1. Rick MacWilliam / Edmonton Journal

    • On a summer day in 2008, his trademark brown curls brushing the collar of a tailored suit jacket, Daryl Katz stood before a microphone in an aging hockey arena named for his drugstore empire and uttered his first public words as owner of the Edmonton Oilers.

    • “Well, thank you, everybody, and good morning,” he said, his smile tight and slightly strained. “So, we finally meet face to face. I’m sure some of you thought that would never happen.” With those words, the elusive billionaire who had just paid $200 million to buy the hockey team he had idolized as a boy offered a rare glimpse behind the curtain of reticence he keeps carefully drawn between himself and the public.

    • Glimpses like that, people would come to learn, were about all they could expect to see of the man whose wealth and position have thrust him into the very spotlight he to tries so diligently to avoid.

    • Edmonton is a quiet and far from boastful city. It is, perhaps, fitting then that what may be its largest home, perched above its signature river valley, should be owned by a quiet and far from boastful billionaire who is rarely seen or heard in public.

    • For the past two years, while the Katz Group and the city have by turns privately negotiated and publicly clashed over a proposed $475-million downtown arena to host Edmonton’s beloved hockey franchise, the team owner has been vilified in some circles, lionized in others, seen by few, heard only occasionally, and truly understood, it is imagined, only by the friends, employees and business associates who help to jealously guard his privacy.

    • Those in his tight-knit inner circle say Katz is a loyal friend who values loyalty in others, and what people see, or rather what they don’t see, is just Katz being himself.

    • “I remember when he was giving his very first press conference, and his only press conference, for that matter,” says Lyle Best, president and CEO of Quikcard and a former board member of the Edmonton Oilers Community Foundation. “I was by the dressing room door. He was gathered there with his parents and his kids. He was very uncomfortable. He was pacing, and made it pretty clear to anybody who was going to listen that this was a one-off. That’s just not his comfort zone.

    • “When you think about it, here was a guy who was buying the most public asset in Edmonton and he wanted to make it the most non-public thing he could do. He was pushed into it (the news conference) or overridden by some of the hockey guys, that it was important that he do this.”

    • The Irish playwright Oscar Wilde once famously quipped: “The only thing worse the being talked about, is not being talked about.”

    • Daryl Katz would likely not agree.

    • At that first news conference as Oilers owner, Katz told a story that perhaps sums up just how unaccustomed he is when dealing with the media, and by extension, the public.

    • “I understand now that you all refer to this as a presser,” Katz said, using the media slang for press conference. “To give you an indication of how unfamiliar that is to me, I ran into Bob Stauffer a few weeks ago. Kind of ran into him; he was stalking me, as usual.” (At the time, Stauffer was afternoon host on Team 1260 Radio; within months, he was working for the Oilers providing commentary on game broadcasts.)

    • “Bob said to me,” Katz continued, lowering the timbre of his voice to make it gravelly, “‘So, Daryl, when you’re finished with all this, are you going to have a presser?’ Not wanting to let on how naive I was, I said to Bob, ‘Of course I’m going to have a presser.’ Thinking that it was a beverage that old-time frat boys had to celebrate some kind of rite of passage. So if this is a presser, so be it.”

    • The joke fell flat but the point was made. The new team owner was not a “presser” kind of guy.

    • Katz has shown, since then, that he will talk in public when he believes he has no other choice. But for the most part, other people do the talking for him. There are public relations staff who handle inquiries about the Oilers, and another team that handles dealings with the Katz Group itself. His personal public relations is handled by Longview Communications, a company with offices in Vancouver and Toronto.

    • Back in 2008, a New York journalist who had occasionally interviewed Katz for an industry magazine, speculated that Katz would likely have a higher profile after buying the team.

    • “Of course, that doesn’t mean he’s going to become a Donald Trump type,” said Mike Vogel, speaking of the billionaire developer with the famously strange hairstyle and the penchant for courting public attention. “He can do it without going from one extreme to the other. But I think he’ll be a little more public. He’ll have to be.”

    • Perhaps not.

    • The contrast between the two billionaires, one closed-mouthed, the other blabbermouthed, could not be more stark. The Donald has 1,931,000 followers on Twitter, where he regularly dispenses what passes for wisdom, such as this recent post: “It’s often necessary to boast, but it’s even better if others do it for you.” Four years after buying the Oilers, Daryl Katz seems to have no need or desire to boast; he has no Twitter account, no Facebook page, and rarely grants interviews.

    • It is not, of course, unusual for the very wealthy to also be very reserved.

    • In the course of writing this article, the Journal contacted or tried to contact dozens of people who grew up with Daryl Katz, went to school with him, attended law school with him, worked for him or have been friends over the years. Many declined to be interviewed. At one point, Longview Communications provided the Journal with a list of approved people to speak with.

    • “I think there are a lot of uni-dimensional, virtually cardboard caricatures that have been used in describing Daryl,” says Bob Black, a close friend for 40 years who now works for Katz on the arena project.

    • Yet friends and associates who agreed to be interviewed spoke mainly in generalities, using many of the same words — kind, generous, brilliant, thoughtful, loyal — but told few specific anecdotes that might illuminate his character further.

    • Lacking the colours and textures necessary to bring the man himself into clear focus, a writer is left to study shadows, hoping to see the outlines of a life. American poet Stephen Vincent Benét once wrote that Civil War general Robert E. Lee was “a figure lost to flesh and blood and bones, frozen into a legend out of life ... and kept his heart a secret to the end, from all the picklocks of biographers.”

