Islanders : Wang Sells But Questions Remain

Posted on Aug 20 2014 - 12:00pm by Andy Graziano

Who says hockey news is slow in August?

IslandersAfter a summer in which the New York Islanders made tons of noise off the ice with acquisitions and upgrades to the lineup, they continue to generate plenty of sound from the boardroom as well.

Vote of confidence for the coaching staff so they don’t feel like lame ducks? Check.

Goaltending an issue? Trade for and sign Jaroslav Halak and sign Chad Johnson. Check.

Forward depth an issue last season after a rash of injuries? Sign Mikhail Grabovski and Nikolai Kulemin. Check.

Replace Peter Ruttgaizer on the pre and post game show with Shannon Hogan to usher in a new era before Barclays? Check. (although, admittedly, that was an MSG Network decision and really had nothing to do with the Islanders themselves).

But wait….there’s more.

The sale. Islanders fans all around social media were waiting (impatiently) for Charles Wang to move on from owning the club for the past 15 years which has seen seemingly endless rebuilds and a failure to make an impact in the National Hockey League standings.

Frustrations were heightened to a fever pitch when it was found that Andrew Barroway, a hedge fund manager based out of Philadelphia, was in talks to acquire the club from Wang for the price of 420 million dollars then later backed out when he was alerted that there was a better offer and his ‘handshake’ deal with the current Islanders owner would not be honored.

Rumors of a second party were in question. Was Wang just playing Barroway to get him to up the ante to a new asking price of 548 million? After the National Basketball Association’s Los Angeles Clippers sold for 2 billion dollars, one could not fault Wang for seeing if he could maximize his return and cut into his alleged 20 million dollar per year losses.

In business, things change daily. It is a very fluid situation and anyone who has had experience in the business or financial markets knows that nothing is done until all the official paperwork is signed, sealed and delivered as the saying so appropriately goes.

As things would turn out, there was indeed a second group that came in with the higher offer than Wang sought.

Jonathan Ledecky, former co-owner of the Washington Capitals with Ted Leonsis and outlet mall conglomerate Scott Malkin were the pair that stepped up to the plate and paid the new bounty for what was once one of the most glorified franchises in hockey history.

Anyone who looks at the Forbes valuation of the Islanders (under 200 million) should understand that potential owners take a look at the future valuation of a franchise based on where they are going, and not where they have been.

With the roster re-shaped and Barclays Center (along with its guaranteed revenue stream) looming on the horizon, the reason Wang was able to get almost 5 times the Forbes valuation seems pretty clear.

The Islanders released this presser to members of the media after the sale was announced through New York beat writer Arthur Staple.

Islanders
People who have been a fan of this team for a long time and have seen the rapid decline from Stanley Cup champion to mainstream media folly in combination with the new generation of Islanders fan who have lived through the successes of the New Jersey Devils and New York Rangers deserve to have some good news thrown in their direction.

News that gives them hope outside of signings and trades. A message that the team is indeed moving forward in a new direction, one where the light at the end of the tunnel is very much on and shining bright and not just a dead end from which they have to turn around and go back to the station.

But there are still questions that will have to be answered over the coming months before the National Hockey League board of governors vote on the sale terms in December of this year.

With Charles Wang being in majority control for the next two years before the new group takes over, what kind of influence, if any, will they have in front office personnel decisions?  The safe assumption is that most, if not all, of what we see at the top of the Islanders organizational food chain will remain untouched for the foreseeable future. Garth Snow will remain the team’s general manager and Jack Capuano, albeit on a shorter leash than ever before, will be the head coach. But I would think they have to really put on a show to impress their future bosses to stay in those positions of power.

