Deal to buy Lightning dead

By DAMIAN CRISTODERO
Times Staff Writer

The $200-million deal Absolute Hockey Enterprises was hoping to put together to buy the Lightning from Palace Sports & Entertainment is dead.

Palace Sports terminated the purchase agreement on Nov. 14, when Absolute Hockey did not come up with a scheduled $5-million payment. Now the investment group has splintered as the companies and partnerships owned by Coral Springs real estate developer Jeff Sherrin and former Blue Jackets president Doug MacLean are suing Hollywood producer Oren Koules for allegedly failing to make a capital contribution of $4.17-million which was to be part of the $5-million payment due Nov. 12. It also claims Koules went behind Sherrin's and MacLean's backs to make his own arrangements with Palace Sports.

The lawsuit seeks $50-million in damages. Filed in the 13th judicial circuit in Hillsborough County, it is peppered with words such as "fraud'' and "unfair and deceptive trade practices'' and "civil conspiracy.''

The other known members of the investment group are Mark Burg, Koules’ business partner, and Tampa attorney Steve Burton.

"I heard what's going on,'' Burton said. "I hope they can work it out.''

While the deal as originally announced with much fanfare in a news conference on Aug. 7 at the St. Pete Times Forum is no longer valid, don’t be surprised if a deal is resurrected at a later date with Koules or a group led by him.

Koules has a minor league hockey background and always expressed his interest most fervently. He said shortly after the sale was announced that he already had depth charts on his desk in Los Angeles. And Tom Scarritt, the Tampa attorney for Sherrin and MacLean, said he believes Koules is still in "conversations'' with Palace Sports.

But no deal will happen quickly. The justice system is slow enough. Now, an entirely new deal may have to be developed. According to Scarritt, Koules was responsible for providing $50-million cash of the $60-million the group had accumulated and had seen his projected onwership stake rise from 30 to 70 percent. He also was to be the point man to secure the loans to to complete the purchase.

Additionally, Palace Sports was going to give Absolute Hockey $30-million in "seller financing.'' to help get the deal done. In the letter from John O'Reilly, Palace Sports' chief financial officer, to Absolute Hockey that squashed the deal, O'Reilly wrote of his company's "unprecedented cooperation and assistance to the Purchasers.''

Said Palace Sports in a prepared statement: "While there is no current agreement in place to sell the team, PS&E is hopeful that those differences can still be resolved and a successful ownership transfer can take place. As it has since purchasing the team in 1999, PS&E will remain 100 percent committed to the best interest of the Lightning, it's fans and the entire Tampa Bay community, while continuing to operate the team and the St. Pete Times Forum in a first-class manner.''

The NHL, through spokesman Frank Brown, declined comment.

Who knows what will happen to the other partners?

Burg, who has said he recently doubled his stake in Absolte Hockey, also has said he was in it only because of Koules. Burton is a minority investor.

The bombshell is another twist in a process that has been anything but smooth. At the news conference announcing the original sale of the team, the St. Pete Times Forum lease and 5½ acres of adjacent land, the group said it would announce the rest of the investment group soon after.

But names were difficult to come by, and while Berg and Burton were brought on board (and revealed only after pressure from the Times), MacLean always maintained at least one other investor had yet to be named.

Absolute Hockey said repeatedly it hoped to close the deal by the end of November. There also was a Dec. 31 deadline in the purchase agreement to finalize the transaction.

It was not going to be an easy process in any situation.

Before the sale could close, the NHL's Board of Governors had to approve the transfer of ownership. If done at a Board of Governors meeting, 23 of the 30 teams would have to sign off. If it was done between meetings, by fax, 30 of 30 needed to agree; the unanimous vote because when not in the same room, governors cannot make arguments for or against.

But when the deal did not make it onto the agenda of Board of Governor’s meeting Wednesday and Thursday in Pebble Beach, Calif., it was obvious the deal was not progressing as quickly as hoped.

Staff writers James Thorner and Jonathan Milton contributed to this report.

