HERE COMES THE BOOM! Hyped Isles “Impending” Sale Doesn’t Pass the Litmus Test

boomisles

 

The Barroway “purchasing” the NY Islanders is one of the most hyped-up over spun stories with a lack of fact. That fans seem to be convinced that this purchase is happening is one of the most misguided disconnects between hope and fact I have seen in a while.

Though the NHL have made it known to prospective owners that the NY Islanders are for sale, there seems to be some assumption in lieu of actuality that Charles Wang wants to disconnect himself from the Isles and hockey operations. Nothing could be further from the truth. A percentage of the Isles is for sale, folks. Not sure why this is being ignored.

Everyone is in such a rush to leap there is a forgotten bevy of logic that does not give the assumptions the same grease as is desired by fans for an immediate change.

So let’s put on our swim trunks and wade right into the thick of these muddied waters….

 

Assumption #1: Charles Wang wants to step away from hockey and give someone else control….

Charles Wang, proverbial fan-blame pin cushion to a slower than desired rebuild and step backward, is still a important fixture and partner to the hockey ops of the organization. Besides that he has always been a vested part of the hockey operations, people seem to forget he has a vested stake is seeing it through. He will not step out of the way, and let’s also add NeuLion’s important and oft-forgotten entrenchment as a NHL partner and technology piece of the pie. A company that is poised to try to get on NADSAQ soon. Their partnership with the NHL is paramount for that effort.

This has been furthered echoed as percentages change and price hikes in the rumor-mill. No person who just wants to hand it off sticks to a hard line and price. Sorry.

I will do you one better by the very cited numbers in the formerly-retired Islanders blogger, Chris Botta, who gets pulled back in more than Al Pacino in Godfather 3.

In it he cites: “Philadelphia hedge fund manager Andrew Barroway is the lone suitor whose name has been made public.” – However he is NOT the lone suitor, as I announced on Twitter on April 21st.

Botta has also mentioned the same thing: “As reported in The Shift last Friday, there are at least two additional suitors for the Islanders, besides Barroway.”

We will see how long the additional suitor and/or suitors remain anonymous. My guess is not for very long.

Based on Botta’s cited numbers: the Isles only lost $4.8 million last year. Ok, take that and assume it is the loss next year…. And then add the GUARANTEED $50-52 million per year they get from Barclays. Nifty profit. Not the kind of amount that Charles is in a rush to wash his hands of so fast. You look at the profit margin and perhaps you can see why the price keeps going up once you sort through the murk here.

Just maybe Charles is finally in the driver’s seat and interested parties will need to be committed and have the cash in place to chase him. Charles is no spring chicken. He is a savvy and considered unflappable business man. He’s not blinking.  This is not as simple as made out to be. Nope, not one bit.

 

Assumption #2: Barroway is close on a deal. Didn’t you hear??? He’s close. It’s happening any time now.

…And I thought the Ice Girls were the only cheerleaders as this is repeated incessantly by fans.

Hope nobody is holding a breath here.

As I have said, and been told since, NOTHING is close. This has been echoed finally by others like Botta’s piece just the other day. I will go one step further…. It’s not going to move too fast either.

What is clear by the public display of information peaking out is that Barroway seems to be still seeking partners and money. This means he does not have enough to buy. Let me remind all the the NJ Devils were even less money and he came up short there as well. So the sale parade really needs a reality check on how much to this process is not at any juncture of inevitability by a long-shot.

Oh, and by the way, if it was anywhere near close there would be bankers, lawyers and all that accounting muck in those meetings and talks…. Something that IS NOT the case if we go by the reports of just talks between the business types. This is a ringing of a gong that all is not as close as everyone pushing.

As we hear more and more leaking out, it will give an even bigger hint that things are not quite where they should be. Last I heard, Barroway’s effort far from smooth sailing and might be in trouble. Isn’t this why he is reaching out to all the Isles alumni and anyone else who is listening? He needs cash flow.

 

Assumption #3: Barroway is the only interested buyer now that Syracuse Crunch’s Dolgan lost his $$$ backer.

Wrong, and this was said previously on twitter and this very article: There are more involved and out there. Stay tuned and remember I told you so.

 

Assumption #4: Charles and Garth Snow’s NY Islanders will not spend any $$$$ this summer.

As I said in the last blog and say again, this will not be the case this summer.

If the Isles do in fact spend or attempt to offer big $$$ during this upcoming free agency, this will make clear intention. For it will not be the move of a sitting duck owner looking to take a team off his hands. Maybe by then some of this will suddenly then bring some reality to the writers, bloggers, and fans so quick to sail off the flat Earth not realizing that there is a complex spherical amount of issues, items and realities that make this far different than what is being dumped into the social media ocean.

No, much like everything else has been on Long Island, this is far more complex and with no immediate answers, solutions nor changeover. This is something that could take a season or even be a three to five year process. Most of all, expect the powers that be to remain so.

 

Yes, a SALE might happen down the line. This is true. But where things are now and the process that is involved, it is far from an overnight process even IF Charles Wang says OK. Most of all, don’t expect Charles or the current GM Garth Snow to suddenly disappear even if an agreement is reached.

 

You can let out that breath now.