    • During the eight weeks the Journal worked on this story, it became clear that those closest to Katz are equally vigilant about manning the ramparts erected around him. As a result, we know little about what Daryl Katz thinks or feels, about how he spends his days or his money, about where he vacations, or what his dreams or deepest fears might be.

    • Several people from the University of Alberta law class of 1985 suggested the Journal contact Fabio Guarducci or Immo Sintenis, who were both said to be close friends of Katz when he attended law school. When contacted, Sintenis, a real estate lawyer in Edmonton, said tersely, “I’m not interested!” and immediately ended the call.

    • The Journal contacted a man who once worked on Katz’s security staff. When a reporter introduced and explained himself, the man sounded angry and quickly said: “This call is over. You call me again and I’ll charge you with harassment. Understand?”

    • Absolutely.

  2. Chapter 1: The early years

    The wealthy and powerful man so many people refuse to talk about was born in Edmonton on May 31, 1961, the first child of Barry and Ida Katz. The couple later had two daughters, Shelley and Alyssa.

    Barry Katz had opened his first small drugstore in 1955 in the old Clock Drugs shop on Stony Plain Road. By the early 1960s, he was operating an 8,000-square-foot drugstore in Capilano Mall that afforded his family a comfortable, upper-middle-class lifestyle.

    It was in his father’s store that Daryl Katz first learned the business, and perhaps first saw the opportunities the industry held for an aggressive investor willing to take risks.

    A decade ago, Barry Katz spoke to a reporter about those early days, recalling how his son, then a toddler, would run down the store aisles with his arm extended, his small hand knocking bottles and boxes off the shelves. “He was a terror in the store,” Barry Katz said of his son.

    When he reached school age, young Daryl was sent to the Talmud Torah school in the Glenora neighbourhood. Lewis Kay, now a professor of biochemistry at the University of Toronto, went to elementary school with Katz and remembers him as a hard worker.

    The two boys were in the same class through sixth grade, and later attended night classes together at the school.



    Daryl's father Barry Katz.

    The storefront of the first drug store ever operated by Barry Katz. It is located on Stony Plain Road.
    Chris Schwartz/ Edmonton Journal

    The Talmud Torah school as it was when Daryl Katz was a student. Image courtesy of the the Jewish Archives and Historical Society of Edmonton and Northern Alberta.

  3. Larry Wong photo

    The first home of Barry and Ida Katz in Rio Terrace.
    Larry Wong / Edmonton Journal

    Ed Kaiser

    The Katz family later moved to Quesnell Crescent.
    Ed Kaiser / Edmonton Journal

    JAHSENA Archives

    The gym at Talmud Torah, the school Daryl Katz attended as a child.
    JAHSENA Archives

    “Even throughout elementary school, he was quite studious,” Kay recalls. “He was quite determined to understand the material and do well. I remember going to his house one day for a play date ... and he had already finished a project the class had been assigned weeks in advance. He was very determined.”

    The Katz family was then living in the Rio Terrace neighbourhood; for several years the family home was at 15425 75th Ave. Barry and Ida Katz later moved a few blocks east, to a home at 127 Quesnell Cresent, a property with a view of the North Saskatchewan River valley.

    Kay says the boy he remembers from elementary school, where students learned Hebrew and studied religion in addition to the standard curriculum, showed early signs that he expected much from himself.

    “I think he always had a sense of direction,” Kay says. “I think that’s a credit to the upbringing he got and to his very nature. He was a focused individual who clearly wanted to succeed, even at an early age.

    “This was not somebody who was born into the monarchy. His father had a drugstore ... and that was it. The rest was really Daryl’s doing, with I’m sure some help, but it was really his dream and his innovation. But the diligence and the persistence can probably be traced back to those days at Talmud Torah.”

    Kay recalls that his classmate was a good athlete, a fast runner on the soccer field. Katz also excelled in the swimming pool, winning first-place ribbons each year up to Grade 5. Kay remembers it well, because he finally beat his friend in Grade 6.



  4. As a teenager, Katz attended Jasper Place High School in the city’s west end. In Grade 11, he was a member of the junior boys basketball team. He appears twice in the 1978 yearbook — even then, his trademark shaggy hair collar-length in back.

    During those years, Katz played high-level competitive tennis, travelling around Western Canada and into the United States. On the courts at the Hillcrest tennis club, he met Black, and the two remain close friends to this day. Even as a teen, Black says, his friend was fascinated by business.

    Glen B. Scott, now a partner with Brownlee LLP in Calgary, has been a close friend of Katz since 1975; they were in high school and law school together. Scott’s wife grew up down the street from Katz, and used to “steal his tricycle” when he was a little boy.

    Katz drove a Mustang convertible to school, white with black pinstripes, as Scott recalls. “We used to go to parties and hang out,” says Scott, who was a year ahead of Katz at Jasper Place and graduated in 1978. “He was an introverted person. He didn’t have a big pack of people around him. Ever.”

    After high school, Katz enrolled at the University of Alberta, and eventually attended law school there. Some members of the 1985 law class either did not remember Katz or said they did not know him well in those days.



    Katz, his name misspelled as "Darryl," in the 1978 Jasper Place High School yearbook.

    Jasper Place High School.
    Google Earth

    Katz was a member of the junior boys basketball team at Jasper Place High School.

  5. Daryl Katz's graduation photo from the University of Alberta.

    • Guarducci, who comes from a wealthy Italian family and now owns a resort on the Tuscan coast in Italy, told the Journal he and Katz were close friends back in law school.

    • “What type of story are you writing?” he asked, when the Journal reached him in mid-November.

