Wednesday, February 06, 2008

Oilers Sold

The Edmonton Investors Group has announced they are selling the Edmonton Oilers to Daryl Katz for $200 million. The entire investors group is unanimous in their agreement to sell. The investors group bought the Oilers in 1998, preventing their move from the city. Since then, the Canadian dollar has significantly risen, the population of Edmonton has risen and the viability of new American markets has been put into question by the lockout and the lack of NHL games on major network and cable channels. This has led to a significant resurgence in the Oilers profitability.

Daryl Katz owns the Rexall chain of pharmacies that own the naming rights for Edmonton's stadium (Rexall Place). He could be an improvement over the large group of investors who previously own the team because he will be able to act quickly when necessary and won't have to build consensus among many owners with differing interests and opinions.

While, in general, it is hard to buy and sell NHL teams, this deal is looked at as a likely one to pass. Katz is a relatively known quantity who clearly has a high net worth (claimed to be as high as $2.37 billion). He has been a suitor for the Oilers for a while, having made several offers of increasing dollar amounts over the past ten months or so. He is not a partnership, so there is no danger of his partnership falling apart (as happened in Tampa Bay).

Katz might allow the Oilers a chance to rebuild the franchise. He will have to find a good hockey man to lead the team and get out of his way. I don't think Kevin Lowe is that man, though he has a contract through 2011). Katz may have to fire him and eat the remaining portion of his contract to get a better hockey man in place.

Here is TSN's story on the pending sale.

NOTE: Katz has announced that he is willing to put up $100 million towards the construction of a new arena in Edmonton. This is only part of the total costs, with local taxpayers expected to pay the rest of the bill. This is something Andy Grabia at Battle of Alberta has been campaigning against.

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