Katz Vs. EIG

Cal Nichols held court today. The chairman of the board told us that the 33 owners voted down the latest Katz offer “resoundingly.” One suspects if the vote had truly been “resounding” we would have gotten the actual tally, or at the very least “almost unanimous” but let’s not quibble. The Oilers remain the EIG’s marvelous toy, much to the chagrin of an ever increasing (and vocal) group of Oiler fans.

That’s what I believe today was all about in the end. Cal Nichols and his gang felt that the locals were beginning to warm up to the druggist and his fancy sex words. There was music in the air, the possibility of something happening, and Cal ran in, turned on the lights and yelled “hand check!”

I have no idea if this is a ploy by the EIG to increase the price, or if Katz will wait for awhile and then make another attempt to buy the team. I can say that (like many Oiler fans) the thought of having a single owner rich enough to stomp the guts out of some of the other NHL owners and compete on a level playing field even if the economy goes sideways is an idea that appeals to me on all levels and I hope he tries again (maybe when the parents are at the lake).

A few other items from kindly Cal:

  • “This is not about dollars. This is about Edmonton. An ownership group is best-suited for Edmonton and the Oilers.” Does Cal even believe this? This is about the guys who own the team keeping the team, and today’s press conference came about because they’re a little huffy about some guy trying to steal the limelight. Damn people who don’t know their place, they’re a real nuisance.
  • “I hope that this, at least for the near term, puts an end to the offer thing because this has been a bit of a circus for four months.” Circus how? How is this a circus to you? Let me understand this cause, ya know maybe it’s me, I’m a little fucked up maybe, but it’s a circus how, it’s a circus like we’re here to amuse you?

By my count the Oilers are at about 95% of the 07-08 salary cap, and that issue came up today, along with the arena questions. I cannot at this time find direct quotes from Nichols so that will have to wait for another day.

Covered in Oil’s Chris has a terrific take up already.

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19 Responses to "Katz Vs. EIG"

  1. godot10 says:

    Several members of the EIG will have different feelings when they have to start writing cheques for a $500 million dollar arena.

  2. Whitewoody says:

    I’m choked that EIG wouldn’t accept it. I wish Katz put in an offer of 200 mill. THat might of swayed them. Katz himself said he wouldn’t make another offer unless they wanted him to.

    We need a power player. And i believe one owner to take the reigns. We would then always have the cap money a new arena and power.

    Also i would like to know how come i have to fill out a new name and password everytime i come on here.
    Eventhough i have one.

  3. Colby Cosh says:

    I think these days the dance chaperones actually shout “Condom check!”

  4. PunjabiOil says:

    Katz himself said he wouldn’t make another offer unless they wanted him to

    ____

    When did he say that?

  5. danny says:

    *sigh*

    Collateral damage? Does he mean fans finally realizing what the EIG are about?

    It was almost easier being an expos fan, when the ownership didnt even try to spin anything. Atleast I didnt feel like Elizabeth Shue during the shower scene in Leaving Las Vegas afterwards.

  6. Pat says:

    amen to this post, and to Danny’s above comment about the EIG spinning things. Cal was on Tencer’s show tonight, and reiterated the “it’s not money, it’s about philosophy” justification. What absolute B.S.

    He also made another interesting comment, though I’m not sure I interpreted it correctly. He was talking about retirement/buy-out provisions among the guys in the EIG, and he brought up the current buy-out value of the franchise, in the event that a guy wants out and the rest of the EIG steps up to buy his shares. The number he gave was 125 million. That seems a bit ludicrous, doesn’t it? Moreover, if the potential seller wants to sell his shares to someone outside of the EIG, it has to meet EIG approval first. So I get the feeling that there’s a couple of guys in the EIG that are stuck between a rock and a hard place. They probably want to bail out, but with the EIG voting down Katz’s offer, their only sure-fire out is to sell to the rest of the Egomaniacs Investors Group for a price that’s blatantly less than market value – or at least less than what Katz valued the team at. Brutal.

    But what bothers me most about this franchise is the lies, at every level. The EIG, Lowe, and Laforge are Edmonton’s version of Orwell’s Ministry of Truth.

  7. RiversQ says:

    I always thought that FIB image was actually smaller than that.

    Disappointing. As usual.

    Anyway, I love this part:

    “This is not about dollars. This is about Edmonton. An ownership group is best-suited for Edmonton and the Oilers.”

    I’m familiar with one particular EIG member via a family connection. He’s a nice enough guy, but I guarantee you he’s not that concerned about Edmonton. He’s been vocal lately and he sure hasn’t been talking like Bruce Saville, which I took to be true to form.

    These guys didn’t get where they are now by not worrying about #1, so this shit is pretty insulting.

  8. Asiaoil says:

    EIG are small-time players who got lucky and ended up in a big stakes game – doesn’t change the fact that they are are small-time and will continue to operate like it for the foreseeable future.