    • Told the article was intended to be a profile of Katz, he asked: “Does he know about this?”

    • “You know why I ask? Because I’m definitely very good friends with him, and I’m quite sensitive when you guys are writing about him.”

    • The resort owner asked for a phone number and promised to call back. He never did.

    • John Cox was also in that law class. He moved to Toronto after law school, where he has a successful practice and he and his wife have raised five sons. When the Journal left a telephone message asking for an interview about a former classmate who now owns the Edmonton Oilers, Cox later said he went home and did a Google search.

    • “I thought, ‘Oh, cool, it’s Daryl,’ ” Cox says. “And I immediately thought, good for him, he was a nice guy.”

    • His sons are hockey fans. “I said, ‘Hey, guess what, boys? A guy I went to law school with owns the Edmonton Oilers.’”

    • In a class filled with competitive people who have gone on to success, Katz did not stand out, Cox says, except that he drove a black Porsche 911 to university each day. “I didn’t realize how wealthy the guy was. He wasn’t pretentious about it at all.”

  6. Above and below: Katz in the stands during an Oilers Stanley Cup final game in 1987.

    • Chapter 2: Rise to power

    • The 1980s were heady times in Edmonton. The Oilers won four Stanley Cups that decade, and the players and a few well-heeled fans mixed socially in nightclubs, bars and restaurants around town. Katz was in the thick of things, and at the time was dating Jill Pocklington, daughter of Peter, who then owned the Oilers.

    • “They were kind of strange times back then,” says Scott. “I remember being at a bunch of clubs and the Oilers would always roll in. That’s when Gretzky was dating Vicki Moss. “I’m sure I was with Daryl a couple of times when we drank out of the Stanley Cup.”

    • Bruce Saville, who once owned shares in the Oilers as part of the Edmonton Investors Group, recalls that Katz was part of the players’ social circle in those days. “He was a friend of the Oilers, all the way along. He was a friend of Kevin (Lowe) and he knew lots of people, and he knew some of the players.”

    • Saville says he’s not sure how Katz made the transition from fan with a ticket to friend with a backstage pass. “Other than he was a wealthy guy of their age, they were looking for guys in the community to have fun with. It just happened.”

    • Thousands of Edmonton boys grow up dreaming of playing for the Oilers. Katz, from early on, may have had bigger dreams in mind.

    • “He might have been thinking about, ‘Yeah, I’m gonna own these guys someday,’” Scott says. “Or it would be fair to say (Katz was thinking) I’m gonna own a professional hockey team.”

    • Katz articled at Barr, Wensel, Nesbitt and Reeson, and later went to work for Joe Shoctor, who was willing to let the young lawyer practise law and pursue his business interests at the same time. Within a few years, Katz was running his own practice out of an office in the Canadian Commercial Bank Building, now the Bell Tower. He focused on corporate and franchise law, and in the late 1980s picked up the Alberta franchise rights to the Yogen Fruz chain.

    • But his flirtation with the frozen yogurt business didn’t last long. He soon saw huge profit potential in the pharmacy trade, and in 1991, in partnership with his father, Katz paid some $300,000 for the Canadian rights to the U.S.-based Medicine Shoppe drugstore franchise.

    • “It (Medicine Shoppe) had 1,000 stores in the U.S.,” Katz later told National Post Business Magazine. “If my father wasn’t in the business and didn’t have a history,” he said, “I would never have succeeded in getting it.”

    • To help fund the deal, Katz secured backing from Edmonton’s Vencap Equities, a now defunct venture capital fund that was established by the Alberta government.

    • “It (Vencap) did provide him with a little financial capability and helped to start his ball rolling,” says Sandy Slator, who managed the fund at the time.

    • “It was one of his first ventures. Daryl was in business with his dad, and they made a compelling case that they could do things differently in the drugstore industry,” he recalls. “It was an investment that paid off for Vencap, but it wasn’t a huge deal. He was just a local entrepreneur we provided support to, and who went on to bigger and better things.”

    • In 1992, Barry and Daryl Katz opened their first Medicine Shoppe store on 106th Avenue, in Edmonton’s Forest Heights neighbourhood. Around the time he started his company, Katz was living in a luxury condo in the LeMarchand Mansion on 100th Avenue.

    • Two years later, Katz married Renee Gouin, a member of one of Edmonton’s wealthiest families, and the couple moved to Riverside Drive. Her parents, Jean Yvon and Carol Gouin, had started a Spruce Grove company called North American Construction Group in 1952, which they built into one of the largest mining and heavy construction companies in Canada.

    • Around the time he started his company, Katz and his wife were living in a luxury condo in the LeMarchand Mansion on 100th Avenue.

    • Over the next two decades, relentlessly, deal by deal and risk by risk, Katz built a huge private company and accumulated a personal fortune that has made him the 15th richest person in Canada (according to Canadian Business magazine) with a net worth estimated in November 2012 at more than $3 billion.

    • “Daryl is just a really great combination of high intelligence, drive, guts and creativity,” says Black, who was two years ahead of Katz in high school and a year ahead in law school, and now works as executive vice-president for the Katz Group’s Edmonton arena corporation. “It’s a formidable package.”

    • On the business side of the ledger, few of Edmonton’s corporate power brokers will talk about Katz on the record. Several who know him declined interviews for this story, as did a number of consultants who do business with Katz’s firms.

    • Half a dozen Bay Street analysts, who cover publicly traded pharmacy chains like Shoppers Drug Mart and Jean Coutu Group, also shunned interview requests. That’s partly because Katz’s network of 400-plus drugstores – including his flagship Rexall chain and the Rexall Pharma Plus stores in Ontario – are privately owned, and thus, equity analysts at Canada’s major investment firms have little interest in tracking Rexall’s performance.

