Philadelphia-based hedge fund manager Andrew Barroway, who "attempted to buy the Devils two years ago and believed he had an agreement to buy the Islanders earlier this year ... is in advanced negotiations" to purchase 51% of the Coyotes, according to sources cited by Larry Brooks of the N.Y. POST. The sale "is expected to be completed within the month." Barroway as part of the deal "would agree to drop" his $10M lawsuit against Islanders Owner Charles Wang in which he alleges that Wang "reneged on an agreement to sell him" the Isles. Current Coyotes ownership group IceArizona "has owned the Coyotes for one season after purchasing the franchise last year from the NHL." The group "would maintain" a 49% interest in the franchise under this purchase agreement. The franchise is "claiming losses" of $24M for last season alone. A source said that the NHL "has been seeking investors for the franchise over at least the last few weeks." Sources further added that Barroway is buying 51% based on a recent $305M valuation of the franchise (N.Y. POST, 10/3).
DEAL DETAILS: The Coyotes in a statement regarding the sale report indicated that they "have made no deal, but the current ownership group has had discussions with an unsolicited investor." NHL Deputy Commissioner Bill Daly in an e-mail regarding the report wrote, "There should be no concern about ownership. It is and will be strong and committed." Glendale City Councilman Gary Sherwood said that he "was investigating whether the city's management agreement with IceArizona was transferable if a new majority owner took over the Coyotes." Sherwood: "I know the fans are a little nervous and thinking that maybe Anthony (LeBlanc, the Coyotes' president) is selling the team, but that's not close to what's going on. This would be an infusion of more money into the club, allowing them to do more. They're not going anyplace" (AZCENTRAL.com, 10/3). ESPN.com's Scott Burnside cited sources as saying that although details of the exact purchase amount "weren't revealed, the value of the team will go up significantly, up to twice its sale value." If the deal, initially proposed by Barroway, "is completed it's not believed there would be any significant change to the Coyotes' business structure in Arizona or to the team's hockey operations department." The infusion of cash through the sale to Barroway "would in theory give the team more flexibility with its payroll" (ESPN.com, 10/2).
BE CAREFUL WHAT YOU WISH FOR: The GLOBE & MAIL's David Shoalts writes the problem for IceArizona and Barroway "is the same as it was for all the previous owners -- despite any claims to a successful first year, the Coyotes’ cash flow is not enough to service the franchise’s enormous debt." The team’s hockey-related revenue for the '13-14 season "was said to be just" US$40M, "last among the NHL’s 30 clubs" (GLOBE & MAIL, 10/3).
