A potential sale of the New York Islanders has been the talk of the social media and hockey world since news broke over the weekend that Charles Wang was in talks to turn over majority control of the beleaguered franchise.
As details began to be made public after a safe and scripted message by Wang himself (who was none too pleased with the leak), it seems to have created more questions than answers. Considering how long the sale of the Phoenix Coyotes took and the hurdles that kept occurring during that saga, there is absolutely no certainty to whether this will be a quickly completed transaction or one that drags into the 2014-15 season and beyond.
After news outlets Sports Business Journal and WFAN released their reports on just what was included in the Islanders agreement to move to Barclays Center beginning with the 2015-16 season, let’s summarize where we are and try to gather an opinion on where this could lead.
- The Islanders will receive a guaranteed 50mm revenue payment from Barclays Center each season.
- Barclays Center would keep anything over 50mm in sponsorship, suite and ticket sales.
- The Islanders will not pay rent for regular season games for the length of the lease.
- Already set in stone is the contract agreement covering TV rights with MSG network, which pays the team 27mm annually to 2031.
- The Islanders have one of the highest rated prospect systems in the game and already boast one of the best players in the league in John Tavares.
The New York Post was the first to break the story about the potential buyer being prominent Philadelphia lawyer Andrew Barroway, who is said to be offering 225mm plus 75mm more if certain revenue targets are hit.
Barroway worked for one of the leading law firms in the country as a partner for 17 years before founding his own hedge fund, Merion Investment Management in 2009. He loaned the New Jersey Devils 30mm to aid with their financial troubles, putting him already in the good graces of the National Hockey League hierarchy.
He has been dying to get into the sports ownership business for a very long time, according to several sources, and after a failed attempt to enter the National Basketball Association as owner of the Philadelphia 76ers as well as not being able to close a potential deal on the Devils, he has landed on the Islanders doorstep.
In an even more interesting development, Barroway was involved in the 2007 class action lawsuit against Wang and Computer Associates as a name partner.
With that development plus the fact that his bid for the 76ers failed because he could not come up with the cash leads to a sense of quiet skepticism.
The good news is that the consistent and guaranteed revenue stream for the club once the move to Barclays is complete should be enough to cover payroll and then some, leading some to believe that the frugal past might be finally coming to an end. According to sources, the Islanders would keep control over merchandising and retain the profits from such.
As it stands, just because a business is pulling in guaranteed revenue and is profitable, that is hardly a guarantee of free-wheeling spending ways. There are obviously many other overhead costs in running this type of operation that almost all of us could not even comprehend if put before us on a spreadsheet.
With what we know, why would Wang consider selling at all? Why not reap the rewards for the deal that he was responsible for striking with Barclays Center?
He is 69 years old after all and has owned this club, for better or worse, over the course of the last 14 years. Maybe it’s just a simple willingness to be done with it all and get the losses off the ledger as he winds down his career and settles into retirement.
Nobody knows the answer to that question other than Wang himself and all house money should be bet on never knowing the real reason behind the timing of it all.
For Islanders fans, it’s another wait and see game as the 2013-14 season winds down to its final stages and the players get ready to break for another early summer. Only time, and no amount of speculation, will tell the true story of what the organization will look like when they re-convene in September for training camp.