            

Comments

[quick tuna]

Don't answer that, ajax. Little dingle just gave me the same treatment.
Little thing. Little quick. Little tuna.

[Mike13]

Some of those were duzzies Ajax! I liked 3, 6, 8, 9, & 10...

Keep your day job. Sounds like a second grader.

[ajax]

My 2007 Xmas Wish List
10. Trainers invent portable micro-oxygen pack for Big 3. Brad experiments with prototype double pack.
9. NHL executives make major financial investment by adding second 125.00 camera at each arena. They will install 10 arenas per year for the next 3 year. Tampa in 2010.
8. NHL change schedule and award Bolts a minimum 2 days off to properly rest players. Torts complains he wants minimum 5 games a week.
7. Next home game all fans donate 50 cents each to pay for Torts fine. Please no whining about the heavy fine.
6. Vinny gets NASA made super light backbrace to help his aching back from carrying the team. What a load to carry.
5. St. Petersburg Times agrees to a minimum of one paragraph a month on the state of the pending Lightning sale.
4. Lightning sets up a 1-800 number asking the simple question, If we spend $5 mil on the cap, can we recoup $6 mil by increasing ticket prices to all season ticket holders. Pretty easy answer for me!!
3. All audio and video lines to Toronto are scrambled every time we play for the rest of the century.
2. Brad Richards voluntarily retires to take a job at Bern's Steakhouse as a celebrity wine taster. Bern's gives him 8.2 million guarenteed for 7 years. Jay Feaster immediately offers to match the contract with a 5 mil bonus to boot.
1. Jay Feaster steps down as he is offered the emcee position of a new reality TV show: Who's Foolin Who?

[hockeyjoker]

Doug MacLean is one of the biggest failures in the history of the NHL. If he loves hockey as much as he says he does, he should do us all a favor and stay away from the NHL for the rest of his life.

[ignatz]

Here's who got it shoved the hardest up the rectal cavity by the non-deal in descending order of who got the biggest ream job:

1. Players and coaches
2. Fans
3. Feaster

No one else is absolved. Not management, not the purchasing group, not the asleep at the wheel media, not the NHL and its inept stooge Bettman.

And I'm giving Feaster the benefit of the doubt.

[Lightning rod]

Hey shrink, how many personalities and blog names do you have. Looks like they change everyday, but the anger is just under the surface.

SB1 where are you?

[wiggy]

You are assuming that Detroit kept Tampa informed all the way. The history of the disaster suggests otherwise. Tampa did not know that the initial offer was made and accepted until well afterwards. If they informed Tampa of the aborted sale as soon as the day following (doubtful), it would have been too late to resurrect the Bryzgalov deal anyway.

That being said, it's quite likely that Davidson is going to pocket the $5 million. The sale to that bunch of phonies and conmen smacked of desperation in the first place.

The market tailspin, dwindling dollar, and credit crunch have a lot of wealthy people taking on water. Davidson must be in that category.

[Mike13]

I'm guessing that the $5-million is going into the Davidson coffers. The justification being that he "lost" $9-million and needs to make up for it.

I think we can rest assured that the earnest money will not find its way to the Lightning's salary budget.

If the deal was dead on 11/14, then we could have still had Bryzgalov. Brian Burke (Anaheim GM) put him on waivers on 11/16. Sorry boys and girls, but it wasn't Absolute Hockey's fault that we didn't get him. There's 48 hours (probably more) that Feaster had to work a deal and didn't.

[Nils]

Couldn't agree more. I grew up loving hockey and I'm not a youngster. What's sad is that there are still so many questions, as many bloggers have posted, but I have no faith the media will track down the answers. Look, the deal fell through on Nov. 14 but it took a civil suit filed 12 days later for the papers to catch up to the story. You can bet the Times and Tribune courthouse reporters notified the hockey beat writers as to what happened. It truly is pathetic.

