NHL ownership follies continue with Charles Wang being sued for backing out of a deal to sell the New York Islanders, and the Florida Panthers starting to look for a way out of their financial sinkhole.
Where's Chuck Barris when you need him?
The legendary host of The Gong Show would have relished the latest absurdity on Long Island: a lawsuit that claims Charles Wang reneged on an agreement to sell the New York Islanders for $420 million back in March.
That's a crazy chunk of change for a club that was valued at less than half that by Forbes early last season, but it wasn't enough to sway the indecisive Wang. His reason for backing out of the deal? The lawsuit claims that Wang suffered a bout of "seller's remorse" after seeing the NBA's Los Angeles Clippers go for a staggering $2 billion under distress conditions, so he decided to renegotiate a heftier return and asked Andrew Barroway, a deep-pocketed hedge fund wizard from Philadelphia, to meet his new price of $548 million.
Not surprisingly, Barroway preferred the original price tag from the handshake agreement he'd made with Wang on March 10 and was reluctant to accept the new terms. So when Wang informed him that he'd decided to sell the Islanders to other bidders on August 1, Barroway opted to sue for $10 million—an amount that was apparently specified as damages/recouped expenses in the original agreement in the event of it falling apart.
It's another embarrassing moment for an organization that seems to feed on shame the way Stephen King's Pennywise the clown fed on fear, and a blow to Islanders fans who've been lighting candles and praying for an end to Wang's dynasty of error.
GALLERY: Islanders follies
There's no way of knowing what happens next, but don't bet on another sale announcement any time soon. You have to think that if Wang actually had a buyer on the line who is willing to pay more than half a billion dollars for the club, he would have quietly and very happily sent Barroway a check for $10 million—to be covered by the more lucrative sale proceeds—and written it off as the cost of doing big business. By letting their tiff get to this point, Wang has served notice that anyone who is interested in negotiating the purchase of the Isles had better bring a big bottle of aspirin and a battery of lawyers to the proceedings.
NHL Deputy Commissioner Bill Daly has said that the lawsuit is "a private dispute", so the boys will just have at it.
Meanwhile, it hasn't taken the new owners in Florida long to start “quietly” greasing the skids for an exit from the financial sinkhole that is Broward County. Doug Cifu, who bought the troubled club with Vinnie Viola last year, told FoxSports Florida on Saturday that the team's ”current business model is unsustainable.”
This conclusion probably didn't catch anyone who follows the team by surprise, least of all Cifu who, as a successful hedge fund guy, most likely did his due diligence on the club before he put his money into the pot. Then again, blind faith may be the only way to explain why someone would invest in that market, so who really knows?
That's not a knock on the team itself. The on-ice product is promising, with what looks to be the best collection of talent the franchise has iced in at least a decade. The Panthers might not be a playoff club, but with Roberto Luongo between the pipes and an influx of veteran free agents to support young stars Jonathan Huberdeau and Sasha Barkov up front, they should be in the mix in the wide-open Eastern Conference. And if it doesn't happen for them this year, there's an abundance of potential in their pipeline, led by 2014 top pick Aaron Ekblad, young Boston College defenders Mike Matheson and Ian McCoshen, and dynamic forward Rocco Grimaldi.
But when you hear how Cifu and Viola hope to nurse their business back to health, you wonder if those kids will ever get the chance to take their talents to South Beach (or at least the general vicinity). The team already collects a check from the county equal to 16 percent of the hotel tax it levies on tourists, but with a massive $250 million arena debt to service and losses mounting to the tune of $100,000 per day, ownership is looking to double that amount.
There's no harm in asking, of course, especially since local governments, such as the one in Phoenix, have a history of throwing good money after bad to avoid the ugly visual of 40-plus dark nights at the local white elephant. But the request isn't sitting well with officials in Broward County who rightly recognize that there are other draws in the region—mostly those involving sand and saltwater—that fill the majority of those hotel rooms and deserve most of the proceeds of the levies.
They may decide to pony up in the end, but there's a good chance they won't. The county hired a consultant last month to examine the financial impact of releasing the franchise from the lease that binds it to the BB&T Center through 2028. The results of that study are due in October, setting the Panthers up for a possible lame duck season in 2014-15.
There's no telling if that's exactly where Cifu and Viola were steering this ship all along, but it's a good bet they'll sail away winners no matter how it plays out. Either the county antes up and they move forward on more secure footing or they'll be given their chance to explore greener pastures elsewhere.
Maybe the Panthers weren't such a bad buy after all.