BD

Share this nice post:

Filed Under: Featuredfeatured-bloggersNew York IslandersNHL

Tags:

About the Author: B.D. Gallof is a published writer and hockey blogger. He writes about Hockey, NY Islanders & the NY Islanders venue situation for CBS New York. BD has been written up in Sports Illustrated, TSN.ca, the NY Times Slapshots blog, Yahoo's Sports and SportsBusiness Journal. He has been a featured blogger for The Huffington Post, as well as owner, lead writer, and managing editor at HockeyIndependent.com.

RSSComments (16)

Leave a Reply | Trackback URL

  1. John says:

    I also remember when you were 100% convinced that the Islanders weren’t going to Brooklyn. You have no credibility with educated Islanders fans. I’m sure you’re a nice guy, but professionally, maybe give something else a shot. Like iPad portraits.

  2. Candyman says:

    BD is a great writer and a good follow on Twitter. My only suggestion is to ease off of the “guarantee” tone that you always use. When it comes to writing, you often write like a fortune teller stating that something “will” happen instead of that it is “likely” to happen. You are right a lot, but if you make enough predictions some of them are bound to be right. However, your naysayers will forget those times and always remember the times you were wrong.

    • BDGallof says:

      Fair point.

      But still was told and was told that we could bet money on this…

      Garth will be aggressive this summer. Not passive, as I cited last summer once they missed on UFA targets and happy to just sit back with what they had. Backfired.

      So willing to take the heat.

      • justin says:

        The INTENTION is to be aggressive in free agency I am sure. However, there is one very important piece missing in your analysis. The INABILITY for the Islanders to ever make good during free agency. My prediction is that again the come up a dollar short or day late on their key “targets” only to end up having to make a “Brian Rolston” like maneuver in order to be near the floor. Then the excuses will start rolling in as per the “Charles Wang and Garth Snow Hockey Management and Perception Management” playbook.

  3. B_olton says:

    You Say: “Based on Botta’s cited numbers: the Isles only lost $4.8 million last year. Ok, take that and assume it is the loss next year…. And then add the GUARANTEED $50-52 million per year they get from Barclays. Nifty profit. Not the kind of amount that Charles is in a rush to wash his hands of so fast. You look at the profit margin and perhaps you can see why the price keeps going up once you sort through the murk here.”

    That memo showed $84 million total revenue w/ only $22 million coming from tix…another $15 million from NHL revenue sharing…and the $20+ million cable deal…where’d the other $25+ million in $$$$ come from? Merchandise, Concessions & parking?

    I’m assuming that they lose the NHL revenue sharing when they move to Brooklyn since in a major metro market. So Isles make $84 million in a no-playoff season at NVMC. Do they get a piece of all tickets at Barclays? If not, they will only make $72 million in BK w/o playoffs with the cable deal and Barclays guarantee. PLus merchandise sales., etc.

  4. Jethro09 says:

    With all due respect, Charles Wang is NOT an important fixture and partner to the hockey ops department of this organization. CW is more of a burden than a help. The guy knew absolutely nothing about the game when he first bought the team. He didn’t grow up a fan of the game. I can’t imagine that he has anything of value other than money (that he won’t spend) to contribute to Hockey ops. He is viewed as a joke around the game. He can’t sell his organization to top tier talent. He can’t possibly contribute anything from a talent evaluation standpoint.

    As I posted in your last piece, wang can’t spend money unless he can sell his team to free agents. Wang and Snow haven’t shown an ability to sell “their vision” to anyone worth selling it to. It’s why new ownership and management is necessary and the sooner it happens, the better.

    I don’t believe Wang will spend this summer because nobody will buy his line and take his money. Wang and Snow will fail to bring in top tier talent again and again will spin it as not wanting to take roster spots from the kids or some other lame excuse when they fail.

    A fish rots from the head. Wang is more of a hinderance to success than an ingredient for it.

  5. Jack says:

    B.D.

    I find your material interesting, though not always accurate (just like the rest of us).

    One factor in potential sale: Multiple media reports say Charles has a loan payment of $75 million (or $80 million; I’ve seen both) due this summer. This might speed things along, since I can’t picture him wanting to shell out that money. I believe (but can’t remember where I saw it) that the amount of time he has available to depreciate the team is coming to an end). Charles hates to spend money (he is even more frugal with his off-ice expenditures than his budget for on-ice talent — you can bet Snow and Cappy are the lowest-paid GM and coach in the NHL.

    One factor in attracting potential FAs: Aside from base of young talent, salary cap will not be as high as projected (CapGeek has touted $71.1M; Bettman said last week he expects $69M-$70M). The lower the cap, the better the environment for the Isles.

    Snow missed the boat last summer by not improving his goaltending; league-average work in goal might well have gotten the Isles into the postseaso; they were about .020 under the NHL average. The heat is on Charles to spend and Garth to do it smartly; the Isles won’t sell tickets in Brooklyn with the team they put out in ’13-14, even with the guaranteed money under the Barclays deal.

  6. FML Isles says:

    Assumption 1 – you cite Botta multiple times in that section, yet you leave out the most telling information Botta reported recently: 1) Wang is seeking someone to purchase 75% of the team, with a 5th year option to assume the remaining 25%; and 2) Botta believes this means Wang wants to find a buyer and sell ASAP.