[ajax]

The reality is that by Friday this will no longer be a story for any of the media. Hockey is not important to the Times or the Tribune or ESPN or any etc etc. But it is important to most of us. Can you imagine how the Times would of stayed on top of this if it were the Bucs? I loved Gary Sherlton's article, but where has he been? AND, Gary won't write about hockey again until there is another "headline" to comment on. His comments were right on, but this blog has more to say, even if just rumors, then our two local newspapers. We still need a buyer who not only is rich, but more importantly wants to win at all costs.

[boatman]

Thank you, Damian..a new poster name defending the indefensible. Also, we are not being paid to be a journalist but we seem to be doing a better job than the so-called "professional."

[Avery]

If there are going to be some of you who are going to play armchair journalist over this situation and attack Mr. Cristodero for "missing the boat" on the story, the least you could do is spell his freakin' name correctly. It really gives you guys no credibility when you don't have the due diligence (which you are accusing Mr. Cristodero of not having) to make sure you're spelling his name right.

[the shrink]

Good point, ajax. There is no way any deal will be done with anyone involved in the fiasco group. There is way too much acrimony and unreliability. Burton is dreaming or lying when he says he hopes they will get together.

More importantly, I want to know about the $5 million forfeit fee. I have a sick feeling Palace Sports did not enforce it because they believe they can still get a deal with the present group or some members of same.

The ill-fated purchase did untold damage...tying Jay's hands and torpedoing the Bryzgalov deal. That $5 million could go a long way into getting improtant missing pieces (a blue liner, a second liner, a goalie)...well, 2 out of 3 anyway.

[ajax]

Gary Shelton writes a must read column for the whole hockey community. Front page of today's sports page. In a nutshell, the bungling of this deal answers little and still leaves lots of uncertainty for our team. He wrote sellers that lack passion mixed with buyers who lacked money. Lame duck franchise. How do we believe anything that Jay and group tells the community?

[wiggy]

OK girls, break it up. It's not worth arguing over and I certainly don't want to read it. Sure the SPT should have been on top of this story but so should the Tampa Trib. Damian is a decent writer. He just missed this. Let's move on.

[mediawatch]

Alabaster Cat=Cristodoro's Mom or lover.

[boatman]

Hey, jerk off, Cristodoro missed the boat totally on this story and everyone knows it. There was no reason not to print the deal was in trouble when anyone with any sense knew there was a problem. You don't know squat about news or how it should be presented.

[Alabaster Cat]

Hey Granny Rice, you might wish to take a form of the name of Grantland Rice who was a great sportswriter and a true gentleman, but your comments leave me doubting that you were ever either a reporter or a junior college teacher. How dare you suggest that D.C. get "dressed down" by the Times management. Yet, maybe he could use a shoeshine, and that is where you might be of some use.

[Granny Rice]

Cristodoro is a sportswriter and a columnist, not a news beat writer. He has the latitude to be circumspect and probing. I know, I was a professional journalist and taught journalism at community college. Several media OUTSIDE the Tampa Bay area questioned the sale in print. Sorry to burst your iconic bubble but this was mishandled by the local media. If the managing editor is doing his/her job, the Sports Editor and Cristodoro got a good dressing down.

The fact is that not only Cristodoro but also the hockey writer across the bay dropped the ball on this one.

[Another Joe]

Well I was happy when I initially heard about the sale a few months ago. However, if the new ownership group was having trouble financing the deal then they would not have been good owners anyway.

I would not be surprised to see another group or person more financially able step up to the plate now and buy this team because everyone knows its for sale now.

I think this team is profitable. I have the center ice package and look at teams around the league that have horrible attendance. The Blackhawks,Islanders and Devils to name a few are lucky to pull in 10,000 a night. We pull in 19,000 most nights and on a bad night(only 1 so far this year) we get 15,000.

Look at the Forbes report. Someone with money is gonna step up to the plate and buy this team because they realize the gem the bolts really are!

