Katz bids to buy Oilers

[Hootch]

This sucks. I guess we're aiming to be the Chicago Cubs of hockey. Woo!

[IKAN104]

There's no reason to think things would be any better under new ownership. The EIG is spending up to the cap. The team is profitable. And they are planning to build a new arena downtown.

The only thing is if Katz owned the team we wouldn't have to worry so much about who pays for the arena.

[Harrison]

Originally Posted by IKAN104

There's no reason to think things would be any better under new ownership. The EIG is spending up to the cap. The team is profitable. And they are planning to build a new arena downtown.

The only thing is if Katz owned the team we wouldn't have to worry so much about who pays for the arena.

Exactly!

[christopherj]

Originally Posted by IKAN104

There's no reason to think things would be any better under new ownership. The EIG is spending up to the cap. The team is profitable. And they are planning to build a new arena downtown.

FWIW:

- The EIG didn't spend to the cap last year, and is still $5 million off this season. This isn't to say that spending to the cap would make them a better team - just that they have NOT done so since the cap was implemented.

- There is no commitment to spend to the cap unless they are winning. But do they consider that they are not winning because they are not spending to the cap? (honestly, I wonder if the impression that the EIG is cheap affects the team getting free agents...)

- Planning to build a new arena downtown. Very good. But they need to finance it like Katz was willing to as well.

[IKAN104]

They may not have spent to the cap but they've indicated that they are willing and able. And isn't that what matters?

As for the arena funding, you are basically saying what I said as well. The funding with the EIG is much more uncertain.

[Jasper and one o nin]

‘Ownership group best for Edmonton, Oilers’
Nichols says investors group will do what it takes to build winning team and new arena
BILL MAH
EDMONTON
Not only was billionaire Daryl Katz offering $185 million to buy the Edmonton Oilers, he was prepared to throw in $100 million towards a new arena. It still wasn’t enough. The Edmonton Investors Group rejected Katz’s offer Tuesday and formally declared the team is not for sale.


“This morning, our shareholders voted resoundingly to reject this offer,” said Cal Nichols, chairman of the 33-member owners’ group who met Tuesday.


“The second thing we did this morning was we had a motion and a vote and declared the Oilers are not for sale,” Nichols said.


“This is not about dollars. This is about Edmonton. An ownership group is bestsuited for Edmonton and the Oilers.”


The group received a formal offer of $185 million on July 11 from the Katz Group, Nichols said.


But after capital adjustments and tax considerations needed to convert the offer to a per-share value and the payout of possible employee severance liabilities, the bid would actually fall closer to $136 million, Nichols said.


But a source close to Katz told The Journal there was more on the table, namely a conditional offer to help replace aging Rexall Place with a new rink.


“Under the right circumstances, Daryl is prepared to invest on the order of $100 million towards a new building,” Katz Group spokesman Josh Pekarsky said.


The offer, which hinged on Katz buying the team and the public supporting a new arena, died when the EIG rejected Katz’s bid. It’s the first time a specific dollar amount has been attached to Katz’s public offer to invest in a new arena.


According to a study commissioned by Northlands, which operates Rexall Place, the arena can be expanded and modernized for $250 million. A ninemember arena feasibility committee is investigating the merits of a new rink, possibly downtown.


Mayor Stephen Mandel has told The Journal that Edmonton taxpayers will not foot the bill for a new downtown arena, roughly forecast to cost about $500 million.


He was unavailable for comment Tuesday, but a spokeswoman said his comments stand.


It was the third attempt by the Edmonton owner of the Katz Group drugstore conglomerate to buy the club.


In March he started approaching the investors about the possibility of buying the team. He came forward with an offer of $145 million. He made a second pitch to the board of directors to buy a majority of shares for $150 million, then went straight to the shareholders with his latest offer.


Katz issued a brief statement Tuesday, saying he still backs the Oilers financially and personally.


“Clearly, I’m disappointed that the ownership group has elected not to proceed with a sale but I accept their decision and wish them well,” a statement attributed to Katz said.


“As an Oilers fan and the franchise’s largest corporate sponsor I will continue to be a major supporter of the team.”


Katz would welcome a serious proposal from the investors’ group to sell the team, but he does not intend to make another offer, his spokesman Pekarsky said.


Katz has no desire to buy another NHL team, he added.


The reclusive billionaire issued a statement on July 24 declaring he would not only invest in a new downtown arena and training centre, but that he would build a winning team by spending as much as the NHL’s salary cap would allow.


At a press conference, Nichols said the current owners— who came together in 1998 to keep the team in Edmonton — are already taking steps to build a winning team and develop a new arena.


He defended the investors’ track record of putting money back into charities and the community, its role as stewards of the team, and said the idea of large ownership groups is the trend in professional sports, citing the Nashville Predators, San Francisco Giants and Milwaukee Brewers.


