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Lightning Sale Hits Obstacle

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By ERIK ERLENDSSON, The Tampa Tribune

Published: February 10, 2008

ATLANTA - The proposed sale of the Lightning has hit another speed bump.
Sports Business Journal reported that the bank that was set to lend Oren Koules the necessary amount of money, between $100 million and $110 million, has ceased its sports lending sector in the United States.

According to the SBJ report, French bank Societe Generale, which bases its operations in Paris, is in the midst of a trading scandal that cost the bank $7.2 billion in losses. The report indicated it was unclear if this led directly to the bank, which has previously held financially challenged teams such as the Pittsburgh Penguins, getting out of sports lending.

After the sides had made progress in recent weeks, a purchase agreement was believed to be imminent and was expected to be announced earlier in the week. Though the lender backing out is a setback, it is not believed to be a serious blow to the process, according to team officials.

But what it does to any kind of a timetable is unclear until Koules and his group can secure another lender. That process could take another three or four weeks.

"Based on our understandings here in Tampa, despite the hardships in the financial markets today, the process is still moving forward, just not at a pace that any of us desire," Lightning president Ron Campbell said in a statement. "Nevertheless, we will continue to work together to get something consummated in as safe and timely a manner as possible."

Koules could not be reached for comment.

With the Feb. 26 trade deadline approaching, this development could hamper the team's attempts to either re-sign defenseman Dan Boyle or make a play in the trade market should the team remain in the hunt for a playoff spot. Team officials say it remains business as usual for current owner Palace Sports and Entertainment, and General Manager Jay Feaster was to open negotiations with Boyle this week.

The sale of the team has been a roller-coaster ride since the initial announcement was made in August that the team would be sold to Absolute Hockey, a group that included former Columbus general manager Doug MacLean and would be funded primarily by Koules' OK Hockey group. But the two sides split, resulting in a lawsuit that was settled out of court by NHL Commissioner Gary Bettman in December.
Palace Sports and Koules entered into an exclusivity agreement before Christmas, and the sides had hoped to have a purchase agreement in place by the end of January. Though no agreement has been announced, the sides made significant progress in the past two weeks and appeared on the verge of entering into an official agreement before the lender pulled out.

Sal Galatioto, who is representing Palace Sports and Entertainment in the sale, declined to comment to Sports Business Journal on the bank's removal from the process. The report stated, however, that when an investment banker such as Galatioto, who runs Galatioto Sports Partners, arranges a franchise sale, a second or even a third bank is tapped as a potential agent in the event something happens to the first one.

Reporter Erik Erlendsson can be reached at (813) 259-7835 or eerlendsson@tampatrib.com.

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