[CV]

Did anyone read the lawsuit on the pdf?50 million damages(profit),Absolute getting 2.5 % management fee on "gross" revenues and asking 15 million damages , shell LLLPs etc...Forbes had the Lightning at 6oo thou profit last year and 4.5 million the year before.Gee! what a surprise,but despite all the denials(see Campbell)atleast Forbes got the value right.Wake up people!Davidson has been crying poor mouth all the way to bank.And our 900,000 goalie has been thrown out with the bath water.

[ajax]

Alley Cat good call. Damien, I am sure over a beer can say alot of things he can't print. We can call everyone on the carpet, but none of us have to "ask" for a story the next day. Sir Damian is in a position that none of us bigmouths(me included) is in. I do not agree with all he says, but I do realize it is me whining versus a paycheck for Damien. So Damian is off limits for me, I like this blog to much to bite the hand that feeds. I have never seen one subject get so much ink, any most everyone is being nice. Full moon??

[Alabaster Cat]

There are some very interesting observations made by those commenting on this story, and their views are to be respected; yet, some might remember that Damian is a professional journalist whose career could wind up in the hopper if he was to print rumors and speculation, particularly about a group that actually might have taken control of the team.

It is very easy for us, making comments on an anonymous basis. to say whatever we wish. Our jobs are not on the line. Let's give Cristodero a break: chances are that he knew much more than he was able to safely reveal.

We need to remember that this is the guy who made (and, continues to make) this forum available despite many of the unsavory things that have appeared in these spaces.

[Pete]

Why the venom towards davison? Didn't we win with him as owner? Over the past three years haven't we maxed the capp 2/3? Arent we well over the avg right now?

How do you re-sign Dan Boyle next year if you don't have some room? Wasn't it a mistake the past 2 years not having room to add salary late in the year?

The Absolute team were an absolute joke. Go back and read the coverage it is laughable, all of their deadlines for their full ownership being revealed, closing by mid-september . . .

I like a single multibillionaire as my owner.

[Nils]

Burton says "I heard what's going on." He knows damn well what's been going on and has known for some time. No one involved in this mockery has any credibility.

[dwight]

A sad chapter...

Sad that this syndicate of phonies made the offer.

Sad that Davidson and Wilson did not perform due diligence and nix the offer.

Sad that Lightning management bound themselves to the condition they could not increase salary and passed up an opportunity for a very good goalie.

Sad that the Bay area media weren't on top of this from the get-go and that bloggers were more insightful.

Sad that there is no help for the very mediocre to poor team on the horizon.

Sad that the coach, players, and some fans masked inconsistent to downright awful play by blaming reffing for just about every loss.

[angie]

I think what he/she is trying to tell you is that they have won 10 games in 23 tries. That's a .435 winning percentage. That is under .500. Capiche?

[thomasutra]

wiggy, do you honestly think we are not playing .500 hockey? we have been around .500 for a few weeks and have 22 out of a possible 46 points.. I don't think we will slide too far away from .500 and turn it around soon and play well above .500 hockey because that will get is nowhere, fast.

[wiggy]

Yo, thomasutra....10 wins in 23 games does not constitute a .500 team. And I would say it's unlikely that the team will move given the attendance and land use possibilities.

I, too, would like to know what happens or what happened to the $5 million good faith deposit by Absolute Hockey. It should have been forfeited to Palace Sports. That dough would go a long way to make up for the goaltender opportunity that was passed up because of the messed up "sale."

[Sorry in Sarasota]

Dear Mr. Davidson,

I am very sorry for all the mean things that have been said in this and other blogs since the sale to Absolute Hockey Enterprises was announced in August. We really never wanted to see you go. We are very happy here in Tampa as minions of Palace Sports & Entertainment. Please ignore all the posts that called you a "miserly old tightwad," a "carpetbagging pinchfist, and an "absentee owner." Heck, I know that the games start well after your bedtime! We really do appreciate all the new paint in the building and the fact that you keep the escalators going almost all the time. We're relieved to have you around, sir!

PS- Please don't raise the beer prices again.

