Panthers Make Themselves At Home

Things in Sunrise, Florida obviously look a lot different today than they did ten years ago. In one decade, the franchise has gone from bottom-of-the-standings play to Stanley Cup champions, and it appears that the dismal crowds that once dotted the seats in Amerant Bank Arena have now found multiple sections of friends to join them as the building is regularly packed for NHL action. The turnaround has been impressive, but it seems the cost having the Panthers in Sunrise may have gotten a little more expensive as the wins piled up.

According to a report by Tim Reynolds, the "Florida Panthers are extending their operating agreement with Broward County for five more years, ensuring that the team remains in the market through 2033 and likely well beyond." Obviously, this is good news for Panthers fans in the area and some of the businesses that partner with the Panthers, but, as in most of these arena lease deals, it's the fine print where things get a little murky in the water.

As per Reynolds' report, the Panthers will pay off the remaining $51.5 million in debt on the county-owned arena. Amerant Bank Arena was completed in 1998 at a cost of $185 million USD with almost all of those funds coming from public sources. Since its construction, the Panthers have asked Broward County to pay for a $4.2 million scoreboard, asked for an $80 million bailout package and received $86 million, and have seen Broward County make upgrades to the arena that the county owns. While most of those improvements have helped the Panthers' product and brand, it would seem the county may be digging into its pockets once again.

Reynolds writes, "The updated terms also give the county two five-year options to extend the agreement even further. If those extensions are not picked up, the county will have to return some or all of the $51.5 million debt payment to the Panthers."

Wait a second. The Panthers get their money back if the county opts not to extend the agreement? Isn't that a little extortionary?

Here's how that repayment scheduling breaks down:

• If the County does not exercise its first option to extend the agreement, County to repay $34.4 million of the amount paid by the Panthers.
• If the County does not exercise its second option to extend the agreement, County to repay $17.2 million of the amount paid by Panthers.
• These repayment terms apply to current ownership group and will not apply if there is a change of control.

"It was important to the county to keep the Panthers in Broward County long term," Panthers President and CEO Matthew Caldwell told Reynolds. "We're excited about it. It's a great, great step forward for our long-term future."

He uses the word "our" like he's talking for both the Panthers and Broward County, but it's pretty clear that he means the Panthers only. There's zero risk for the Panthers if the county doesn't extend the agreement, so "our long-term future" is specifically referencing the Panthers' long-term future in Sunrise. All of the financial risk is assumed by Broward County in this agreement.

More from Reynolds includes:

"Binding documents have yet to be written, though that process is expected to be relatively smooth now that this stage has been cleared. There are concessions from both sides: The county will invest $25 million annually for capital expenditures and expenses related to the operating of Amerant Bank Arena, while the team agreed to have Broward County advertising on player helmets, to continue using local businesses as vendors whenever possible and to donate at least $11.7 million over the next nine years toward local causes and promoting youth hockey."

If I'm reading that correctly, it appears that Broward County will spend $25 million a year in hotel tax money on operations, maintenance, and upgrades to the arena over the life of the lease extension. Some quick math means that the deal could be extended ten years based on the "two five-year options" with the current lease set to expire in 2028 and the new one extended until 2033, so that means that this will cost Broward County potentially around $350-400 million over the next 15-20 years.

Can someone remind me how much brand-new arenas cost again?

Look, I'm not saying this is a bad deal for anyone as Broward County clearly sees some value in spending $25 million of tax money annually on their arena, but having the Panthers in town for a long time obviously is good for both parties here. Would Broward County be generating more than $25 million in tourism development tax without the Panthers? It's hard to say, but it's pretty safe to say that the ninth highest-attended NHL team last season brings in a lot of tourism dollars to the county.

"But Teebz," some of you are saying, "this is an arena built with tax dollars!" and you're correct, but the county still operates and maintains it without the Panthers squeezing every last penny out of fans who visit. Yes, the Panthers will make money off parking, concessions, and souvenirs, but Broward County is making money off the lease that the Panthers pay them while owning the building outright. The arena was never going to lose money with all of the concerts and events that visit, so Broward County's investment in its own property makes sense here.

This is part of the reason why sports franchise owners want to own their stadia: they rarely ever lose money. With Broward County owning the arena and committing to its maintenance and upkeep, this is an investment that makes sense in the long-term. I'm not overly happy about the Panthers getting the option to pull $50 million out of the county's coffers, but as long as both sides play nice and work together we won't see that happen.

I'm still not in favour of using public money to build arenas that we give to billionaires to run, but the agreement in Broward County seems to work for both sides. It would be nice if the Panthers repaid some of that $86 million they got from the county just to exist, but that seems to be water under the bridge with this new agreement.

The Panthers will be a fixture in Sunrise with this new deal, and Broward County will have a tenant in their arena until 2043 at the very least. If both sides can continue to build on their successes, this new lease agreement may be the cat's meow for future lease agreements between the team and the county.

Until next time, keep your sticks on the ice!