Just one year after they were rescued from the league, the Arizona Coyotes – or at least a majority chunk of them are reportedly in the midst of being sold. What exactly is the end game here? Would anyone want the Coyotes without a payoff?
So let’s say you’re in the market to buy a new car. You walk into a dealership and talk to the sales guy, take one for a spin and agree on the price. You seal the deal with a handshake. When you come in a few days later to complete the paper work, the salesman tells you that not only has the price of the car has gone up dramatically, it’s being sold to someone else. You sue the sales guy for breach of contract.
Would you then be inclined to walk into the same dealership less than two months later to begin the process of buying a car from another salesman there?
Well, that’s in effect what Andrew Barroway is apparently doing. Reports have surfaced that Barroway, who apparently has a penchant for money-losing teams since he tried to buy the New Jersey Devils two years ago, is in negotiations to buy 51 percent of the money-losing Arizona Coyotes. What makes it strange is that less than two months ago, Barroway sued New York Islanders owner Charles Wang for $10 million after he alleges Wang reneged on a deal to sell him the team before selling it to Jonathan Ledecky and Scott Malkin.
According to Barroway’s lawsuit, he had a verbal agreement with Wang to buy the Islanders for $420 million and while the financing details were being worked out, “Wang informed Barroway and his advisor that the NHL wanted him to meet with other potential investment groups, but Wang stated that he would only speak with other groups as a courtesy to the NHL and that he fully intended to honor his commitment to sell the team to (Barroway).” In late July, according to the lawsuit, Wang then informed Barroway that the price of the team had risen to $548 million, then finalized the sale to Ledecky and Malkin shortly after that.
The New York Post reported Thursday that as part of his deal to buy the Coyotes, Barroway would drop his lawsuit against Wang, but NHL deputy commissioner Bill Daly said in an email from thn.com, “as far as I know, it is still pending.”
So to recap, Barroway tried to buy the Devils a couple of years ago and was unsuccessful. Then he thought he had a deal to buy the Islanders, but claims the rug was pulled out from under him. And less than two months after that, he enters negotiations not just to buy any NHL team, but the biggest money pit among the 30 teams in the league?
Somebody must really like hockey. It’s one thing to want to buy a team, it’s quite another to be a hedge-fund billionaire and suddenly want to pour good money after bad into a franchise that has done nothing but hemorrhage red ink for more than a decade. Or is there more at work here, such as perhaps the possibility of moving the Coyotes to a more lucrative market? One person with knowledge of such matters says the Coyotes have already lost $35 million under their new owners George Gosbee and Anthony LeBlanc. It’s believed that if the team loses $50 million in its first three seasons, it can be moved if the owners pay the City of Glendale to be released from its lease. The source said the Coyotes will easily hit the $50 million mark this season, only the second under the new ownership.
The red flag here is that after only a year, the Coyotes are looking for investors and are willing to sell a majority stake in the team. No matter how the Coyotes paint this and exciting and all about keeping the Coyotes in the desert, this cannot be seen as good news. If things were going so well, why would the owners be willing to sell 51 percent of the team just one year after taking over? Could it be that Barroway is being brought in to help stem the losses until a better arrangement can be made?
Then there’s the underlying notion that Las Vegas is waiting for the league’s next troubled franchise. Some have speculated that Las Vegas is a slam-dunk for a team, another source saying there’s no doubt the Coyotes will be moving there in two years.
Nobody is saying anything on the record about Barroway or the Coyotes, but when you look at the circumstances, it all kind of fits together, doesn’t it?