We will take him at his word.

That means Vinik must have provided sufficient collateral for the deal, meaning the entire development. Professional sports leagues prohibit owners from using their franchises as loan collateral.

That has not stopped sports franchises from filing for bankruptcy. Of the 11 sports franchises filing for bankruptcy through 2016, six have been from the NHL.  Experts say that is because hockey teams have less cash flow and their owners usually have a lower net worth than team owners in other sports.

The reasons for the bankruptcies? The majority owner has defaulted on loans, disputes between the league and the franchise, or subpar performance by players leading to poor community support. The latter two reasons would not apply to the Lightning.

Jim Bleyer, a former reporter at the Orlando Sentinel and Tampa Tribune, writes the Tampa Bay Beat blog.

 

Comments

Insiders in Hillsborough county believe he is about to go belly up. I could care less. Maybe one more yankee can go home and take a 100,000 with them.

You seem to have a hard time understanding how hotels work, because this is is just false: "Marriott International is building a hotel on Water Street but its value to Vinik is its presence more than anything tangible SPP got from the deal."

It makes sense for him to sell at this time, I guess. But that doesn't really matter to me, except that his ties to Tampa are totally related to the Lightning. What's more troubling in this article, if it's true, is the lack of vision for Water Street Tampa. What exactly is the plan? I live in Tampa and I don't have a clue. I did see the USF building that's gone up down there. A USF College of Medicine does seem a strange anchor for a project in that area. And he couldn't get a health oriented grocery store to commit? That a bit troubling...they certainly have a market in that area. Whatever happens, I hope there is a vision for the project. I would hate to see another dud like Harbour Island's no anchor "mall". I guess I'm going to go now and see what I can find out about the vision for Water Street Tampa. I sure how there it's one...And that it's a good one. They were certainly slick in in getting the fools in Tampa to vote for an increase in sales tax. That made me ill.

You actually believe him? This guy is mentally ill. Most of this is complete lies. Water Street Tampa has hundreds of million under construction right now just drive down there. The grocery is under construction too. Also, Just because the USF school was built first doesn't make it an anchor. The guy even claims they make now money from hotels they own ... which makes literally zero sense. He's a troll making things up to attack a Jewish guy because he's deeply anti-semitic. You can rejoin reality and see the Water Street Tampa the plan here: https://waterstreettampa.com/

Hahahahahahaahhahahahahahahahahahahahahahahahaha Jim Bleyer you are so insane. Go take your meds.

Number one - whodahell cares. Number two - billionaires get to do whatever their beating little hearts and their fertile little minds can conjure up.

Read it again. He’s not a billionaire. In fact, he’s highly leveraged.

He is ... not.

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