    • As a result, little is known about how Katz’s corporate empire operates, including the profit levels it spins off and the health of its balance sheet.

    • Nonetheless, through past interviews with this newspaper and other publications, it is possible to sketch at least an outline of how this shy son of a local pharmacist became one of Canada’s richest men.

    • Through the many deals that Katz forged over the past two decades, the portrait that emerges is one of an uber-confident, aggressive deal-maker with a flair for boardroom combat, the smarts to use the clout of key corporate partners, a willingness to take on significant debt when warranted, and a sharp eye for top executive talent.

    • Katz has shown a proclivity for snapping up companies with bloated bureaucracies and promptly slashing their overhead costs to boost profits, while retaining only a small senior executive team.

    • “Here’s what I’d say about Daryl. He’s brilliant — brilliant from all perspectives,” says Larry Latowsky, an ex-CEO of Katz Group Canada and now a consultant for Kohl & Frisch, a Concord, Ont.-based health care products distributor. “I wouldn’t say his success was because of timing. I would say his success is because of the strategies (Katz employs) and the way he runs his operations. I think how he built the business was just brilliant.”

    • Although Katz wasn’t born into the kind of opulent, inter-generational wealth found in Toronto’s moneyed Forest Hill neighbourhood or Vancouver’s tony Shaughnessy district, his family was affluent enough.

    • Barry Katz was a successful local pharmacist with a good head for business and a flock of loyal customers. His Value Drug Mart store in Edmonton’s Capilano Mall was for decades a neighbourhood landmark and afforded the family a comfortable, upper middle-class lifestyle.

    • After earning his law degree, Daryl Katz briefly focused on franchise law, and in the late 1980s picked up the Alberta franchise rights to the Yogen Fruz chain. But his flirtation with the frozen yogurt business didn’t last long. He instead saw huge profit potential in the pharmacy trade, and in 1991, in partnership with his father, Katz paid some $300,000 for the Canadian rights to the U.S.-based Medicine Shoppe drugstore franchise.

    • “It (Medicine Shoppe) had 1,000 stores in the U.S.,” Katz later told National Post Business Magazine. “If my father wasn’t in the business and didn’t have a history,” he confided, “I would never have succeeded in getting it.”

    • To help fund the deal, Katz secured backing from Edmonton’s Vencap Equities. The defunct venture capital fund, established by the Alberta government, was wound down during former premier Ralph Klein’s first term in office.

    • “It (Vencap) did provide him with a little financial capability and helped to start his ball rolling,” says Sandy Slator, who managed the fund at the time.

    • “It was one of his first ventures. Daryl was in business with his dad, and they made a compelling case that they could do things differently in the drugstore industry,” he recalls. “It was an investment that paid off for Vencap, but it wasn’t a huge deal. He was just a local entrepreneur we provided support to, and who went on to bigger and better things.”

    • In 1992, Barry and Daryl Katz opened their first Medicine Shoppe store on 106th Avenue, in Edmonton’s Forest Heights neighbourhood. It was a modest beginning for a company that quickly became an industry powerhouse. At its peak more than a decade later, the company would own or control some 2,000 drugstores, including roughly 300 in the U.S., with annual sales of well over $6 billion.

    • Although Katz Group unloaded a big chunk of its pharmacy assets for $920 million in cash earlier this year, markedly shrinking the company’s corporate footprint, it remains a big player in Canada.

    • Brent Belzberg is founder and senior managing partner of TorQuest Partners, a Toronto private equity fund that buys and sells mid-market companies, mainly in Canada. He has known Katz for more than 20 years.

    • “He was looking to buy some drugstore businesses in the east,” Belzberg says, “and he came to see me to see if we could help him at that point, because we had a private equity fund, to be his partner. We never did the ultimate transaction, because he did it on his own.”

    • On that trip to Toronto years ago, Katz sat in the lobby and waited, like anyone else, briefcase in hand and his head filled with plans. “He was just like any other small business guy who walked in here,” Belzberg says.

    • By the time that two-hour meeting ended, Belzberg knew Katz wasn’t just another guy with an idea. He recalls thinking at the time: “This is one great guy. This guy is going to be special.”

    • Around the time he started his pharmacy empire, Katz was living in a luxury condo in the LeMarchand Mansion on 100th Avenue. By 1996, he had assembled enough money to acquire the Rexall drugstore chain in Canada, which operated just a few dozen stores.

    • Although the history of the Rexall brand stretched back to the early years of the 20th century, its cachet had faded badly, and by the mid-1990s it was only a bit player in Canada’s drugstore industry.

    • Still, the acquisition proved to be a pivotal one, not only because Katz had a plan to revive the tired and tattered Rexall banner, but because it paved the way for a new partnership with one of America’s mightiest corporate behemoths, McKesson Corp.

    • The San Francisco-based company, the largest drug distributor in the U.S. with annual revenues of more than $120 billion (three times larger than Canada’s entire retail pharmacy sector) supplied Rexall’s stores with inventory.

    • Just six years after opening his first Medicine Shoppe outlet, Katz’s rapidly expanding network included about 80 Rexall stores, 30 Medicine Shoppe outlets, and a small number of other independent retailers.

    • “Daryl is a born entrepreneur,” says Scott. “He doesn’t limit his mind. People think in a box, and his box is very big. You might think, ‘Well, one day I’ll be the publisher of the Journal.’ He would think, ‘I’m gonna own all the newspapers in North America.’ Most people wouldn’t think that.”