What impact will the Andrew Barroway lawsuit have on the sale? Many assume, and rightly so, that Barroway will not go quietly. He is a jaded former potential owner of the team and has taken steps to embarrass Wang with publicity that we all know Charles hates with a passion. He must know that a handshake deal is not going to hold much weight in court and will probably file an injunction, placing the finalizing of the deal in limbo until his litigation is dealt with. Does he accept the 10 million dollar ‘back-out’ payment from Wang and settle out of court? There is only one person who knows the answer to that question and it sure isn’t me.

How does this affect the move to Barclays Center? Do the Islanders actually have a chance to re-locate or possibly even come back to Nassau Coliseum? My first thought on this is no and no. The National Hockey League has by-laws in place that prevent a new owner from moving the club to a new destination for seven years. Barclays Center has been dying for another tenant to pair with the New Jersey Nets and the Islanders failed negotiation with Long Island politics provided what seemed a perfect marriage. A guaranteed revenue stream does not hurt either. Brett Yomark and company will be paying 50 million assured for the life of the lease and with television contracts, New York is sitting pretty 70-80 million in the black before each season even starts.

As far as the Coliseum goes, I would doubt Kate Murray and her band of politicians would all of a sudden turn around and welcome the discussion. Especially with Bruce Ratner and his group’s plans to build a smaller venue that might hold the American Hockey League affiliate now based in Bridgeport.

What do we really know about Ledecky and Malkin? Well, there has been hardly a comment from either with the news being so new and the Islanders themselves declining comment until the BOG approval. We can only go by past history and quotes from people who have worked with the pair. Dominik from Lighthouse Hockey had a fabulous summary of them in his column yesterday, which you can read right here. No sense in me re-hashing it when he did such a good job.

For now, nothing changes on the ice. Capuano has to lead his troops into training camp on September 18 and they all have to own the same mind-set they had on Monday. There will be a lot of decisions to be made in regards to line combinations, player cuts and possible trades to upgrade the defense.

With or without a trade on the blueline, this promises to be one of the most competitive camps the organization has ever seen.

Even when all the questions are answered and full terms of the sale are released to the media, the team will be defined as they should be.

Wins, losses and their final standings place in the Metropolitan Division.

The Stanley Cup does not care who owns the team. It presents itself as a shiny 34.5 pound reminder that the team with the most heart and soul gets privileged to a summer romance.

 

Andy Graziano

Andy Graziano

Founder / Editor-in-chief at Islanders Insight
Andy lives in central New Jersey with his wife of 24 years and 2 children. He is a credentialed member of the New York Islanders media as part of the exclusive blog box and founder of Islanders Insight. He played and coached the great game of hockey for over 35 years and has written for THW as well as Fansided.
Andy Graziano

@tazman19

Credentialed Islanders journalist - Founder & Editor-in-chief for http://t.co/TVy1jMRdcM as well as a proud member of the NYI Blog Box.
@bsrisles1971 better now than later I guess. Best of bad situation. - 29 mins ago
Andy Graziano
  • nbw

    Nice read. I think the two minority owners will infuse cash as they certainly do not want to see their investment wither. As for Snow, in Wang’s eyes he is a hero. Net, net, the Isles sale was over 200M more than value. Allot has to do with JT, current roster and prospects. Add an 25 yr lease and the guaranteed income, a NY domain, and I believe the 2 Harvard boys saw an undervalue property and outbid all Good things lie ahead as Barroway is just a speedbump in the journey which I strongly believe will be an great future

  • http://islandersinsight.com/ Andy Graziano

    Thanks nbw for the read. I agree with all the comments you made. And to think about it another positive way for the Islanders and their passionate fanbase, Barroway (outside of failing to purchase the Devils) has no hockey background whatsoever. Ledecky has ‘been there-done that’ in regards to his co-ownership of the Capitals and brings that NHL experience to the table.

  • http://www.islandersinsight.com wannabe D&C podcast intern

    i think people dont realize that with the move to brooklyn we can slap brooklyn on as much merchandise as we want and we will have a hard time keeping stock. its such a universal market that people everywhere will find the franchise attractive. just look what it did to the nets

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