Lightning owner to aid sale's financing

By Damian Cristodero, Times Staff Writer
In print: Tuesday, April 22, 2008

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The worldwide credit crunch made the proposed sale of the Lightning to Hollywood producer Oren Koules difficult.

To remove the uncertainty that has been a constant of the four-month process, owner Palace Sports and Entertainment and Galatioto Sports Partners, a sports investment bank in New York that had been brokering the deal, will finance the sale.

"To move the process along and make it as efficient as it can be and gain control of the process, (GSP) and Palace Sports stepped in and said, 'We'll finance it until the credit markets get corrected,' " Lightning president Ron Campbell said. " 'At some time, and we'll be patient, you all will pay us back when you get traditional financing.' "

Campbell would not give specifics, but it is thought Palace Sports and GSP will contribute $100-million of the $200-million deal for the team, the St. Pete Times Forum lease and 51/2 nearby acres. It was unclear how much each would contribute, but Palace Sports is likely the primary lender.

Paperwork still must be signed, but that is expected to be done relatively quickly.

The move indicates how badly Palace Sports wants out and the difficult financial landscape.

Koules in February lost about $100-million in financing from Societe Generale, France's second largest bank, after it closed its U.S. sports lending business. A proposed financing deal with New York's CIT Group recently fell through as well.

"We've never seen it like this in our lifetime," Campbell said of the tight credit market.

Neither Koules, who heads OK Hockey, nor GSP president Sal Galatioto would comment.

Before the financial deal closes, however, the NHL's Board of Governors must approve transfer of ownership.

Given Koules apparently has raised 50 percent of the purchase price, a league benchmark, and the NHL's usual four- to six-week process once financing is secured, the deal could be done by early June. That would give Koules control for the draft, June 20-21 in Ottawa.

And it would end a saga that began in August, when Absolute Hockey Enterprises said it would buy the team. That venture, of which Koules was part, ended in November amid investor infighting.

Koules put together OK Hockey with business partner Mark Burg, developer and former NHLer Len Barrie and California banker Russell Belinsky. There likely will be one or two minority investors from the Tampa Bay area.

The group got exclusive negotiating rights in December.

"It appears there is a beacon of light at the end of the tunnel, which is good for everyone," Campbell said.

Damian Cristodero can be reached
at cristodero@sptimes.com.