Deep in the red, the NHL's Florida Panthers are asking Broward County for an $86 million tax-funded bailout.
The future of the Florida Panthers may ride on a vote scheduled for Tuesday at the Broward County Commission.
According to a report in the Sun-Sentinel, the commission will consider an $86 million bailout package that team officials say is necessary to ensure the survival of the franchise in South Florida. And at this point the vote could go either way.
The team is reportedly bleeding millions of dollars and needs the infusion to cover those massive losses. The deal would average $6.6 million in payments per year through 2028, although it would it be heavily front-loaded with a first-year payment of $12 million.
Over the course of the deal $39 million would be earmarked for capital expenses at the team’s arena, the BB&T Center, plus $45.5 million for operating expenses, and $1.5 million to be used to lure a “high impact event” such as the NHL All-Star Game. One report suggests the league would guarantee an All-Star Game before 2023 if the vote passes.
The money would be generated by a hike in tourist taxes collected at area hotels.
Although public sentiment about the proposal has been mixed, county auditor Evan Lukic was quoted as saying it was “a reasonable way to address an unfortunate quandary.”
“We entered into this business arrangement some 20 years ago now, and things have not worked out for our partners, and quite frankly, they haven’t worked out as well as we expected, either,” Lukic said. “So we’re sitting here saying, ‘What do we do next?’ ... I believe the team’s done a good job bringing forward a plausible solution to the problem.”
Eight members of the council will take part in the vote, with a 5-3 margin required to pass. A ninth member of the council will abstain as a result of her husband’s business relationship with the Panthers.
At least two members, including mayor Marty Kiar, are set to vote no. Five have indicated that they would be willing to consider voting yes, although one of them campaigned in a recent election with a promise of voting no. Another has chosen not to make his leanings public.
The deal includes several provisions to protect both the team and the county. Among them is a stipulation that the county would receive a portion of the team’s haul from future NHL expansion. The county also gets 10% of the total proceeds if the team is eventually sold.
However, it would also allow an out-clause from the contract with the county in eight years. To activate that clause the team would have to give one year’s notice, show losses of $100 million over seven years, and pay a termination amount. For example, if the Panthers depart in year eight, they would pay back the full $72 million that the county had given them by then. The termination penalty decreases each year thereafter but leaves the county with enough money to pay off the debt.
We’ll have more after the vote is taken.