    • Surely not. And yet Katz was just getting started; his next deal would prove to be a company-maker — “the one that got everything going,” he later told the National Post.

    • When Toronto-based supermarket operator Oshawa Group put its Pharma Plus drugstores in Ontario up for sale, Katz, then just 36, decided to make a bold bid to acquire the money-losing 143-store chain. The price tag was a reported $100 million.

    • Katz didn’t have that kind of money, but for McKesson, it was little more than pocket change. And since Pharma Plus was McKesson’s main customer in Ontario, keeping the troubled chain afloat was vital to McKesson’s Canadian growth plans, Katz told the Journal in a 2003 interview.

    • “If they lost Pharma Plus, their biggest customer in Ontario, they would be wiped out of Ontario. So I was able to leverage inventory almost 100 per cent, and receivables 100 per cent. And they essentially facilitated that,” he said.

    The first Medicine Shoppe opened in Forrest Heights by
    the Katz Group in 1992.
    Rick MacWilliam / Edmonton Journal

    Daryl and Barry Katz officially opening their flagship Rexall
    drug store at Jasper Avenue and 118th St. in August 2004.
    Jason Scott / Edmonton Journal

  7. Ed Kaiser

    The Rexall brand has always been paramount. The blue and orange colour scheme was introduced in 2003.

    Katz purchased naming rights to the new tennis facility at York University in Toronto in 2004.
    Google Earth

    • With McKesson’s backing, the debt-driven deal basically doubled the size of Katz’s empire overnight.

    • Katz promptly recruited Norman Puhl to oversee the turnaround at Pharma Plus, and Puhl soon doubled its sales and ramped up profits, making it the jewel of Katz’s empire.

    • Belzberg says Katz is the kind of man who spends many hours alone, which gives him time to think about the big picture. “He doesn’t consider himself as the manager of the business. So he’s the owner but not the manager. On the drugstore business, he doesn’t have to run it every day, so he has tons of time to think about it, and to find the best people to run it.”

    • In 1999, perhaps emboldened by the success of the Pharma Plus acquisition, Katz considered bidding for Shoppers Drug Mart. With more than 860 large-format stores and $4.5 billion in annual sales, Shoppers was – and still is — the giant of Canada’s drugstore industry.

    • According to a 2002 piece in Forbes magazine, it was Belzberg who introduced Katz to James Lee, then the vice-chairman of New York’s Chase Manhattan Bank (now part of JPMorgan Chase). Belzberg had also played a role in helping Katz to acquire Pharma Plus.

    • “Anyone ever lose money on you, kid?” Lee reportedly asked Katz, before arranging a bank syndicate to lend him $1.6 billion US to acquire Shoppers. But Katz, who would have been forced to give up some of his equity to get the deal done, got cold feet.

    • “I had the money and everybody was pushing me to do it,” Katz told Forbes.

    • In the end, he balked.

    • “I would have had to have brought in a big private equity firm from New York (as an equity partner in the deal). We had all the money lined up, but it was the wrong time,” Katz later told the Journal.

    • Before 1999 ended, Katz expanded into the U.S. by acquiring the money-losing Minnesota-based Snyders Drug Store chain, which operated in six states and churned out a reported $300 million U.S. in annual revenues. Two years later, he enlarged his U.S. holdings by acquiring the Drug Emporium big-box discount chain.

    • “He’s not afraid to gamble what he has on the next great idea,” says Belzberg. “He’s not looking for security, he’s looking for the next one. He’s not going to rest at what he has.”

    • But like many Canadian retailers who have expanded south of the border, from Canadian Tire to Future Shop, Katz’s foray into the ultracompetitive U.S. retail marketplace came to a painful conclusion.

    • Snyders filed for bankruptcy protection in 2003.

    • And though it later emerged from creditor protection, Snyders had to sell or close Drug Emporium’s remaining stores. Subsequently, Snyders continued to downsize, and in early 2010, Katz Group sold its remaining 25 Snyders stores to U.S. pharmacy giant Walgreen Co. for an undisclosed amount.

    • Within the Katz Group stable, the Rexall brand has always been paramount. In 2003, the company began sprucing up and promoting the brand far more aggressively. The relaunch included the rapid rollout of scores of new, larger-format stores across the country — such as the 15,000-square-foot outlet on Jasper Avenue, across from Earl’s Tin Palace — replacing dozens of smaller, older Rexall outlets.

    • Katz Group also promoted a fresh look for the brand in national newspaper, TV and billboard ads that featured Rexall’s distinctive blue and orange colours. A flurry of new Rexall products began hitting store shelves in 2004.

    • The same year, Toronto’s new $45-million Rexall Centre, a 12,500-seat tennis and entertainment complex on the campus of York University, opened its doors. Katz, a talented tennis player, purchased naming rights to the facility for 10 years.

  8. Chapter 3: The Oilers

    In 2006, Katz and his wife and their twins, Harrison and Chloe, moved into a 25,000-square-foot modernist mansion on Edmonton’s Valleyview Point, overlooking the North Saskatchewan River valley. Three years ago, Katz paid to build an outdoor rink beside home, so his children would have somewhere to skate and play hockey. The rink has artificial ice, boxes for players and boards topped with protective glass and decorated with ads for PharmaPlus, Guardian drug stores and the Oil Kings.

    By the time Katz decided to make his bid for the Oilers, he was well known in Canadian business circles, popping up regularly in national magazine rankings of the country’s wealthiest tycoons.

    Bruce Saville, a former member of Edmonton Investors Group, which owned the team for a decade starting in 1998, says Katz put out his first “feeler” in 2005.

