On October 2, 2014 Larry Brooks, a reporter for the New York Post, reported that a 51% interest in the Coyotes is in the process of being acquired by Andrew Barroway. Barroway is managing partner and founder of Merion Investment Management LP based in Radnor, PA. He is a failed suitor in the purchase of the Devils and Islanders. At this point the story is speculation as neither the NHL nor the Coyotes’ owners have confirmed the deal. Here is the link: http://nypost.com/2014/10/02/spurned-islanders-buyer-to-purchase-coyotes-instead/. As an exercise, let’s speculate some more.
Why is Barroway acquiring a majority interest in the team? He wants to own a hockey team. That is evident in his two failed attempts. But he wants more than that. He wants to be in control and to make the ultimate and final decisions about the team’s fate at a future date. The team cannot and will not leave for 5 years. We can enjoy hockey in the Valley through the 2018-2019 season. After that you will need to consult your crystal ball. Although I would expect that when the fans finally realize the team’s days may be numbered attendance will drop like a stone.
According to the agreement the team cannot leave for 5 hockey seasons and must demonstrate $50 million in operating losses. Here is the exact language in the management agreement: Section 3. Term. 3.3. Early Termination by Arena Manager/Team Owner. “Notwithstanding the other terms and provisions of this Agreement, Team Owner and Arena Manager jointly shall have the right to terminate this agreement without penalty or cost by delivery of written notice to the City at any time within 180 days following the end of the fifth (5th) hockey season year after the execution date if (a) neither terminating Party is in material default of any term or condition of this Agreement, and (b)Team Owner has incurred a cumulative Operating Loss of $50,000,000 or more, calculated as the sum of Team Owner’s operating income/loss for each the Fiscal Year periods then ended, provided that if such notice is given during any NHL hockey season, the termination shall not be effective until the end of the applicable hockey season, including all Home Games associated with the season. In this regard, Team Owner shall deliver to the City, not later than ninety (90) days following the end of each Fiscal Year, a statement (certified to the City by the Team Owner’s chief financial officer or the Team Owner’s certified public accountants, at the option of Team Owner) of the Team Owner’s claimed operating income or loss for such Fiscal Year, which statement shall be subject to audit by the City and the result f such audit shall thereafter be conclusive upon team Owner with respect to the determination of Operating Losses.” This exact same provision applies to the city as well.
The New York Post story cites the team loss in its first year of operation at $24 million. Educated rumors are that it’s on the low side and could be more. As long as we’re speculating, let’s peg their losses at $20 million a year. At the end of 5 years the team’s losses will be north of $100 million and will meet the terms of the agreement. Barroway’s investment in the team now will cover those expected losses and he will be in the cat bird’s seat to decide the team’s future move.
Let’s wait to see if a majority interest is indeed sold to Barroway. That will deliver a strong message to everyone and you can then decide how much of an emotional investment you wish to make in the team. And just when we thought the Coyotes saga was closed…so it continues.
© Joyce Clark, 2014
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I love that every media outlet is jumping on this one story. Is news in the Valley that slow? KTAR was reporting this earlier today, but didn’t identify where the story came from, so it makes it seems as if it is their news. As you say, it is only speculation. I want to see more evidence than one story to believe it is true. How many times has Jackie Chan been reported to have died?
Until the NHL or IceArizona confirms it’s speculation.
I dare say the fact that Bettman nor Daly have jumped on denying this as fast as they usually do speaks volumes.
“The New York Post story cites the team loss in its first year of operation at $24 million. Educated rumors are that it’s on the low side and could be more. As long as we’re speculating”
“Educated rumors” ? please Joyce please be specific. Imagined or invented rumors? Since you are making the claim, of more that $24 million then this on your sources.
Reliable sources say more than $24 million in Post article.
“Reliable sources”…. That’s a very subjective term.
Someone has already alluded on another internet site that Forbes placed the losses at $24 million…… in 2011. And Forbes is not considered a real reliable source itself at times. Butt it’s not too difficult for some hack reporter looking to score an edge and stretch the facts a wee bit.
I think we’ve all seen today’s reporting in the media has turned into “let’s shoot what we think is fact out there and we can always change it later…. buried in a dead section.”
I am beginning to come to the conclusion that nothing positive can happen to this great team.
Now, this leadership group has allowed news such as this to leak out from source that is nothing but a rag whose headlines generally include Martians and Elvis sightings.
This entire sad saga has come to a crescendo of hilarious lunacy with this episode.
The news can’t be good or the leadership would have announced it from the rafters of Gila River Arena. They would have been proud to do so.
If these guys plan to leave…. Leave now.
People in the twitter verse are spinning this like it’s just another IV bag of chemo keeping the cancer cadaver alive.
I paid 15000 dollars for a two year ST and a Lot G parking pass.
I’ve had years of leadership positions responsible for very important things.
I would have been horrified as a leader to let something like this leak out the way it did.
Maybe these rookie businessmen are just raw.. It doesn’t matter.
I will still attend the games that I have paid for but will no longer wear the Coyote gear. (About all I got) I wore it everywhere and advertised and encouraged folks to attend the games. That’s how much I liked them.
Behind my back they were up to this
That’s ok it’s business
But I’m through
I’ll put the stuff back on if I think the team is on our side… Next year or the year after .if they are just biding their time…Leave now, don’t prolong the suffering.
General,
We do not yet know if this is good news or bad news. There is a lot of speculation that the debt from Fortress Investments is weighing heavily on Ice Arizona. Barroway could help alleviate this debt burden. My guess as to why the owners haven’t said anything about Barroway is because they are still in talks. Why would they announce something that might not pan out? Keep wearing your Coyotes gear proudly, not for the ownership, but for the gentleman on the ice.
You do remember Mr. Barroway was involved in a dispute with a former NHL owner? Doesn’t take much vision to believe other “interests” would not like him apart of any team. As far as Ice Arizona, if they wanted to sell interests and let go, and take the money and “run” they have had many chances to do so, and declined.
I do not have all the details…. but Barroway sued Charles Wang, the owner of the New Jersey Devils because they had a handshake agreement that would have allowed Barroway to purchase a large portion of the Devils. However Wang later reneged on the agreement and went another direction.
Barroway is an attorney and once successfully sued the government of Mexico for $2 billion (with a B). So a $10 million suit against Wang was more of recovering his costs in putting together his offer than anything.
If I recall, D. Jackson of the Glendle Star was referring to a loss of at least 18M for last year in a Le Soliel article he was interviewed for.
The reason why this guy buying he tired many and failed.#2 he wanted buy for cash not a bank loans like ice az.The nhl stepped in before was big problem.The ownership group split do in fighting.This guy is a bil 10 times over has money spend.Ice az was going spend cap like told Doan they lied to him.They did a lot work off season to arena but nothing players.Players are what bring fans you have spend money and take risk to win.The reason for Ice az staying is simple why get battle with Glendale another lease which now that been there how many times.This what George has doing been 15 year buying things that trouble and selling not return 1 year.This best that team and fans all off season.Many talked fri talk shows why not offer below offer for arena.because glendale does be arena and baseball parks.So they have has to spend and that that your nhl team takes he has it..This done they 3 nhl soures one Flyers owner he one runs nhl not bettem..Ice az over will own % of team may be little do lease smart.