PPS- Did you know they blow fake snow off the roof after home games? You could save a lot of money by putting a stop to that (then again, running the blower does seem to be a good way for Denis to earn his 3 mil)

PPPS- Are you gonna make McLean, Koules, and Sherrin give back those spiffy Lightning jerseys? I think we could get some money for them on eBay!

[Lisa]

I could be wrong, but I seem to remember when the sale first became public, this was brought up. I think there is a long term deal for them to stay in Tampa which is tied in with the St. Pete Times Forum, so I think it would be very difficult and very expensive to move the team to another city.

[thomasutra]

Lisa, I agree.. that was my point.

I think its best for us to all move along instead of looking to place blame or have a season filled with "what ifs" and what could have been because it doesnt matter.

We have what we have and are very blessed to have the players we have and very capable of turning it around and playing much better than a .500 team.

I hope that moving the lightning isnt on the mind of anyone? I know we don't want a poor ownership and someone who will try and make too many changes but before that i am worried about someone looking to move the team out of tampa?

is there much of a chance for this to happen? I know the market here is doing pretty well and is able to do more and grow so I hope that will keep us safe?

[Gene Siskel]

Looks like I went to see "Saw 4" for nuthin.

[Lisa]

I will say that there is no use crying over spilled milk, and after this, I will not say another word about us losing out on Bryzgalov. But my final thoughts are that yes, we don't know how Bryzgalov would have fit into the style of play in the SE division. We do have the most dangerous goal scorers in this division, so he may not have been as successful.

But the difference between this and Denis is that for under a million, we could have tried him out for the year and seen how he fit in. If he didn't there is no long term commitment and we would have parted ways at the end of the season.

If he worked, we would have worked to sign him to a long term deal, already knowing that he fit in with the system. It was a no lose situation in my opinion. but it didn't happen, so even though I believe that was the worst decision I have seen the Lightning make in recent years, I will just move on and accept that there is nothing we can do about this now.

[Lisa]

Sure, Phoenix had the shot before us once he hit waivers, but before he was placed on waivers, he was shopped around. For a 4th round pick we could have had him and I think it is interesting that since this move, Phoenix won 4 while we lost 4. Could have been different.

I read that Sherrin is suing Koules since he did not come up with his share of the money, and he was to be the main money guy for the purchase. But what is more interesting is that he supposedly was trying to negotiate a deal with the Lightning to buy the team for himself or with his own coalition. (according to another newspaper) Looks like he decided he wasn't happy with the other members of the coalition and wanted to do it his way. The fact that he was using insider information which he wouldn't have if he wasn't part of the deal makes it pretty tricky.

Very interestin. It will be interesting to see what happens.

[thomasutra]

hmm, I don't remember much in the off season about the Ilya trade/offer but once he was put on waivers anyone can claim him and we are 16th (I believe) in the waiver-line & there is no way 15 teams pass him up for the low cap hit and all his talent but if there was a chance for us to have a shot at him for a 4th rounder and we didnt because we were tied up with this mess... I would be pissed.

although, goalies in the west are really unproven when coming over the east and more so the southeast division because the type of hockey that everyone here plays.

look at Marc Denis.. he wasnt really proven but played for a horrid team and had decent numbers but has shown he can't handle the heat in the south.

Look south at Florida and Tomas Voukon.. he was a force in NSHVLE but with florida hes been pretty average so I am not gonna focus on "what ifs" but work with what we have.

Maybe we need a older, stay at home defensive player to make up for our pressing young defense? something needs to happen.

[Fredinator]

Sorry to stop the Feaster roast, boys, but Phoenix had a shot at Bryzgalov before we did...that's the way that waivers work. Maybe Feaster will discuss it with you over donuts...