“We’ll keep the team competitive, spend to the cap if and when the opportunity of winning presents itself, and we’ll lead and invest in a new arena,” Nichols said.


The investors group was the first to champion a downtown arena in October 2005, he added. A committee, including Nichols, is exploring the idea of a new arena to report back later in the year. A cash call from the owners could be one way to raise money for a new rink among several other options, Nichols said. “Until we get a recommendation back from the committee later this year, we don’t know some of the answers.”


The investors voted by secret ballot and Nichols declined to elaborate on any dissent within the group at the meeting.


But Nichols did say Katz’s attempts to buy the team have caused “collateral damage” and he hoped the outright refusal brings closure to a vocal debate that has divided the group and the wider community since Katz’s first offer.


“I hope that this, at least for the near term, puts an end to the offer thing because this has been a bit of a circus for four months.”


“The organization needs stability and that’s what we’ve always stood for and that’s going to be our first priority.”


Nichols said rejecting the sale doesn’t mean the door is slammed on a newcomer buying shares in the Oilers from a current owner. “It’s up to the shareholder when and if he wants to sell it,” Nichols said.


“I’ve had a number of inquiries, taps on the shoulder, that said if you need new capital come and talk to me. There’s some very good strategic partners out there.”


Katz is not interested in less than 100per-cent ownership of the team, Pekarsky said.


But the door might still be open for Katz’s future involvement with the development of a new arena.


“I suppose it’s possible that he would have some kind of involvement, but clearly the business case for his involvement is greatly diminished by the fact that he won’t own the team,” Pekarsky said.


Daniel Mason, a University of Alberta professor, who studies the link between cities and sports facilities said in cases where sports team owners get involved in funding facilities, they’re often more interested in the broader development opportunities.


“They’re more willing to invest more money because they can access the revenues that come from the other amenities in addition to the arena,” Mason said.


He said Katz’s $100-million offer may not have been enough to convince Edmontonians to build a new arena if the public had to pay the rest of the cost.

[murman]

Originally Posted by Jasper and one o nin

The group received a formal offer of $185 million on July 11 from the Katz Group, Nichols said.

But after capital adjustments and tax considerations needed to convert the offer to a per-share value and the payout of possible employee severance liabilities, the bid would actually fall closer to $136 million, Nichols said.

re. the stuff I've bolded, that figure would be mere pennies compared to the quantum of the gross figure. They're really grasping at straws on that one.

[newfangled]

So the $100M towards a new arena was contingent on Katz' purchase of the Oilers. This makes sense, because he'd get ticket/media/merchandise revenues to go along with whatever share of the arena revenues would be his. Fine - it's business.

But what about the U of A training facility? How is a commitement to a university facility affected in any way by whether or not Katz owns the Oilers? I realize that it was probably just thrown in as a carrot to build community support for Katz, but it's not business - it's philanthropy. I don't see why the Oilers should enter in to it.

[ExcaliburKid]

Originally Posted by sync

the EIG better keep this team competitive in ALL ways - that means spending to the cap, and securing a new arena at least.

Yep, my thoughts exactly. Now that Katz has Oiler fans and Edmontonians drooling over stacked teams and a sweet new downtown arena, the EIG better not drop the ball. Im getting seriously concerned with the stranglehold Oiler alums have on this team. Its looking very mafia-like to me, and I cant see it ending anytime soon. Dont disappoint me EIG

[christopherj]

Originally Posted by newfangled

But what about the U of A training facility? How is a commitement to a university facility affected in any way by whether or not Katz owns the Oilers? I realize that it was probably just thrown in as a carrot to build community support for Katz, but it's not business - it's philanthropy. I don't see why the Oilers should enter in to it.

Where has Katz said he still won't pursue this?

[Midijunkie]

hi there...new to the forum...This is an interesting read regarding this situation...cheers

