New York Islanders New Ownership Takes Over
Jon Ledecky and Scott Malkin become the New York Islanders majority owners starting the 2016-17 season, as long-time owner Charles Wang becomes a minority shareholder. What does this shift mean for the team?
The news of a New York Islanders ownership change came in August 2014 when it was announced that Ledecky, who previously co-owned the Washington Capitals, and Makin would take over as majority shareholders in two years time.
The price of the sale was reported to be $485 million by Forbes. An astounding price when you consider that Forber listed the value of the franchise at $325 million as of November 2015.
Ledecky isn’t a newcomer to the sports ownership world. He not only co-owned the Washington Capitals with now majority owner Ted Leonis, but he had a number of bids beat out for a number of other teams across leagues including the Montréal Canadiens and the Washington Nationals.
Scott Malkin on the other hand, has never owned a sports franchise. So we have a guy who has wanted nothing more than own a sports team in Jon Ledecky and another guy who’s made his money opening upscale shopping malls in Europe.
Both are individually wealthy. And both bring different business experience to the table. But aside from their business acumen, what does this new ownership scheme for the team and the on-ice product?
A Fifth Ring
When interviewed after the progressive takeover, the two were asked what their goal was for the franchise. Rather, than provide a highly scripted answer filled with vague cliché statements that we’ve all heard, the two said exactly what Isles fans wanted to hear: “a fifth ring.”
It’s three words, but those three words provided an insight into these two individuals. Of course just saying you want to win a Stanley Cup is great, who doesn’t? But to craft a message that encapsulates the history of a franchise and it’s frustrations in three words is masterful.
But again, saying is one thing, doing it is an entirely other proposition. How do you get that fifth ring exactly?
The biggest factor is to spend on players. It’s not to go out and dole out millions of dollars to the very first UFA available. But rather maximize spending to the limit allowed by the league. It sounds like a simple solution, just spend $71.4 million on players. But in order to spend that money, a team first needs to make that money.
No Money, ‘Mo Problems
It’s no secret that the Islanders aren’t exactly rolling in piles of money. There’s a reason that they don’t spend to the cap. And that’s due to a number of factors, one being attendance.
Of the 30 teams in the league, the Islanders ranked 28th in terms of average attendance in 2015-16. It doesn’t help that they play in a stadium designed for basketball games, and ranks 29th in terms of capacity in the NHL.
Even if filled to capacity for every home game, the best the Islanders could do is average 15,795 fans, good enough to jump four spots to 24th. And in no way good enough to get them up to a place where spending to the cap or even close to it makes sense.
It’s not like the Islanders are far from spending to the cap. In 2015-16 they were but $5.1 million from the ceiling. But in a league where 80% of revenue comes from traditional means, increasing gate receipts goes a long way to securing financial stability for the franchise.
These new owners are saying all the right things. And they might very well be willing to spend more on players next season. But in order to do so, they have to maximize the number of fans going to the games. Leaving that unattended will certainly spell financial doom for the two.