    People need to keep calling BS on this bunch – and I still want another $3 million player signed this summer or else these guys are just being nasty little small town tightwads – which they are – and which is why I don’t expect them to spend a dime more than they have to.

  9. namflashback says:

    Pat,

    You can be angry that they didn’t accept, but their retirement provision is not so unique in privately held corporations. It’s called a poison pill and if I were to create a mEIG today I would put the same thing in. If they are trying to increase Katz’s bid, I’m not sure why they didn’t just counter. For those that think that the EIG are all small fry, that’s just myopic. They have some access to capital if they need it. They could also pretty effectively lever against the value of the team now.

  10. choppystride says:

    Pat: So I get the feeling that there’s a couple of guys in the EIG that are stuck between a rock and a hard place. They probably want to bail out, but with the EIG voting down Katz’s offer, their only sure-fire out is to sell to the rest of the Egomaniacs Investors Group for a price that’s blatantly less than market value – or at least less than what Katz valued the team at. Brutal.

    Yeah, that’s the way I see it, too. The majority who are holding the hammer are squeezing the minority who want to sell – big time.

    Here’s another interesting tidbit:


    NICHOLS (in his prepared statement): The reported sale price was $185 million, but in fact, it is actually closer to $160 million after capital adjustments and adjustments for tax treatment that’s required to bring this down to the similar value of a share price.

    then later in the Q&A:


    REPORTER: Was it communicated to Mr Katz as to a number, a target number, that the EIG was initially looking for?

    NICHOLS: Initially, before all this started, and the collateral damage that went with it, that, when they got to 165 million dollars clean (the distribution) we would take it to our shareholders for a vote. We didn’t wait til it got there, we took it to them today because, we’ve just had too much being said in the public, too many numbers thrown around, and most of all, we want our shareholders to be informed, and intelligent with every issue, every part of the issue that we’re dealing with.

    So I guess that’s why not only did they vote to reject the current offer, but also on a “Not For Sale” resolution.

    Based on this, I don’t see why Katz would want to be a minority shareholder unless he’s a masochist who enjoys being on the wrong side of a gigantic bid/ask spread and have his exit terms be toyed with and dictated to.

  11. Pat says:

    namflashback said:You can be angry that they didn’t accept, but their retirement provision is not so unique in privately held corporations. It’s called a poison pill and if I were to create a mEIG today I would put the same thing in.

    Right, right. Thanks for the reminder on ‘poison pills’. I was familiar with the concept, but had forgotten it was common in business practice (obviously I’m not in business myself!).

    Nonetheless, I think one of the most annoying things here is a related point that nearly everybody is alluding to. De facto, the EIG appear to be running the company like any ‘normal’ business, which on the surface makes perfect sense. The problem, however, is that they’re portraying themselves more as noble heroes than businessmen – a fact evidenced by Cal’s clear indication that the EIG runs the team in accord with some sort of altruistic “do what’s best for Edmonton” philosophy (money is not the primary factor, according to Cal). Like Riversq said, that’s just plain insulting. To be fair, I do think that it’s justifiable to view them as heroes when they first came in – we do owe them that much. But given the different situation now, it’s flat out B.S. for them to continue espousing this noble image. If their “Edmonton first” philosophy were really in play, then the reigns would have been handed to Katz in a second.

    I’d still be annoyed if Cal had said “we’re just having too much success to consider a sale at this point”. But at least that sort of statement would have been honest.

  12. PunjabiOil says:

    MORE DRAMA

    ‘Clearly I’m disappointed that the ownership group has elected not to proceed with a sale but I accept their decision and wish them well,” said Katz in a statement. ”As an Oilers’ fan and the franchise’s largest corporate sponsor, I will continue to be a major supporter of the team.”

    Nichols said the offer to buy the Oilers was unsolicited but the Katz group disagrees, claiming he was told the EIG would be willing to listen to offers as long as they were $165 million or more.

  13. OilFan79 says:

    Where does all of this wildly enthusiastic support for Katz come from? I don’t know him personally, and I’m guessing that the vast majority of the other posters don’t either. Would he be a great owner or not? How could we know? Everyone seems to be assuming that having a single aggressive, extremely talented businessman who is willing to spend to the cap is going to translate to a stellar on-ice performance. To step outside of the NHL for a moment, please google the name Dan Snyder. Since buying the Redskins, he has been an extremely agressive owner, spending to the cap consistently to obtain the best free agent talent available. Anyone want to enlighten us as to how many playoff appearance that has translated into over the 8 seasons he’s owned the team? Back to hockey. Philly was the first to hit the salary cap, how much good did it do them? The EIG right now is willing to pay enough to make the team competitive. They have said that in the right circumstances they would be willing to reach the cap. So maybe if there was good reason to think we were a sniper away from a solid cup run, and one was available. Fine. But to make reaching the salary cap your stated goal? Then you end up in trouble like New Jersey a couple of years ago, wanting to make a move but too jammed up against the cap. The EIG saved the Oilers for Edmonton, and fans should be extremely grateful to them. The budget set this summer was plenty, money was not the issue in attracting free agents. Certainly wasn’t for Nylander… Much as it pains me to admit it, having grown up in Edmonton and then moved all over the place, I can see why a number of players might rather live in (for example) Montreal and accept $1 mil less than the Oilers offer. The Oilers franchise is in good shape, despite the frantic posts in the blogsphere. Definitely not primed for a cup run, and I don’t like some of Lowe’s recent moves, but this should not be a lottery team. I would also like to pick up a goal scoring forward for another $3 mil. Who? Anyway, if the EIG isn’t interested in selling that’s there business. For over a decade, they have provided stability, keeping the Oilers in Edmonton and pretty competitive for a small market team. Certainly more competitive than some big marked teams (i.e., the Rangers) have been. They certainly didn’t do it because they were greedy, owning the Edmonton Oilers has never been a great financial investment. If it’s now generating some money for them, it’s well deserved. If Katz ever did buy the team, best of luck, I hope he would turn out to be as good an owner as everyone seems to have decided he would be. But lay off the EIG.