http://communities.canada.com/edmont...x/default.aspx

Offer sheets; offer sheets
The Edmonton Investors Group plays by its own set of rules and certainly had no obligation to sell the Edmonton Oilers to local billionaire Daryl Katz, that’ s a given.
But some of the self-serving nonsense that has been advanced by board chair Cal Nichols has been more than a bit much. Some of it has been offensive.
The ownership group that Nichols chairs was fashioned from the chaos of the crumbling financial holdings of former owner Peter Pocklington. It was born of necessity.
A decade on, it turns out that not merely group ownership, but this particular group with its own, clubby ‘pick-your-partners’ barriers to entry is the best possible governance structure for the Oilers. The best structure, as defined by the current ownership group, is the current ownership group. Gee, how convenient.
As self-justifications go, this is mostly harmless wind. And the truth is, the EIG has done a good job. The Oilers are a well-run business. But there are other ways to go and the proof is in the numerous thriving franchises around the league led by a single owner.
Like the last two Stanley Cup winners: Anaheim, owned by Henry and Susan Samueli; and Carolina, owned by computer magnate Peter Karmanos.
Pizza boy Mike Illitch seems to do all right in Detroit and so does Ed Snider in Philadelphia. The good times are rolling for Canadiens owner George Gillett —literally. The Canadiens owner just bought a NASCAR team, to go along with his part ownership of Liverpool in the British premiership.
Eugene Melnyk, a single owner, rescued the Senators from the oblivion that former majority partner Rod Bryden spent a decade fruitlessly trying to lead his myriad minority partners out of.
The community argument here against a single owner seems to be rooted in a deeply seated belief in the boogeyman and a distrust of individual excellence. The Oilers had a single owner named Pocklington, who turned out to be a bad man. He broke the fans’ hearts, therefore single ownership is inherently bad.
What childish claptrap!
There’s more than a faint whiff of a smear job in trying to insinuate that Katz, a wildly successful local businessman, U of A grad and philanthropist is Pocklington revisited. But that connection has been made by some members of the media. And that’s wrong. And cheap, besides.
As much as anything else, pro sports today is about brand management. The current group is excellent at it. So, rather obviously, is Katz. In an NHL where Oilers icon Mark Messier’s newly minted leadership award is sponsored by Cold F-X, the synergies between a trans-national drug-store empire and an NHL franchise are obvious.
Which approach is best? Hard to say. Each side has merit. The 40-something Katz, clearly, is younger than the EIG members and on a high-octane roll. That’s bad? He might have injected some welcome fresh ideas and energy into both the Oilers and the NHL. Impossible to know now.
But there was nothing even remotely negative about Katz approaching the Oilers and making them not one, but three offers. And it was disingenuous, if not outrageous for Nichols to suggest otherwise.
Nichols spoke Tuesday about how the four-month give-and-take between Katz and the Oilers had been a “bit of a circus,” and caused “collateral damage.” Puh-leeeeze!
This from a board chair whose GM, Kevin Lowe, mucked about in the payroll of the Buffalo Sabres by signing Thomas Vanek to a seven-year, $50-million offer sheet. Then raided the Stanley Cup champion Ducks by signing first-year player Dustin Penner to a five-year $21.25-million contract, handing the player a tenfold raise?
Collateral damage? You betcha. And lots of it. Just ask Buffalo GM Darcy Regier or Anaheim manager Brian Burke.
Hey, just business, said Lowe. Just so.
And so was Katz’s $185-million offer just business. An offer, by the way, that woud have handed all 33 members of the EIG handsome returns on their investments. Collateral damage? That’s laughable. Unless you believe the supposedly sainted EIG should be left alone to run the Oilers without being subject to grubby business realities like purchase offers.
Nichols and the EIG did the city a major service in rescuing the Oilers and keeping the franchise viable over the last decade. But there was and is more, much more, than pure altruism at work there.
There is a major ego rush associated with being an NHL franchise owner, even a part-owner. And keep in mind that all the Oilers owners, including Nichols, have collectively enjoyed that cachet and clout, been part of an important and exclusive little club in this city by, individually putting up a tiny fraction of the $185 million Katz was prepared to pony up to buy out the Old Boys’ club.
And if Edmonton would have been a diminished city without the Oilers, then it would have hurt the businesses the EIG members run in their real lives, as well. Saving the Oilers helped their enterprises, as well. Which is a perfectly legitimate justification for their actions. It just isn’t a qualification for secular sainthood.
In the end, apparently, that ego rush, that enlightened self-interest, the civic clout that comes with the territory, is worth well more to the EIG members than Katz’s final offer.
Fair enough. It’s their club, after all. And an exclusive, very private one, at that.

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Posted Wednesday, August 08, 2007 9:50 PM by John MacKinnon | 0 Comments
Filed under: Oilers ownership

[SHOFEAR]

I lost a ton of respect for the EIG and especially Cal Nichols over this.

The EIG was supposed to be a ownership group that got involved because of their love for the city. Nobody signed up with the intention of making money each year but now that the Oilers are one of the most profitable teams it's suddenly no longer about doing what is best for the city/Oilers. It was time for a local billonaire to take this team to the next level and the EIG denied us that chance.

Most unfortunate was Cal Nichols interview on Prime Time Sports where he flat out lied about the situation. Calling it a circus was an un called for slam against Katz, ironically the only circus part was the EIG's embarrasing response. Most fustrating he rationalized that by saying Edmontonians have no clue what's happening and he feels the media and Edmontonians believed Katz offer had to do with financial problems with the EIG and the team. The exact opposite is true, every person has made the connection that Katz's offer shows the value and strength of the Oilers...something that was not the case a few years ago.