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There's a sports team for sale, but it doesn't operate with any subsidies from local government.
In fact, team owners also own the arena, they draw thousands of fans to their games and they've built solid name recognition throughout the region even though their sport isn't native to Florida.
In an era of heavily subsidized sports, the Florida Everblades ice hockey team and Germain Arena in south Lee County are somewhat of an anomaly. The only public money the arena's owners ever received was a $1 million grant from Lee County for strengthening the building as a hurricane shelter when they built and opened it in late 1998.
Now, both the team and Germain Arena are for sale. The selling price is undisclosed and owners decline to cite revenues or other financial data except to say they're profitable. The Lee County Property Appraiser assessed the arena at $12.6 million for tax purposes.
The current owners of the team are Peter Karmanos Jr., the former chairman and CEO of Compuware Corp. and current owner of the Carolina Hurricanes hockey team, and Craig Brush, a former insurance executive. Brush is the president and general manager.
Karmanos won't discuss the sale, says Brush. But in a statement announcing the sale, Karmanos says: “I am at a point in time where I want to simplify my life. While I have thoroughly enjoyed owning the arena and team and seeing the tremendous benefit they have been to the community, it is now someone else's turn.”
Brush says the sale of the team is coming at the right time, just as the economy is rebounding. “We've been quietly marketing it for the past few years,” he says.
But with no decent offers in recent years, Brush and Karmanos hired Park Lane, a sports investment-banking firm that specializes in the sale of sports teams, to cast a wider net. Park Lane was involved in the sale of the Tampa Bay Lightning hockey team to hedge fund manager Jeff Vinik, for example.
“There has been some local interest,” says Brush. Two groups of investors have been formed to consider a purchase, but Brush declines to disclose their identities.
Brush says he doesn't expect a quick sale. “It's a six-month process at the very least,” he says.
What's a team worth?
It's not clear what the Florida Everblades are worth. Sports teams can't be valued by traditional methods such as multiples of earnings or revenue, says Kline.
“Who is willing to buy that asset and what are they willing to pay?” says Kline. “Sometimes you have a group that understands there's only one team in the area and they have to buy it.”
The last sale of a minor-league hockey team was the Stockton Thunder, part of the East Coast Hockey League (ECHL) to which the Everblades belong. A price was not disclosed and team representatives couldn't be reached.
Despite the downturn, the Everblades have had some of the best attendance of any team in the ECHL league, thanks to numerous playoff appearances. In this most recent regular season, average attendance was 5,116 people over 36 games, ninth in the 23-team league. That compares with 6,248 average attendance at Everblades games in the 2006 season during the boom, second in the league that year, for example.
Brush acknowledges that the economic downturn in Southwest Florida impacted ticket sales. “The business was moving along famously until 2008,” says Brush.
But Brush says the real estate recovery is helping boost attendance again. “That has just started to rebound this winter,” he says.
During the boom, the arena had a waiting list for its 26 luxury suites. “We have four or five to sell,” says Brush. Suites cost $40,000 for a season, which includes 10 tickets to more than 100 events.
The advantage to owning both the team and the arena is an owner doesn't have to split revenues with a partner. For example, Karmanos and Brush control sales at the concessions and advertising.
Bob Germain, the auto dealer who acquired the naming rights to the arena from Teco Energy in 2004, says he doesn't know who prospective buyers might be, and he's not interested. “I have a Nascar team so that's my sporting team; I don't need more than one hobby,” he says. “I wish they weren't selling because they've done a great job.”
But Germain says he's pleased with the name recognition. In addition to the name on the side of the building in view of I-75, he says Germain's name appears in news of games and events at the arena. “We got more value out of it than we thought we would,” says Germain, who has six more years remaining on the contract for the naming rights.
Germain declines to say how much he spends on the naming rights to the building. “Somewhere between $0 and $500,000,” he laughs, noting it's about 10% of his company's marketing budget. Germain operates five auto dealerships in the area, as well as others in Ohio and Arkansas. “Those guys have done a really nice job, especially as the economy got tough,” he says.
Prime real estate
The deal could be a play on commercial real estate. Brush says he and Karmanos may be willing to split the team and the arena to different buyers.
Germain Arena, which hosts more than 100 concerts and shows annually with 8,300-person capacity, sits in a prime location on Interstate 75 between Naples and Fort Myers. “Most arenas are in very distressed areas,” says Kline. “Germain Arena is smack dab in the middle of paradise. They're extraordinarily well run. There's not a gum wrapper on the ground.”
The arena's neighbors include Miromar Outlets to the south. Executives with the mall couldn't be reached. An investment group led by Naples developer David Nassif owns about 196 acres around the arena. Nassif couldn't be reached through his company, NM Development Group.
Brush says he's discussed a possible sale of the arena with Lee County officials. “We don't have the financial wherewithal to enter into negotiations,” says John Manning, the commissioner who discussed the issue with Brush. Manning says Brush did not name a price for the arena.
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