After looking at dozens of sports and entertainment properties to acquire, Sports Properties Acquisition Corp., has zeroed in on the Panthers and is working with Sunrise Sports & Entertainment to try to finalize a deal.
Last month, the two entities signed a non-binding letter of intent to reach agreement on the sale of the team for $230 million, but sources say it could be weeks before a deal is signed. As I explained in a story last month, Sports Properties Acquisition Corp., a public company formed to buy a sports or entertainment asset, has been searching for a property that offers an upside. The company has examined other hockey teams and made an unsuccessful bid for the Chicago Cubs.
What makes Sunrise Sports & Entertainment attractive is not just that it owns the Panthers, who haven’t made the playoffs since 2000, but that it operates publicly-financed BankAtlantic Center and has plans for City of Oz, a massive mixed-use retail and entertainment complex surrounding the Sunrise arena.
So, details are still being worked out, but the NHL is aware of the negotiations and the non-binding letter. It’s possible an agreement could be reached by late June, but unclear if it could be ready in time for the league’s Board of Governors meeting later this month. It could be months before the deal closes, sources said.
Sports Properties Acquisition is what’s known as a "special purpose acquisition company" or SPAC. The SPAC raised more than $200 million from investors last year and has until January to use the money or it must be returned to shareholders with interest. Shareholders would also get their money back if a deal is reached but rejected. Any deal must receive approval of NHL owners and the SPAC’s investors.
SPACs gained notice in the 1990s, but their modern version did not surface until 2003. They are mainly an investment vehicle for hedge funds. While SPACs are formed to purchase all sorts of companies, Sports Properties Vice Chairman Andrew Murstein said last month his SPAC was the first to delve into the sports industry.
Panthers owner Alan Cohen and his partners would receive stock in the company in the deal and the team would be public once again. The Panthers, who were an NHL expansion franchise in 1993, were publicly held from 1996-2001, but became a private entity when H. Wayne Huizenga sold the team to a group led by Cohen for $101 million.
The makeup and operation of the team under the new company, is unclear. Although he could still have a role with the team, don’t be surprised if Cohen isn’t calling the shots in the future.
Sports Properties has plenty of sports experience among its board and advisors.
The company's board of directors includes Major League Baseball Hall of Famer Hank Aaron and former New York governor Mario Cuomo. Ex-Buffalo Bills Quarterback Jack Kemp, who died last month, had also served on the board. Murstein had said it was Aaron who suggested the company consider buying a sports team.
Company President and CEO Tony Tavares’ resume includes stints as president of the Anaheim Ducks and the Montreal Expos and head of venue operating company SMG.
And Game Plan LLC, an investment banking firm that handles team sales and acquisitions and is advising Sports Properties, was one of a pair of companies that together made an offer to buy the entire NHL in 2005 during the lockout.
The offer from Game Plan and Bain Capital never advanced, but was for $3.5 billion (roughly $116 million a team) and was presented to the NHL. The idea was to run the industry as a single-entity league in which no team had a particular economic advantage. Traditional television contracts would have been replaced with coverage by regional sports networks.
Anyway, stay tuned…
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