Big article in the Edmonton Journal today with regard to the Katz Group making an offer to EIG for the Edmonton Oilers. Article is here and seems to be hastily put together. Much of the info on Katz seems to come from a file (without a pronounciation guide which would be helpful to those who don't know. It is pronounced CATES, my thanks to Colby for head's up) and more than a few sentences appear to run on without saying much at all.
The highlight of the article (in a bad way) is the quote "It (Katz's offer) was presented to the ownership group several days ago ... and they are sort of soaking on it right now." I wasn't there when this was said, but isn't it more likely the quote was "soaking it IN right now?" Soaking on it sounds strange, I've never seen it in writing and I'm older than Daryl Katz. I'm not a journalist, but wouldn't the prudent thing for the reporter to do is confirm the quote? Or at the least repeat it properly and get confirmation? (as in "so the EIG is soaking it in right now?"). I know it's a small point but it speaks to the quality of the article (which is backed up by the fact that this front page story is pretty thin on detail, as pointed out by Mudcrutch earlier today).
The Edmonton Journal is one of the groups involved in the EIG, although I can't find that in the article. It doesn't mean it isn't there, but I've struggled through it several times and am unable to locate it anywhere. Interesting article, I don't know what to think about it all. I've only been soaking on it for a few hours, though. :-)
Update from Tencer
ReplyDeletehttp://www.hockeybuzz.com/blog.php?post_id=7361
This is a sign that the arena deal is moving along.
ReplyDeleteAlthough many of the partners in the EIG are wealthy by the standards of the average joe, they aren't really compared to the average NHL owner.
The capital requirements for the new arena are going to be huge, and the EIG is going to have to come up with a big chunk of it. Probably at least $100 million.
There is no way many of the current partners in the current EIG will be able to come up with their share without staking most of their personal net worth.
The new arena deal requires a deep-pocketed majority shareholder.
The little fish in the EIG have had their day. They get to collect a nice profit for stepping forward to help save the Oilers, but the franchise and the arena require large amounts of new capital.
It's pronounced "Cates", actually.
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ReplyDeleteThanks Colby.
ReplyDeleteIncredible development. I guess this can only be viewed as good news. I agree that it's likely that this is connected to the whole arena issue, which I have mixed feelings about at best.
ReplyDeleteI wonder how many in the EIG types want to hang on and wait to see what happens with the arena. As mudcrutch posted, they're already set up for a fabulous return on their initial investment, why not wait until an arena deal bumps up the value even further?
//I wonder how many in the EIG types want to hang on and wait to see what happens with the arena. As mudcrutch posted, they're already set up for a fabulous return on their initial investment, why not wait until an arena deal bumps up the value even further?//
ReplyDeleteBecause they are going to have to ante up in new capital probably at least three times what they had to ante up to save the team 10 years ago.
For the arena project, the EIG is going to have to come up with probably $100 million in NEW capital.
The EIG as currently constructed doesn't have the net worth to undertake a $500 million dollar arena/real estate project.
For an existing member of ownership group, the options are take the buyout, or put up 3 times or more in new money than what you put up 10 years ago.
Plus, if you want partners like pension funds in the arena project, the EIG has to clean up the 40-headed "monster".
ReplyDeleteThe private equity, REITS, or pension funds brought into the arena project are going to want to have a EIG representative that can MAKE a decision and is well-capitalized without having to go back and consult with all the owners.
Part and parcel of the arena development - big pockets needed for that. Give the 37 a nice fat cheque, a big portrait in the new arena, and some nice jackets.....and wave bye-bye. Their service was invaluable at the time but the team's needs have grown beyond this arrangement.
ReplyDeleteI'd be surprised if they all sold out. I wouldn't be surprised if Katz bought a majority stake in the team, which would allow the guys who wanted to cash out to cash out and those who wished to remain in to remain in at perhaps a reduced position.
ReplyDeleteMy reading of the Journal article shares an important fact:
ReplyDelete- if he buys all the shares, it is at the ~$145M level
- if its only partial, the purchase price falls to $100M
On HFboards Bob Stauffer says Nicholls says the team is not for sale.
ReplyDeleteJust because Nichols says the team's not for sale, in no way means the team can't be bought. ;)
ReplyDeleteThis is likely only the opening salvo in a negotiation that'll likely go for a while, perhaps even until next summer. There'll be lots of posturing along the way, and this is only a taste of things to come.
Like MacKinnon says in his Journal article today:
"If the options available in the past decade were an EIG-run Oilers or no NHL club at all, there is a clear option in the public imagination now."
How do the EIG do their "we have to run this team like a business, which is why..." thing for public consumption without the public retorting "So then sell it to this guy if you can't hack it!"
By and large, I'd wager the average longtime Oiler fan couldn't care less about the sweat equity put in and supposed altruism of the EIG. They want to see a winning team that can afford to keep its players, and unfortunately for the EIG the Smyth trade will be hard for a lot of average fans to forget or forgive, fair or not.
Come'on Monopoly Guy. Put down your top hat and monocle and buy the team already!
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