Wednesday, July 18, 2007

Edmonton Oilers For Sale?

A local Edmonton billionare is trying to purchase the Edmonton Oilers, according to both TSN and The Edmonton Journal. Daryl Katz tried to purchase the team several months ago but the Edmonton Investors Group did not vote on the offer because the Board did not consider the team up for sale.

The ownership structure in Edmonton is quite different than in many other NHL cities. The Edmonton Investors Group has about 7700 voting shares distributed unevenly among around 30-35 investors. A small board of directors runs the day to day operations of the group. Since forming there have been some natural conflicts and politics and I suspect Katz is succeeding in dividing the shareholders into factions.

According to the Journal, the share holders will vote on the offer in August. A two thirds majority would be required for the sale to be approved. But, I would be cautious about believing anything you read about the Oilers in the Journal.

This is the third time that Katz has made an offer. The previous offers were in the $155m dollar range. The current offer is $175m, along with a hint that he might build a new arena. The Oilers facility is in rapid decline and like the Saddledome will need to be replaced sooner than later. I think the offer is well over the market value, but whats 25m give or take. I wonder why Katz is so desperate to own the team.

The offer was made directly to the share holders rather than to the Board of directors because the Board is not interested in selling. It is clearly an attempt to leverage the dissatisfaction of some of the share holders with regards to the way the team is being run.

I'm not really clear if this strategy will work or not, and it is anyone's guess whether the shareholders will vote to sell. It is possible the Board of Directors has some kind of strategy that could prevent the sale. Perhaps a corporate version of the neutral zone trap.

I'm just guessing, but I think most Oiler fans would prefer group ownership rather than one billionare owner. The memories of Peter Pocklington very nearly killing or relocating the Oilers is still fresh in everyone's mind.

Maybe if they sell they can bring in a fresh management team into the front office, but don't get me started on that topic. This controversy is the last thing the Oilers need heading into the next season with a questionable team and a fragile morale.

In unrelated Oilers news, family members and at least one complete stranger are recommending that I toss out my Oilers shirt, pictured below:

I refuse. Some clothing is sacred regardless of having holes or tears. My Mother suggests that she did'nt bring me up to wear stuff like that. I didn't have a comeback so I told her my sister was checking into rehab. Please recommend this post

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