TSN: Charles Wang in talks to sell majority stake

[_illicit_]

Comparing the potential sale of a sports team to possible terror attacks is not only extreme but apples and oranges. That said, how many terror threats turn out false? Far more than turn out to be real.

A better analogy would be the weather people who predict two feet of snow only to come on the next day and try to explain how the storm moved out to sea or never developed.

My point is we have no proof that talks are actually happening. We have the current owner who has stated he is listening and is not even sure what he will do, the commissioner who is saying there is interest, but neither, nor a potential suitor, has come forward to state talks are in progress. Yes, there have been others in the media and those with "supposed" inside insight that say talks are in progress, but no one from an official level or even close to an official level has confirmed such.

Again, no one wants Wang out more than I, but I am not getting the least bit excited until something concrete comes out.

Just because you require solid proof before you engage in conversations on an internet message board, doesn't mean everyone else has to follow suit. You coming in after every link to a news story and saying how it isn't really a story 'yet' is quite annoying. Just sayin..

 

[Bunk Moreland]

Botta's got a little update:

The New York Islanders this week released an offering memorandum for majority ownership to potential bidders for the team, according to a source in the finance industry.

In the memo, Islanders owner Charles Wang offers 75 percent ownership of the club, with a five-year option on the other 25 percent. The memo also states that the Islanders sustained an operating loss during the 2013-14 season of $4.8 million, with the loss minimized greatly by $15 million received from NHL revenue sharing and escrow payments.

According to the memo, total revenue for the Islanders in the just-completed season was $84 million. That included $22 million in ticket revenue. The Islanders played 40 home games at Nassau Veterans Memorial Coliseum and one game (as part of the NHL’s Coors Light Stadium Series) as the home team at Yankee Stadium against the New York Rangers.

Also goes on to rule out Nelson Peltz as a potential owner and continues the $370mil price tag.

http://www.sportsbusinessdaily.com/SB-Blogs/On-The-Ground/2014/04/0425-NHL-Shift.aspx

 

[lorwood]

The problem with any move back to Nassau is, how do you keep the corrupt greedy hands of Nassau politics from once again bankrupting the team? If I remember correctly Nassau county will still own the NVMC after the revamp.

 

[lorwood]

Botta's got a little update:



Also goes on to rule out Nelson Peltz as a potential owner and continues the $370mil price tag.

http://www.sportsbusinessdaily.com/SB-Blogs/On-The-Ground/2014/04/0425-NHL-Shift.aspx

I wonder if the memo release is part of the process being started after Wang agreed with Barroway (or whatever his name is) to the 75 25 split for the first five years giving Barroway some time to come up with the rest of the scratch.

 

[blitzkriegs]

I wonder if the memo release is part of the process being started after Wang agreed with Barroway (or whatever his name is) to the 75 25 split for the first five years giving Barroway some time to come up with the rest of the scratch.

It's Wang doing 'for sale by owner' the cheap way. Notice this gem "who has yet to utilize the services of a bank or financial consultants in the ongoing sales talks." Yeah, because those people WANT to see the books before participating in any sale to determine whether the valuation will actually attract buyers. Unbelievable.

 

[seafoam]

I wonder if the memo release is part of the process being started after Wang agreed with Barroway (or whatever his name is) to the 75 25 split for the first five years giving Barroway some time to come up with the rest of the scratch.

This was the first thing that came to my mind.

With the leak that he reached out to Shanahan about a position in the organization, and the propsed memo that would give Barroaway 75% ownership immediately with the five year financing option, I think it's pretty clear that Barroaway wants majority ownership of the franchise, sooner rather later.

 

[lorwood]

This was the first thing that came to my mind.

With the leak that he reached out to Shanahan about a position in the organization, and the propsed memo that would give Barroaway 75% ownership immediately with the five year financing option, I think it's pretty clear that Barroaway wants majority ownership of the franchise, sooner rather later.

The numbers (75/25) just seem very specific. Why not just say a majority ownership of the team is for sale with a five year option to obtain full ownership?