    “He was sniffing around. He had some interest and was quietly letting people know that he had some interest in acquiring the Oilers, and what would be involved in acquiring the Oilers and what were the rules (within EIG about selling).”



    Ed Kaiser

    Bruce Saville, a former member of the Edmonton Investors Group, which owned the Oilers for a decade starting in 1998.
    Ed Kaiser / Edmonton Journal

    Above and below: Members of the Edmonton Investors Group after they purchased the Oilers.
    Ian Scott / Edmonton Journal

  9. Katz and Oilers' president Patrick LaForge in 2003, when the name of the Northlands Coliseum was changed to Rexall place.
    Bruce Edwards / Edmonton Journal

    Katz with National Hockey League commissioner Gary Bettman at an Oilers game in 2011.
    Larry Wong / Edmonton Journal

    • “I asked a lot of people: is this guy for real? Is he a good guy? I never found anybody who said anything bad about him."

    • Saville says he and Katz had a few conversations, where Katz asked: “What would a guy do if a guy was interested in approaching (EIG about a sale)?"

    • “My answer was always, ‘I don’t know what the hell you’d do, because it’s structured to block you (or anybody else). In two respects: one, no individual could own more than 20 per cent, I think. And then there was this thing called the retirement amount. The retirement was in the shareholders’ agreement and it was always set at an artificially low price, basically what we bought it for. And it never really changed.

    • “The problem with it was, whenever somebody was interested in selling or anybody died — one or two guys died — there was a rule that said, if you wanted to sell any or all of your shares, you first had to offer all of your shares to EIG at the retirement amount, the artificially low number.”

    • For example, if the share price was set at $50 internally, and an offer came in for $100 per share, those shares had to be offered to EIG members at the lower rate.

    • When his initial offer of $145 million was spurned by the investors group, Katz continued to up the ante. He could seemingly afford anything he wanted, and usually got what he wanted.

    • As the offers improved over time, Saville says, more and more owners wanted to sell. Some still wanted to stay on, but knew they would have to borrow heavily to buy the shares of those who wanted to cash out. The two sides eventually came to terms, with Katz paying $200 million to buy the Oilers in February 2008.

    • “He tells everybody that it’s the best acquisition he’s ever made,” says Craig MacTavish, who played for the Oilers for eight seasons and later coached the team under Katz. “I don’t know that it’s the most lucrative, but it’s the best acquisition he ever made.”

    • In four years under Katz’s ownership, the team has struggled to escape the NHL basement. But after three consecutive No. 1 draft picks — Taylor Hall, Ryan Nugent-Hopkins and Nail Yakupov — it’s clear the Oilers' rebuilding process is well along, and the future — once the NHL lockout ends — seems brighter.

    • By becoming an NHL owner, Katz was thrust unwillingly into a very bright spotlight. It’s one thing to own a giant drugstore chain, quite another to own a pro hockey team in a city with hundreds of thousands of rabid fans.

    • “In a bigger city, it’s probably easier to blend in,” Katz once told the Journal, well before he bought the team. “You’re not as big a story.”

    • In hindsight, that might have been the biggest understatement of his life.

  10. After two decades of almost continuous growth, in January of this year the Katz Group reduced its retail operations, when it announced the sale of Drug Trading Co. and Medicine Shoppe Canada to longtime ally McKesson Corp., for $1.2-billion, of which $920 million was in cash. The sale included “non-core” franchises, but the Katz Group retained the corporate-owned stores, which represent about 90 per cent of the company’s assets, says a source familiar with the deal. The company also announced that Rexall had simultaneously acquired Dell Pharmacies, an 18-store chain in southern Ontario. The net result: Katz Group’s network of corporate and franchised stores had shrunk to about 450 outlets, down from a peak of about 2,000 stores.

    “This transaction unlocks significant value through the sale of two outstanding but non-core assets,” Katz said in a news release at the time. “We will intensify our focus on our corporately owned Rexall and Rexall/Pharma Plus store network ... We will also accelerate the growth of our related real estate interests.”

    Industry watchers at the time said the deal would significantly bolster the billionaire’s personal wealth. “Oh, yeah, he’s way in the money,” said one analyst, who spoke on condition of anonymity. “He could build an arena by himself.”



    A drive-through at one of the Rexall stores still owned by the Katz Group.
    Larry Wong / Edmonton Journal

    • As the CEO of a private company, Katz is accustomed to a world where negotiations and deals are conducted and signed in boardrooms, with no need to answer to shareholders, or the public. His hockey team, too, is a private company. But the $475-million downtown arena the team insists it desperately needs to sustain its financial future in the city will, if it is ever built, require political and public support.

    • And that changes everything.

    • Since buying the Oilers, Katz has been locked in one of the longest-running, most fractious civic debates in recent Edmonton history — the debate over that proposed new arena. This time, the back and forth, the give and take, the proposals and counter-proposals have played out with a whole city watching, with opponents and supporters parsing every word.

    • During a presentation to city council in the summer of 2010, Katz sat in the centre of a row of executives in suits and laid out his vision for the proposed arena and the downtown development around it. “It’s no secret that I have a lifelong passion for the Oilers and would desperately like to see the Stanley Cup back in Edmonton,” he told councillors. “But that’s not why I bought the team. If that was all this was about, I could have remained a fan without all this public attention.”

    • This September, that public attention was suddenly focused on a trip to Seattle made by Katz and team officials, a trip some observers insisted was a blatant bargaining ploy, an unveiled threat that the Oilers could move if the arena deal does not proceed. Soon afterward, reacting to criticism, Katz took out full-page newspaper ads to make his case directly to the people. At one point in the apology, he wrote: “As I think you all know by now, public communications is not in my nature. Chalk that up as a personal shortcoming.”

