Barroway completes buyout of Coyotes’ minority owners
Jun 12, 2017, 7:49 AM | Updated: 12:08 pm
(AP Photo/Ross D. Franklin)
GLENDALE, Ariz. — Coyotes majority owner Andrew Barroway has completed his buyout of the team’s minority owners, making him the sole owner of the franchise, league sources confirmed Monday morning.
The buyout means all the members of the IceArizona ownership group that purchased the team from the NHL in August 2013 will no longer be with the organization. That list includes co-owner and alternate governor George Gosbee, co-owner, alternate governor and president of hockey operations, Gary Drummond, president and CEO Anthony LeBlanc, co-owners David Duckett, Bill Dutton, Craig Stewart, Scott Saxberg, Robert Gwin and others.
“The reorganization is an effort to consolidate and strengthen the ownership and to resolve various disputes among the existing owners,” NHL Deputy Commissioner Bill Daly said. “We believe this will better position the club to achieve a long-term solution in the Valley.”
Barroway had initially considered bringing in additional investors such as Tampa Bay Rays minority owner Randy Frankel, but this buyout was completed through a loan with MGG Investment Group, a specialty finance group focused on direct lending. League sources said Barroway was also able to remove the NHL’s portion of the loan through MGG.
When Barroway became the majority owner in 2014, the Coyotes were considered U.S. owned, granting them access to the NHL’s credit line (around $100 million) at a low interest rate through Bank of America and Citibank; a move that would have been taxable in Canada. Part of Barroway’s debt is financed via that credit line; the rest through MGG at a higher interest rate.
It’s possible Barroway will add investors in the future, but there is no immediate intention to do so. ArizonaSports.com has learned that there is interest from at least two groups in either buying a portion of the team, or all of it from Barroway.
IceArizona gave Barroway a six-month time frame in which to execute this deal. The soft deadline for that deal was last week.
The Coyotes still need a new arena after commissioner Gary Bettman closed the door on remaining at Gila River Arena in Glendale — echoing sentiments the ownership group had repeated ever since the City of Glendale voided its 15-year arena lease and management agreement less than two years after approving it.
The Coyotes will continue to pursue multiple arena options, including a downtown location or a partnership with a municipality that might help get legislation through the Arizona Legislature in order to help defray the construction cost with a special tax district. There is also a site available on Pima-Maricopa Indian Community land which Arizona Sports first reported in October, but there is no current indication the Coyotes are pursuing that location.
The Coyotes are still meeting with multiple cities, with downtown Phoenix topping the list. The team still hopes to re-engage Suns owner Robert Sarver regarding a potential downtown location, but league sources said any talk of a partnership with the Suns is still considered premature.
A source said Barroway’s buyout will not impact other executives or personnel in the organization, but with Drummond gone, the Coyotes have lost the president of hockey operations they had for one season. Drummond was a key ally of coach/executive vice president of hockey operations Dave Tippett, who has four years left on his contract.
LeBlanc was the spokesperson for IceArizona the last four seasons and was part of other groups that attempted to buy the team before this group succeeded. A league source said the Coyotes have already begun searching for a new team president to help facilitate arena efforts, corporate sponsorships and other duties that fall within the purview of that job.
Barroway’s buyout of the owners could also impact captain Shane Doan’s decision on whether to return or retire. Doan hasn’t reached a decision yet, but he was particularly close with Gosbee.
Check back for updates to this story.
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