[ajax]

They will come out with a statement in the next couple of weeks. It will read something like this. "We like the guys we have. We are coming together as a group. There is no need to hit the panic button". The same stuff he said last year, by the by, Slick Willie, (Jay) will say all the right things, and most of us will know exactly what he is saying. Nuttin. Last year Jay said he thought we had the best defenseman in the NHL at the trade deadline. Look it up, he actually said that. Jay certainly has had his hands tied lately. But, I think after looking back over the past 3-5 major news bulletin (contracts, trades etc), HIS hands should be tied. Nice man, but he will be remembered for a cap tight roster full of minimum wage losers on his resume. The Dynasty once predicted sure seems like a long long time ago. Maybe it is Toronto's fault??

[vic]

thomasutra,
Ilya Bryzgalov from the Ducks.
Dirt Cheap for the year.
Put on waivers.
Picked up by the Coyotes 12hrs later.
Has played 4 games for them since.
Has won them all.
The Coyotes are back in the mix.
We're not.

[Nils]

I guess being a "first class operation" isn't the same as being competitive. I don't care about what they say publicly. They need to take some positive action with a trade or free agent pickup to actually show their committment.

And yo, thomassssutra, the Lightning were offered an Anaheim goalie with a lot of talent (he's a Russian with a last name like bad Scrabble hand) for a fourth round draft pick. The Bolts couldn't make the deal because the pending sale tied their hands as far as increasing payroll. the goalie was claimed off waivers by the Coyotes and he has been sensational in four starts (4 wins and a .954 save percentage).

[the shrink]

Some additional points:

Damian has to be happy he doesn't have to deal with MacLean who has been at odds with the press throughout his career as a coach and GM. According to Damian, MacLE\ean would always say the deal was "on track" when questioned about its progress.

The Lightning management, if they're smart, should come out with a pronouncement about their intention to be more competitive this year. Wilson said they weren't looking for a buyer (which I don't believe for a nanosecond) but if he wants to generate decent ticket sales, he better say something positive.

For a guy who has supposedly made millions in real estate, Sherrin showed no business acuity in selecting business partners. He's out a pile of dough and because of the lawsuit he is in the limelight which he has shunned.

MacLean has managed to screw up three different hockey franchises in the capacity of coach, general manager, and prospective owner. Is there a Hockey Hall of Shame?

The fall guy for this mess is Jay Feaster who hasn't been able to say anything publicly and hasn't been allowed to increase payroll. Some of you need to ease up on him as he had no say in the situation.

[thomassssutra]

I am a little late here but what goalie did we miss out on because of this deal? or are saying it prevented us from going out and finding a decent goalie?

can anyone explain , please.

[jr]

You bring up a good point, ajax, and that is how much of a commitment does the present ownership have? We should know by mid-January at the latest.

[Canadians Fan]

Columbus media will have a field day with this one. Another nail in MacLean's credibility coffin. He is intensely disliked and you know they're tossing confetti in the home of the Buckeyes.

[the shrink]

Just happened to realize the Lightning just got $5 million that was put in escrow by the MacLean group which was to be forfeited should they pull out. Let's use the $5 million to get a couple of missing pieces to help the team out. This mess already cost us a very good goalie.

[Nils]

He didn't make a payment on Nov. 16? Who's kidding who? This deal was dead way before that. The media needs to dig around a bit more.

And you knew something was wrong when they announced the Tampa attorney as an investor. He has no "real" money. MacLean didn't put in "real" money--less than 5 percent according to reports. So you knew they were extremely short of capital.

[jr]

Lisa, bless you, your post was the genesis for my blog fodder earlier on this deal gone bad. But.....Koules will not get a group together to buy this team. He backed out, he's getting sued so it soesn't matter about his hockey background and depth charts.

Cristodoro has been lagging on this story all along and his speculation that Koules will later get involved shows a lack of understanding about all aspects of this fiasco.

This is actually GREAT news for Bolt fans!!!!!!

[Fred]

"Bombshell" my a ss....not to those who have been reading the blogs, not the newspaper.

[Lisa]

If I am reading this correctly, Koules may resurrect the deal with a group led by him. I wonder if that means he was not happy with the other members of the group and that was why he pulled out. Maybe this would be a good thing if he gets another group together without MacLean since I am hearing so much negativity about him.