Wednesday, January 23, 2008

Big surprise: a rival bid for the Oilers

As everyone already guessed, Bill Butler and his ragtag band of investors (lead by Gary Gregg) are preparing a separate bid to buy the team, according to Dan Barnes in the Journal. Both Butler and Gregg are board members, which would make you think that there would be a conflict-of-interest in recommending competing bids to shareholders, but I guess no one really cares.

A short review why I don't like Bill Butler, all within a span of two months: 1) he's held two press conferences to say absolutely nothing 2) he's pretended to not be aware of an alternative bid when it was obvious to everyone else that he was 3) he insults the intelligence of Edmontonians by offering the same kind of Pat LaForge-minted "we want what's best for the city" drivel instead of real, straight answers, and most importantly 4) a team run by his rabble will almost definitely look for public dollars for a new arena (capital-wise, they'd be dumb not to) . Meanwhile, Darryl Katz has at least offered $100 million of his own money, which is already more of a plan and commitment than what EIG has put on the table.

The only good news from the story is that Darryl Katz may or may not already have enough shares to control the team. Fingers crossed...


LittleFury said...

"The purchase of those shares could be financed by shareholders such as Gregg, Brian Nilsson and Jakob Ambrosius, who do not wish to sell to Katz, through the recruitment of new investors, provided they meet NHL approval, or via a massive bank loan using the Oilers as collateral."

This plan cannot possiblie go wrong.

Lord Bob said...

Unfortunately, I fear that the two-thirds of the investors willing to sell out to Katz are just as willing to sell out to Butler even if he's financing his bid by mortgaging the Oilers and chainsawing kittens to death.

Also, is it just me, or does that picture of Butler make him look like one of those shady doctors being convicted of killing ninety-three patients and writing himself into their wills?

Marchantfan said...

I guess Peter Pocklington's M.O. is alive an well in Edmonton. What a bunch of dinks.

Anonymous said...

Is there anyone (beside, perhaps, Mrs. Butler) that doesn't think Butler is a total douche bag?

If this counter deal goes through then it's going to be curtains for the new arena.

Anonymous said...

The story brings the phrase
Into my mind for probably the 1st time ever...

In a great world, we could hope that if they foolishly try to pull this off, everyone walks away and leaves them with a struggling team that nobody goes to see...Then they'd be forced to pawn it off to Katz at a cheaper price.

I will stop typing now so I can recross my fingers.


Colm in Belfast said...

Great. My teams on both sides of the Atlantic could be in debt up to their eyeballs. Superb.

Colm in Belfast said...

Ok, that didn't work but if you go to and click on the story titled 'Prospectors for gold leave Liverpool in a mountain of debt', you'll get a look into a potential Butler/Gregg future. But at least they're the "a group of the all-time greatest guys in Edmonton history". BTW, I know better than to take anything in the Edmonton Sun seriously, but why do they seem so hell-bent on smearing Katz?

heed said...

these are your houston oilers. give it a rest butler the jig is up.

Alex said...

The first poster has it totally dead on. I sure hope if Butler gets the team, he can pay the bills on time. Using the Oilers as collateral is such a red flag that no one in their right minds should want to sell this guy the team. What if there's another lockout with him as owner and he's got a massive bank loan?

I think, at the end of the day, most shareholders who want to sell will be more willing to sell to Katz, but knock on wood.

McLea said...

What if there's another lockout with him as owner and he's got a massive bank loan?

He'll pay off his loans through the bonded labour of Raffi Torres?

And to be honest guys, I'm not sure why you're so scared of a potential owner loading up on debt to purchase the team. The Oilers are a team with large, predictable cash flows, which makes them a good candidate for a highly leveraged purchase. One of the benefits of the new CBA is that the cash flows for the teams became a lot less risky, which means you could gear up the team with debt financing with little additional risk of default.

I'd even go as far as to say that you should be happy that your new overloads can pile on more debt, because it would allow them to earn a higher return on their equity stake which, in turn, would theoretically diminish their motivation to raid the public coffers to finance a new arena.

McLea said...

Actually, forget that last point. Getting tax payers to pay for your shit will always be attractive, regardless of how much money you're making.

Pleasure Motors said...