 

[OlTimeHockey]

I'm generally pro-Brooklyn and don't think it's realistic at this time to start thinking about the Isles returning to NVMC. However, all this lease-breaking talk has to consider the fact that the landlord at Barclays also will be operating the NVMC, right? (Or maybe I have that wrong?) So couldn't they leave Brooklyn and go to NVMC by agreement if it's in the financial interests of both landlord and tenant?

I can't imagine that when they do the NVMC renovations they won't at least consider the possibility that they may want to add more seats someday down the line. I'm not sure if that possible/practical, but if they have the chance to leave that opportunity open during the renovations, I'd think they would.

You hit the nail on the head. Ratner will have a big interest in TWO buildings succeeding. If Brooklyn's layout is a detriment, Ratner has a solid interest in filling the newly renovated NVMC and surrounding development with paying customers.

If Ratner wants the Isles to move, it's his call so long as Wang, or a buyer sent by the Almighty to help Isles fans, want the team to move back. Look for diminished attendance and fan feedback being less than positive. Ratner then has two choices:

A perfect arena for the Nets which can host amazing concerts and holds forty one dates of crammed in Isles hockey outside the fanbase's epicenter, more well, well within the NYR's fanbase epicenter, not selling AND a Nassau Coliseum holding second tier and second stage concert events on limited nights unless it can compete for dates after renovation {not a ton of money for the investment in NVMC?}

OR

A perfect basketball arena with concert dates selling out AND a perfect {debate} hockey arena with potential concert dates of varying amounts?

BOTH arenas need dates to recover the pricetags of investment.

The second makes sense, especially with a large LI population likely refusing to make the long commute to Brooklyn nearly as much as they would a centered Uniondale.



The second hopefully gets decided on soon if there's any chance. As someone else also agreed in a prior post - they have to invest in luxury boxes and revenue generating changes before the renovation commences.

 

[Nelly]

Botta's got a little update:



Also goes on to rule out Nelson Peltz as a potential owner and continues the $370mil price tag.

http://www.sportsbusinessdaily.com/SB-Blogs/On-The-Ground/2014/04/0425-NHL-Shift.aspx

I like it.

Can't secure a line of credit for 370 million? No problem, only come up with the 278 million, and you have 5 years to get financing for the balance.

It should open the doors to more potential buyers.

 

[blitzkriegs]

they have to invest in luxury boxes and revenue generating changes before the renovation commences.

You need corporate support to fill those boxes, on LI there is barely any. So, good luck with that.

I also like how you left out the 'selling out' part in option 2 with regard to the hockey team.

 

[OlTimeHockey]

You need corporate support to fill those boxes, on LI there is barely any. So, good luck with that.

I also like how you left out the 'selling out' part in option 2 with regard to the hockey team.

Just saying it could happen...I doubt it will. But this whole scenario would obviously depend MIGHTILY on LI/NY rebounding economically.

I have more faith in Garth Snow than the NY/LI government.

ONE ADDENDUM.....

Canon once sponsored NVMC. Many banks have/can. NO ONE is lining up to sponsor the Wanglanders and the abject negligence seen by this or the seven prior owners. {did I get that right? Gang of Four, Spano, Milstein, Gluckstern.....advertisers want a piece of that action!}

You have a stable owner who infuses talented management {Shanihan et al} and the arena is owned/leased by Ratner.....it doesn't matter what LI corporations are left. If there is a dense enough population with disposable income and purchasing power, advertisers can come from Namibia for all I care. Their name gets out. So the LI businesses thing is overblown if the team/organization/arena management appeals to the risk reward measure. Does it not?

Or does Budweiser have a local operation in several hundred cities across the globe?

 

[Tietj]

LOL

Don't get your hopes up.... contracts tend to be legally binding. My guess is majority ownership is transferred to the Barclays group, with Wang holding a minority share. Eventually he will sell off all ownership rights.

Edit: I've been saying this since the move to Brooklyn was announced. The only reason Wang had interest in the Islanders was for that land.

Not true. He thought the arena would be replaced or rebuilt, but it wasn't until 2003 that the county told Wang they (Nassau) could not afford to replace the Coliseum and that he (Wang) should come up with his own plan. That's what started the lighthouse project.

 

[blitzkriegs]

Just saying it could happen...I doubt it will. But this whole scenario would obviously depend MIGHTILY on LI/NY rebounding economically.

I have more faith in Garth Snow than the NY/LI government.

ONE ADDENDUM.....

Canon once sponsored NVMC. Many banks have/can. NO ONE is lining up to sponsor the Wanglanders and the abject negligence seen by this or the seven prior owners. {did I get that right? Gang of Four, Spano, Milstein, Gluckstern.....advertisers want a piece of that action!}

You have a stable owner who infuses talented management {Shanihan et al} and the arena is owned/leased by Ratner.....it doesn't matter what LI corporations are left. If there is a dense enough population with disposable income and purchasing power, advertisers can come from Namibia for all I care. Their name gets out. So the LI businesses thing is overblown if the team/organization/arena management appeals to the risk reward measure. Does it not?

Or does Budweiser have a local operation in several hundred cities across the globe?

If Westfield sponsored the arena, than I could see a sellout... I just don't see enough corporate support for luxury boxes plus premium corporate seats at premium prices.

 

[Tietj]

I'm generally pro-Brooklyn and don't think it's realistic at this time to start thinking about the Isles returning to NVMC. However, all this lease-breaking talk has to consider the fact that the landlord at Barclays also will be operating the NVMC, right? (Or maybe I have that wrong?) So couldn't they leave Brooklyn and go to NVMC by agreement if it's in the financial interests of both landlord and tenant?

I can't imagine that when they do the NVMC renovations they won't at least consider the possibility that they may want to add more seats someday down the line. I'm not sure if that possible/practical, but if they have the chance to leave that opportunity open during the renovations, I'd think they would.

Interesting thought, but the Islanders owner, whoever that will be, would only want to break the lease if the deal in Nassau would be better than the deal in Brooklyn. In Brooklyn the revenue stream is guaranteed for the Islanders regardless of attendance.

 

[Dutch Frost]

I love the "keep them in Nassau" talks. If I am spending 375 million dollars which is an insane price for a bottom barrel NHL team then I am keeping them at a place where I can get the most bang for my buck and that is the Barclays.

Not to mention, the new coliseum will fit only 10k. Good luck selling that to a new owner.

If the Islanders are worth 375 million then the Rangers have to be worth 500-750 million easy. Are we really putting hockey teams at the same value of European soccer clubs??

 

[MJF]

You need corporate support to fill those boxes, on LI there is barely any. So, good luck with that.

I also like how you left out the 'selling out' part in option 2 with regard to the hockey team.

Why wouldn't the same corporations that have suites at Barclays and MSG and Yankee Stadium and CitiField take on the same thing in Uniondale? After all, many of the people they are wining and dining live on the Island.

Companies will always want to attach their names to a successful team no matter where they play.

 

[MJF]

Just saying it could happen...I doubt it will. But this whole scenario would obviously depend MIGHTILY on LI/NY rebounding economically.

I have more faith in Garth Snow than the NY/LI government.

ONE ADDENDUM.....

Canon once sponsored NVMC. Many banks have/can. NO ONE is lining up to sponsor the Wanglanders and the abject negligence seen by this or the seven prior owners. {did I get that right? Gang of Four, Spano, Milstein, Gluckstern.....advertisers want a piece of that action!}

You have a stable owner who infuses talented management {Shanihan et al} and the arena is owned/leased by Ratner.....it doesn't matter what LI corporations are left. If there is a dense enough population with disposable income and purchasing power, advertisers can come from Namibia for all I care. Their name gets out. So the LI businesses thing is overblown if the team/organization/arena management appeals to the risk reward measure. Does it not?

Or does Budweiser have a local operation in several hundred cities across the globe?

Dead on balls accurate.

 

[Nelly]

The numbers (75/25) just seem very specific. Why not just say a majority ownership of the team is for sale with a five year option to obtain full ownership?

