X

New York Islanders Sale to Jon Ledecky and Scott Malkin Reportedly Approved

Tyler Conway@jtylerconwayFeatured ColumnistSeptember 30, 2014

FILE - In this Jan. 12, 2006, file photo, New York Islanders' owner Charles Wang speaks during a news conference in Uniondale, New York. The Islanders have announced that the team is being sold to a former Washington Capitals co-owner and a London-based investor. In a statement Tuesday, Aug. 19, 2014, the team says a group led by former Capitals co-owner Jon Ledecky and investor Scott Malkin has reached an agreement to buy a
HENNY RAY ABRAMS/Associated Press

The National Hockey League's board of governors approved the sale of the New York Islanders to Jon Ledecky and Scott Malkin at their meeting Tuesday, ending one of the more controversial franchise transactions in recent memory.    

Under terms of the agreement, which was announced last month, current owner Charles Wang will continue as majority owner until 2016 before transitioning his shares to a minority stake. Chris Johnston of Sportsnet first reported the approval, which was deemed a "surprise":

Chris Johnston @reporterchris

Bit of a surprise at NHL board of governors meeting -- I'm told the sale of #NYI to Jon Ledecky and Scott Malkin was approved today.

The two-year wait was put in place in part to help the franchise's move to Brooklyn's Barclays Center, which will take place for the 2015-16 season. Wang will then be the majority owner for the club's lame-duck campaign at Nassau Coliseum and its inaugural campaign in Brooklyn.   

"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, a former co-owner of the Washington Capitals, said in a statement

Kathy Willens/Associated Press

While the parties involved are pleased with the deal's finalization, it was not without controversy. Wang, who was losing upwards of $20 million per season and was struggling to fund the Islanders, had initially agreed to a $420 million purchase price with hedge fund manager Andrew Barroway before backing out. Barroway sued Wang in August for backing out of the deal, alleging the Islanders owner wanted to up the price after the Los Angeles Clippers sold for $2 billion.

Video Play Button
Videos you might like

The suit alleges that Wang “without notice, abruptly refused to proceed to close the transaction” and attempted to add more than $100 million to the asking price, per Barbara Ross and Pat Leonard of the New York Daily News.

Earlier this month, Dan Primack of Fortune reported that Wang had a third, previously unknown agreement to purchase the Islanders with an investment firm called Peak Ridge Capital. Wang had allegedly been negotiating with Peak Ridge long before even Barroway became part of the equation and informed the Boston-based company it had won the big deal in July:

A source familiar with the situation says that Wang told Peak Ridge that it had a deal on July 28, the very same day that Barroway alleges that Wang began asking him for a $548 million price-tag. Wang then headed off to vacation in Hawaii (per the Barroway complaint), and left Peak Ridge with the impression that the documents would be executed upon his return. Then, four days later, Peak Ridge also learned about Ledecky and Malkin.

The unseemly negotiations process had some wondering whether the NHL would look deeper into Ledecky and Malkin's purchase before giving its approval. At the very least it appears Wang's negotiation tactics were to the line of cutthroat, and a civil court will ultimately determine whether his actions cost Barroway millions of dollars.

Julio Cortez/Associated Press

Ledecky owned 24 percent of the Capitals until 2001, when he sold his stake to majority owner Ted Leonsis. Malkin is based in London and made his fortune in the ownerships of retail outlets throughout Europe. No official purchase price has been given, but it has widely been reported to be around $548 million.

With the value of sports franchises skyrocketing and the Islanders moving into a state-of-the-art facility, Ledecky and Malkin should be satisfied with their purchase. Even if it took a good amount of controversy to get there.

Follow Tyler Conway (@tylerconway22) on Twitter

🚨 SPORTS NEWS ➡️ YOUR INBOX

The latest in the sports world, emailed daily.