On Tuesday August 19th, Charles Wang, the majority owner of the NHL’s New York Islanders, agreed to sell the team to Jonathan Ledecky, a former owner of the Washington Capitals and London-based investor Scott Malkin.
According to the Islanders’ announcement, Ledecky and Malkin purchased a substantial minority stake in the team with plans to transition to majority owners in two years. That means Wang will remain the majority owner until then. Wang will continue as majority shareholder and governor of the Islanders for those two years before assuming a role as minority owner. All of the details of the agreement are pending league approval by the Board of Governors.
“We are pleased to have the opportunity to become partners in the New York Islanders with Charles, and to pursue our shared dream of winning a fifth Stanley Cup for the greatest fans in the NHL,” Ledecky said in a statement.
Ledecky held a 24 percent minority stake in the Capitals before selling it back to majority owner and Ted Leonsis in 2001, who remains the team’s owner. The selling of the Capitals gave Ledecky the opportunity to purchase a NHL team of his own, which has been a long-term goal of his. Pending the NHL’s Board of Governor’s approval, he may be achieving that dream very soon with the Islanders.
“I’m thrilled that Jon and Scott have agreed to join me as we start the Islanders’ final year at Nassau Veterans Memorial Coliseum,” said Wang. “I look forward to a long and successful partnership.”
Wang, who loses approximately $10 million annually with the franchise, has been shopping the team since February 2014 and appeared close to selling the team earlier this summer. On August 11th, Wang was slapped with a $10 million lawsuit from Philadelphia-based hedge fund manager Andrew Barroway and his company, NY ICE, for allegedly backing out of an agreement to buy the Islander for $420 million.
According to the suit, Wang and Barroway shook hands on March 10 and for the next few months their top aides worked on financial specifics. Then, according to the papers, Wang had an “about-face” and “seller’s remorse” about the sale after learning about Steve Ballmer’s $2 billion bid for the NBA’s Los Angeles Clippers and “blind-sided” Barroway by demanding $548 million. The suit also alleges that Wang informed Barroway on August 1st that he had decided to sell the team to other bidders. It appears we now know who the other bidders are.
Forbes values the Islanders at $195 million, but if the reported Barroway offer of $420 million is true, it would appear that Wang stands to make a substantial financial gain by selling the club, if Ledecky and Malkin’s agreement is higher than Barroway’s offer.
Wang, who became a part-owner of the team in 2000, gained majority control of the Islanders in 2004. The team’s constant on-ice seasonal struggles and Wang’s own inability to keep the franchise in Long Island, with his failed Lighthouse Project, has caused frustration and disappointment among the Islanders fan base. Wang has often been criticized for being too indecisive in his ability to make changes and decisions fast enough, and for his blind loyalty to his staff despite mediocre outcomes.
Wang did succeed in keeping the Islanders in New York. The team will start its final season at Uniondale’s Nassau Coliseum, commonly viewed as one of the worst arenas in the league, in October, before relocating to Brooklyn’s Barclays Center before the start of the 2015-16 season.
New ownership, along with the move to Brooklyn, will certainly bring more excitement and confidence for the Islanders and its long time die-hard fans. The Islanders have finished outside of the playoffs in seven of the last nine seasons. The team did however make significant changes and additions over the offseason. They upgraded in the net, Evgeni Nabokov is out and Jaroslav Halak is now the Islanders starting goalie. The team also successfully added Mikhail Grabovski and Nikolai Kulemin, two highly skilled forwards to its roster.
With the drastic improvements and adjustments that were made during the offseason, the Islanders are positive that they will be a playoff team in the 2014-2015 NHL season, which could allow Wang to leave the franchise on a slightly higher note.