I'm pretty sure it's because Wang wants at least 281 million for the transaction rather than 191 million.

 

[BillD]

I think the numbers released in the offering are quite surprising
Revenue of $84MM with $22MM coming from ticket sales and $15MM from league revenue sharing and escrow (this is a 1/2 share!).
The team lost $4MM. The math is quirky.
It is understood that the cable contract pays us $27MM in this phase, incrementally increasing.
How did they lose $4MM with a player payroll at close to the cap floor ($43MM)?
The team spent $45MM on management, coaching, executive, back office, insurance, payroll taxes, travel, debt service?
Assuming the $22MM was ticket sales of walk-ups that SMG didn't get their greedy hands on.
Still, that level of spending does not sound correct, actually greater than what should be the largest expense, player payroll.

 

[Isles Fan]

Just saying it could happen...I doubt it will. But this whole scenario would obviously depend MIGHTILY on LI/NY rebounding economically.

I have more faith in Garth Snow than the NY/LI government.

ONE ADDENDUM.....

Canon once sponsored NVMC. Many banks have/can. NO ONE is lining up to sponsor the Wanglanders and the abject negligence seen by this or the seven prior owners. {did I get that right? Gang of Four, Spano, Milstein, Gluckstern.....advertisers want a piece of that action!}

You have a stable owner who infuses talented management {Shanihan et al} and the arena is owned/leased by Ratner.....it doesn't matter what LI corporations are left. If there is a dense enough population with disposable income and purchasing power, advertisers can come from Namibia for all I care. Their name gets out. So the LI businesses thing is overblown if the team/organization/arena management appeals to the risk reward measure. Does it not?

Or does Budweiser have a local operation in several hundred cities across the globe?

The NVMC has never had naming rights nor a sponsor. It has always been the NVMC. Canon may have advertised there, but the never sponsored the NVMC unless I am misunderstanding your use of the word sponsor in this context.

 

[airbus220]

It's Wang doing 'for sale by owner' the cheap way. Notice this gem "who has yet to utilize the services of a bank or financial consultants in the ongoing sales talks." Yeah, because those people WANT to see the books before participating in any sale to determine whether the valuation will actually attract buyers. Unbelievable.

This shows you exactly how far they are in the negotiations.

 

[periferal]

I love the "keep them in Nassau" talks. If I am spending 375 million dollars which is an insane price for a bottom barrel NHL team then I am keeping them at a place where I can get the most bang for my buck and that is the Barclays.

Not to mention, the new coliseum will fit only 10k. Good luck selling that to a new owner.

If the Islanders are worth 375 million then the Rangers have to be worth 500-750 million easy. Are we really putting hockey teams at the same value of European soccer clubs??

You are 100% correct and so obvious. Why do obvious things like this need to be explained to so many around here?

It's like those people who still support Wang on any level. Why do you not see the last 13 years of Islanders "hockey" as proof we need a new owner to win the Cup?

 

[Ziggy16]

ratner did an interview like a few weeks ago.. i think when asked, he said he WASNT tearing seats out from the coliseum in his plan, merely putting up a temporary wall to close a section off, that could come down later to restore the 16K seats... since the bulk of his reno work revovles around the outside and councourse areas...

 

[Riseonfire]

ratner did an interview like a few weeks ago.. i think when asked, he said he WASNT tearing seats out from the coliseum in his plan, merely putting up a temporary wall to close a section off, that could come down later to restore the 16K seats... since the bulk of his reno work revovles around the outside and councourse areas...

Smart idea. Knock down the outer wall to expand the entire building/concourse area but keep the bowl intact.

 

[Dutch Frost]

ratner did an interview like a few weeks ago.. i think when asked, he said he WASNT tearing seats out from the coliseum in his plan, merely putting up a temporary wall to close a section off, that could come down later to restore the 16K seats... since the bulk of his reno work revovles around the outside and councourse areas...

Thats great for the coliseum.. to bad the Islanders wont move back there. Enjoy the final season and accept reality!!