According to a report from Mike Ozanian from Forbes Magazine, Arizona Coyotes owner Andrew Barroway has put 49% of his team’s ownership up for sale:
Arizona Coyotes owner believes his NHL franchise is worth $500M and reportedly is looking to sell a 49% stake.
Barrow is seeking a $500 million evaluation, meaning that whomever purchases the minority ownership stake will be looking at a cool $240 million price tag. Barrow purchased a majority stake team from the NHL, who were shepherding it through bankruptcy, and became sole owner of the struggling franchise in 2017.
Read below for more from Ozanian on this development:
The fact that Barroway is now seeking cash for his team is not surprising. When he bought out his partners I wrote: “Barroway’s buyout of his partners is the riskiest deal I can recall in recent memory. ... Barroway and the Coyotes are now leveraged to the hilt. As of now, the Coyotes have $250 million of debt. There is $100 million of NHL credit facility debt and two loans from MGG Investment Group; one for $100 million with about a 10% interest rate and a payment-in-kind loan for $50 million that would be redeemed in six years for $100 million.”
The league will be very reluctant to announce any sale price for under $500 million given that was the price for the Vegas Golden Knights, the last expansion team. Moreover, the league is talking $650 million for an expansion team in Seattle. But the economics of Vegas are vastly different than Arizona. The Knights had a great draft, a great arena deal and draw well, not to mention they almost won the Stanley Cup in their inaugural season. Arizona has been dealing with arena issues for years and was second from last in attendance during the 2017-2018 season.
One source believes the deal as being presented would give the new investor a path towards control, if not immediate control. The team has consistently lost money. By our count, the Coyotes have posted aggregate operating losses (in the sense of earnings before interest, taxes, depreciation and amortization) of $45 million for the last five seasons through 2016-2017.
For the full article from Ozanian, click the link below: