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BCE’s new owners may have had a tough time finishing the financing details of their takeover of the phone giant, but lenders are still willing to put in a few bucks for properties they do like. Daryl Katz certainly found that out in July when financing giant CIT Group Inc. gave the drug store chain owner a $100-million loan to complete his $200-million purchase of the Edmonton Oilers.
Of course, Katz could have financed the deal entirely by himself, which means he’s a pretty good credit risk. Canadian Business calculates his net worth at $2.37 billion, making him the 15th-richest person in Canada (he’s also the 573rd-richest person in the world). “The debt markets have been a little finicky,” Gordon Saint-Denis, managing director of media, entertainment and sports for CIT, told the Wall Street Journal. “But this is a deal for a hockey team in Canada, where hockey is king, and Edmonton has been doing very well from an economic standpoint.”
There’s no doubt Katz coveted the Oilers. In 2003 his company, the Katz Group, grabbed the naming rights to Edmonton’s hockey arena, renaming it Rexall Place after one of his chains. And he had made three previous bids to buy the Oilers, starting in May 2007 with a bid of US$145 million. He upped that to US$185 million two months later, then US$188 million in December, before finally convincing the Edmonton Investors Group to accept an even US$200 million last February.
That sum is well above the US$146-million value Forbes placed on the Oilers earlier this year, which made it the 19th most valuable team in a league of 30. It’s also a healthy gain for the team’s former owner, which paid US$70 million for the Oilers in 1998. But then, hockey is hot these days, at least at the ownership level and in the scandal pages.
But as Katz settles in as the NHL’s newest owner, he would be wise to remember the immortal words of Groucho Marx who said, “I don’t care to belong to a club that accepts people like me as members.” The NHL is filled with scoundrels, cheats and liars, all led by a pint-sized czar, a former lawyer no less. Some NHL owners seem to live by another of Marx’s rules: The secret of life is honesty and fair dealing. If you can fake that, you've got it made.
There’s Henry Samueli, the billionaire owner of the Anaheim Ducks, who in late June pleaded guilty to lying to the U.S. Securities and Exchange Commission during its probe of stock-option backdating at Broadcom Corp., the chipmaker he co-founded. Samueli’s plea is part of a larger federal criminal probe into Broadcom, which had to write off US$2.2 billion in ill-gotten profits last year.
Earlier that month, Nashville Predators minority owner William (Boots) Del Biaggio III filed for bankruptcy in California, owing more than US$67 million to his top 20 creditors and an investment fund. Boots was part of a group of Nashville businessman that purchased the team last year from Craig Leipold.
The Predators, of course, are one of the two NHL teams Research In Motion co-CEO Jim Balsillie has recently tried to buy, but his attempts proved fruitless amidst rumours the NHL fraternity believes he’s not the right kind of owner they’re looking for. They must have forgotten that regulators also pursued Balsillie’s company for backdating stock options. That’s the kind of stuff that makes him perfect NHL ownership material.
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