    • “It seemed like a good idea to everybody at the time,” MacTavish says of the Seattle trip. “I think that whole trip was a byproduct of a very high level of frustration on Daryl’s part. We’re all human, we’re subjected to emotions."

    • During the trip, Katz met with Chris Hansen, the billionaire behind Seattle’s new arena project, who hopes to regain an NBA franchise for that city. The Edmonton group, MacTavish says, couldn’t help but notice how well-regarded Hansen is in Seattle.

    • “The thing that was obvious to me was that everybody was coming up to Hansen, and it was just like, ‘Hey, Chris. Great job, bringing the NBA back here, really appreciate what you’ve done for the city.’ I think that was an eye-opener for me. Why in Seattle and not in Edmonton?”

    • This fall, after years of study, consultation, intense lobbying, countless closed-door meetings, an attempted intervention by NHL commissioner Gary Bettman, and ever-changing proposals and counter-proposals about how to structure a deal, a clearly exasperated Mayor Stephen Mandel demanded that Katz appear before city council to make his case.

    • When Katz refused, council voted to end negotiations on the proposed arena deal.

    • Seven weeks of silence followed.

    • But even with the arena deal stalled, Katz could not escape the media spotlight. A month after the Seattle trip, he was back in the news when financial statements made public by Elections Alberta showed Katz, his family and executives at his company had given $300,000 to the Alberta Progressive Conservative party during last spring’s provincial election.

    • Earlier this week, the company asked for and was granted permission to appear again before council. Company executives showed up en masse Wednesday, without Katz, to say they’re willing to take off the table a request for a $6-million annual subsidy from the city, and are willing to pay a “reasonable share” of any cost overruns.

    • And so the dance continues.

    • MacTavish says it has been difficult to watch his boss go through the past few months, with all the publicity and criticism about the arena deal.

    • “It has been hard knowing him and seeing this whole persecution, to a certain degree. The personal attacks have been pretty hard to fathom. I know that negotiations can get pretty emotional. But in this city, everybody has had a bit of a whack at him. In a lot of ways, he’s a guy that instead of being vilified, should be more revered for what’s he done for the city.

    • “He’s definitely not the carpetbagger that he gets portrayed as. He has shown that he’s going to put the finances back into the hockey team, time and time again.”

    • Brent Belzberg says what Katz has accomplished in the past two decades is proof that his first impression was right. “Here’s a guy who started as a lawyer in a relatively small city and built one of the biggest wealths in Canada in a relatively short time, without any real family money. It doesn’t happen very often.”

    Gallery: Katz at city council and conceptual art from the proposed downtown arena.Click one of the black buttons to see a different photo.


     

    • Katz has an eye for people and knows a good idea when he sees one, says Belzberg.

    • “He’ll pick up the phone, and he’ll say: ‘There was this guy who had an idea in a technology area, and I gave him some money, and he needs some additional partners. And I think he’s an amazing guy. I don’t know how much money I’ll make on this. But you should meet the guy. He deserves to succeed’ And I’ll sit down with the guy, and you can understand why Daryl thought the guy deserved to succeed. He was just a good guy who had a great idea, and Daryl decided he was going to help him.”

    • Men like Katz, at some point, are no longer motivated by money.

    • “Guys like him, money is just the measure of the success,” Belzberg says. “It’s like the goal in the soccer game. For him, his wealth is a byproduct of his success in building a world-class industry in Canada.”

    • Bill Comrie, who last month sold his remaining 25 per cent of The Brick, the Edmonton-based furniture empire he founded and ran for years, first met Katz about 20 years ago.

    • “Daryl’s a very, very smart businessman,” says Comrie, father of former Oilers forward Mike Comrie. “He’s very driven to succeed. He will probably grow whatever he has bigger.”

    Daryl Katz with his wife Renee and Bill and Roxanne Comrie at a private reception for donors and sponsors at the Mazankowski Alberta Heart Institute Gala at the Jubilee Auditorium in 2008.
    Chris Schwartz / Edmonton Journal

  11. Katz in Cartoons

    Daryl Katz has been caricatured by Journal editorial cartoonist Malcolm Mayes. Here are some of the works that have appeared on the Journal's editorial pages over the last decade. Click one of the black buttons to see a different photo in the gallery.

    Gallery notes:

    • 1. While Katz was attempting to purchase the team.
    • 2. From March 4, 2011
    • 3. From May 21, 2012
    • 4. From Sept. 19, 2012
    • 5. From Sept. 28, 2012
    • 6. From Oct. 26, 2012
    • 7. From Nov. 2, 2012

    Gallery: The Katz home under construction in 2003.
    Click one of the black buttons to see a different photo.

      Chapter 4: Life at home

    • Twenty years into his success story, Daryl Katz enjoys an opulent lifestyle but reportedly works as hard as ever.

    • “I’m on the phone all the time,” Katz told the Journal in 2003. “I carry my email with me wherever I go. I’m on the computer at three in the morning. I get woken up with calls from the East when it’s seven o’clock there and five here. So it is all encompassing. You can’t be away from it. Not that I want to get away from it.”

    • Daryl and Renee Katz also own a penthouse in the Fairmont Pacific Rim building in on West Cordova Street in Vancouver, a home in Palm Springs, Calif., and a cottage at Pigeon Lake south of Edmonton.