  14. Lowetide says:

    oilfan 79: The EIG have been paid in full in terms of goodwill re:saving the team, and now what we’re talking about is whether or not this team is going to grab that “level playing field” that is available for the first time in at least 20 years.

    I find it troubling that in a ideal scenario (CDN dollar chugging, economy roaring, etc) the EIG put the breaks on at the outskirts of the cap, don’t you?

    And don’t give me the “we need to save 3 million for the deadline” crap, because YK Oil exposed that on his blog long ago.

    The Oilers sit at about 47.5M (or 95%) of the cap now assuming they hire $500k guys at the backend of the roster (say spots 21-23).

    They CAN go get one more player, but they aren’t going to (or if they do it’ll be a guy like Horcoff who makes some coin heading the other way).

    The Oilers STILL don’t have enough to really compete in their division, owing mostly to sending Pronger and Smyth away for futures.

    Lowe could add one more piece to the roster but it’s clear he won’t. It’s also clear that when they’re sucking wind in Feb Lowe will offload contracts and I suspect the final EDM cap number to be well south of $43M by the time all is said and done.

  15. danny says:

    A couple of thoughts on the emergence of ‘collateral damage’. My first interpretation was that the EIG didnt like being exposed as they were, but that wouldn’t really classify as collateral damage per se…

    I think Cal may be alluding to the potential public relations hit that the 33 individual businesses were subjected to by Katz making his offer public. So in part is is due to being exposed, but not being pleased that Katz has waged a PR war against 33 other business empires in doing so.

    SO you ask yourself why would Cal mention collateral damage to the press as he did?

    To me… it seems like two business egos are clashing here, and this move by Nichols was a return volley from the Katz release. To me this indicates the EIG are actually close to selling, and now they want to make Katz pay (in millions extra) before doing so.

    You don’t mention collateral damage from the EIGs perspective unless you are trying to attach a number to it as far as I can see.

    The game is hardball, and its now in Katz’s court.

    Just cut the drama please guys and close the deal… the city and fans are the furthest thing away from Cal’s mind right now.

  16. rickibear says:

    Cal Nichols stated on Rogers Primetime that if a member of the EIG group would like to leave they have established a retirement value of the EIG shares at 125M.

    Meaning they would have to sell them back at that value. Rather than the 175M offered. This allows the other investers who chose to stay to further profit off the shares.

    Cal also states that the other EIG share holders have the right to sell directly to another individual at what ever price they choose. But they need 2/3 approval for the sale to go ahead.

    Bob Mcowan brought up a critical point that the profit or in future financial risk for most of the large shareholders does not outway the benefit they recieve from being said share holder.

    No one will get to leave with this structure. Nore will they leave unless their is a huge return on investment.

  17. Dennis says:

    At the end of the day, the EIG holds all the cards and they fucking-well know it.

    Katz offer should’ve blown the doors off the actual value of the team yet fans still bought season packages in record time and they keep supporting the men who feed them just enough to live.

    When’s the endgame in all of this? Nichols mentioned yesterday that they’re gonna spend to the cap if the oppurtunity to win persents itself. You talk about vague!!! The oppurtunity to win, how would you define that? Is that the oppurtunity to win the Cup or the opp to win enough to make it back to the playoffs?

    The EIG hasn’t made their money by not being able to recognize a golden goose when they see one and they aren’t letting go of this one unless Katz blows them away.

  18. Master Lok says:

    IMO, If I was a member of the EIG I wouldn’t sell either. Considering that the Lightning was sold for a rumored $200 million, then Katz offer is really not that good for a town with devout and strong following in Edmonton.

  19. ClaytonMagnet says:

    Man, it’s tempting to think that Katz would be good for this franchise… but I can’t help but wonder if this is a case of ‘better the devil you know than the one you don’t’? Our last solo owner was great too at first. And we all know how that ended. I wouldn’t suggest that Katz has anything in common with Pocklington… but what happens if they cure the common cold, and no one needs his drugs anymore ;)

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