Katz’s Oilers Deal Gets $100M Financing
Canadian pharmaceutical group chairman buys out Edmonton’s ice hockey team, plans in offing for new arena.
July 8, 2008
Rexall Sports Corp., the vehicle utilized by Daryl Katz, the chairman of Canadian pharmaceutical company Katz Group, has arranged a $100 million senior secured credit facility to finance its deal to buy the Edmonton Oilers, it was announced Tuesday.
Katz will also seek to open a new arena for the Oilers, likely to include a number of upgrades from Rexall Place, where they have played since the early 1970s, according to Gordon Saint-Denis, managing director of CIT Group's media and entertainment shop.
Katz’s Rexall Sports Corp. spent about $200 million in February to acquire the Oilers. Upon completion of the financing package, Katz praised CIT for their assistance in an announcement.
“We are pleased that the CIT team was able to complete the transaction in a timely manner,” Katz said. “Their strong relationship with the NHL certainly assisted in the process.”
Having a new venue, one likely to exceed the sub-20,000 seat capacity of Rexall Place, will help the Oilers ramp up revenue in the near term. That, combined with Edmonton’s prosperity given its proximity to the Canadian Oil Sands, could help the hockey team generate enough capital to compete with a free agent market that has grown more aggressive and against the Oilers’ advantage in recent decades.
The once-prominent Wayne Gretzky-led Edmonton team dominated the National Hockey League throughout the 1980s, earning five Stanley Cup trophies, but after trading away Gretzky, fell into obscurity for well over a decade after acquisitions and draft picks failed to pan out. Now, with Russian ice hockey teams paying premiums for NHL players and further diluting the American talent market, having an expanded revenue pool could help catapult the Oilers back into championship contention.
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