I bet someone who's tens of millions of dollars in debt will be just aching to spend to the cap every year, too.

Anonymous said...

I've got news for all the people who think Butler is the devil because he's talking about debt and leverage: Katz is going to do the same thing.

It is extremely unlikely that Katz is going to put up $180M of his own cash to buy all the outstanding shares. Even a guy with $2B in wealth does not have that kind of cash lying around. Most likely, he is going to go to a bank or other lender; borrow much, if not most, of the purchase amount; and secure the loan against the shares he wants to purchase.

This is the beauty of leverage - using other people's money to help buy something when you can't (or don't want to) put up the full price out of your own assets.

There is nothing evil about this. Anyone who takes out a mortgage on their home does effectively the same thing as what Butler is musing about and what Katz is no doubt planning.

I also have news for those who think Katz is going to shitcan Lowe as soon as he takes over. For one thing, Katz and Lowe are friends and involved in charity events together. For another, Katz is a big picture guy. He's unlikely to care about trades and contracts and the starting line-up. So long as the Oilers keep generating enough cash, he'll be happy enough to leave the details of hockey management to the current regime.

heed said...

i don't think katz is going to change anything. what blows me away is someone saying he's going to match the offer and then go out scrambling to find the financing. what has he been up to for the past month?

mike w said...

Well for one, Butler isn't talking about anything, which is part of the problem. That said, I'll take an owner with deep pockets over a bunch of owners that will struggle to simply pay off the other shareholders any day.

And who said anything about Katz firing Lowe?

Anonymous said...

what scares me the most is that black turtleneck.

- Darth Butler

Alex said...

I've got news for all the people who think Butler is the devil because he's talking about debt and leverage: Katz is going to do the same thing.

He might do the same thing, but he'll do it in a much different way. Not all loans mean the same thing to the same people.

As far as I know, Katz plans on buying the Oilers under the moniker of "Rexall Sports." This means he is going to incorporate the Oilers as an asset into his huge pharmacy empire, which by the way is privately owned him (so he has no shareholders to appease). So if the Oilers were to lose money one season, it would go against the (huge) revenues Rexall makes each year. Any debt that he (or more accurately, Rexall) incurs in this purchase is ridiculously manageable and, being the billionaire Rexall owner he is, barely noticeable.

On the other hand, Bill Butler is your typical Alberta millionaire who's rich in a completely different sense. He's the kind of rich where if you went to elementary school with his kid, you might have been jealous of him because he lived in a big house in Riverbend. So that basically means any debt him and his partners incur will cause a lot of the Oilers' revenue to be put against it. They might spend a bit below the cap. There might be losses some season. Or, worst case scenario, Bill and co. can't meet their bill payments on time and all of a sudden fucking Scotia Bank owns the Oilers.

David S said...

Alex - Exactly!

Rexall Sports is a fully owned subsidiary of Wayne Enter...err...Rexall Inc.

BTW - Check out those mansions in Riverbend sometime. There's more than a few with Ikea furniture and shitbox cars in the driveway (I saw the same thing in Calgary). Anything goes sideways and those guys are SOL.

Finance yourself up ass because you and your wife are making way more money than you would in a real economy. Yeah, that's the kind of ownership I want to see.

Rock Deputy said...

I've got news for all the people who think Butler is the devil because he's talking about debt and leverage: Katz is going to do the same thing.

Katz + $100mil towards arena + training facility


Butler + ??? + ??? + Scotia Bank potentially owning the team at some point?

Even though it's not in writing, the Katz offer is obviously better.

Anonymous said...

Ladies and Gentlemen Bleep Tarnstrom.

He might not be here much longer so let's all enjoy calling him Bleep while we still can.

Fucking Fox. Too funny.

Anonymous said...

Sorry, the rest of that is ...Potential_NHL_Trade_Bait.

I guess that's what preview is for.

garnet said...

I know that this is, for reasons relating to mental health, more of a meta-Oilers blogs these days, rather than about the team as it now exists, but still: sharp comeback against Florida, no? Not that the tying goal wasn't a lucky break for the ages.

Anonymous said...

He looks crooked.

What else is there to say?

Katz looks like you can trust him.

Fucking Oilers. Just tank and get into that Tavares lottery ok?