    • With floor-to-ceiling windows, the 6,549-square-foot, two-storey Vancouver penthouse offers panoramic views of the harbour. The condo, with three bedrooms and four bathrooms, was bought by a numbered company in April 2010 and had an assessed value of $14,592,000 last year.

    • Earlier this year, the couple filed a lawsuit with the B.C. courts seeking damages for a June 9, 2009, fire that was allegedly started while workers were renovating the condo. The lawsuit outlines $1,040,949.46 in damages caused to blinds, electronics, the security system, structural features, area rugs, furniture and artwork.

    • Lyle Best says it not unusual for wealthy people to have several homes, or for those who can afford the luxury to escape Edmonton when the days are cold and the snow piles up outside. “I think if you actually looked at most captains of industry in Edmonton — and I don’t know that there’s a regiment of captains of industry here, it’s not a head-office town — but a lot of these people aren’t around much in the winter. If you didn’t have to be, if you had the money, why the hell would you?”

    • When the CEO of the Katz Group throws a party, it turns heads even among the company he keeps. After the Heritage Classic outdoor NHL game at Commonwealth Stadium in 2003, players from the Oilers and the Montreal Canadiens, along with alumni from both teams, gathered at the Century Grill for a party hosted by Katz.

    • “He brought in Colin James (to entertain),” says Best. “We all knew that he was paying for the party, but he basically was invisible that night. You’d see him standing in a corner, watching the band.

    • “He did a similar thing when (Mark) Messier’s number was retired (in 2007). He threw a party at Lux and, again, he brought in Tragically Hip, I think it was. But when he does events like that, you don’t see him. He’s not like a guy who stands at the microphone and says, ‘Look what I’ve done here.’

    • “You wouldn’t even know he was there. That’s something about him that a lot of people don’t realize. Some people say it’s because of his reclusiveness, but I just think that part of his ego doesn’t need public stroking.”

  12. Katz home in Edmonton

    In 2006, Katz, his wife Renee and twins, Harrison and Chloe, moved into a 25,000-square-foot modernist mansion on Edmonton’s Valleyview Point, overlooking the North Saskatchewan River valley.

     

    Photos credits: #1, #2, #8 by Ed Kaiser, #3, #7 by Ryan Jackson,
    #4 Supplied by the City of Edmonton, #5 by Journal Staff, #6 by Bruce Edwards.

  13. Larry Wong photo

    Daryl Katz and wife Renee arrive at Rexall Place as he makes his first appearance as the new Oilers owner in July 2008.
    Larry Wong / Edmonton Journal

    Ed Kaiser

    Daryl Katz, Diane and Rob Christie and Katz's wife Renee in January 2008.
    Supplied photo

    Katz watches a scrimmage at Oilers Rookie camp at Rexall Place in September 2009.
    Shaughn Butts / Edmonton Journal

    Rich families throw more lavish parties and take more expensive holidays than the rest of us, but they also seem to have bigger fights. The Gouin family’s construction company was sold for $347 million in 2003. Soon afterward, Renee Katz and her sister, Elaine Busch, filed a $116-million lawsuit against their father and their brothers, alleging they had been denied a rightful share of family fortune. The sisters filed a discontinuance to the claim in February 2010, bringing the legal battle to an end.

    Over the years, Daryl and Renee Katz, now 51 and 61, have given millions to charities, to hospitals and universities, to the Art Gallery of Alberta, and many other causes.

    Those close to the billionaire say he values family, friendship and loyalty above all other things.

    “He’s very focused on his kids,” says Glen Scott.

    The Katz twins, now 12, have attended a private school in Vancouver. Harrison, with his mop of curly red hair, has appeared on stage with his father during NHL drafts, and had his picture taken standing next to those first-round picks.



  14. “They’re about as normal as you can imagine,” Scott says of the children.

    “He’s fantastic to his family, he’s amazing with his parents,” says Belzberg. “He’s completely dedicated to his two kids, to a level that most of us would only aspire to. Often these guys are made out to be something different than they are. He does the same things you do every day. He goes and plays with his kids. He reads a novel, he watches the hockey game. When you meet him, that’s what you think of him. He’s just a pretty regular guy.”

    Friends who spoke to the Journal say Katz is, in the end, a private man who wants to maintain his privacy, a family man who wants to protect his family.

    “I don’t think he’s a Howard Hughes recluse type,” says Best. “I think he genuinely just doesn’t want to be in the limelight. I think that’s part of his mystique.”



    Katz and family enjoying an Edmonton Capitals game in July 2010.
    Walter Tychnowicz / Edmonton Journal

    Sam Abouhassan (left) and Kevin Lowe (right) with Katz at the Tee Up for Tots golf tournament for the Stollery Children's Hospital in August 2007.
    Supplied photo

  15. Daryl Katz (supplied photo by Brenda Bastell Photography).

    • Those same friends say there is nothing mystical about the loyalty Katz shows for those who earn and keep his trust. At the end of the 2008-2009 NHL season, with the Oilers finishing out of the playoffs for the third straight year, Craig MacTavish realized the time had come to step aside as coach.

    • “I knew at that point (in the ’09 season) that the gig was up,” MacTavish says. “I always thought I’d be able to see the end sooner than anybody else. I think we all (Steve Tambellini, Kevin Lowe) kind of arrived at the same conclusion, we all knew it was over.

    • “Daryl was the only guy. He had to be convinced. He wanted to hear it from me. That act of loyalty was a little bit insightful, in terms of his character, from my perspective. He showed a lot of loyalty toward me. ... You don’t forget those moments.”

    • MacTavish says his boss has been misrepresented in much of the narrative that has grown around him over the years.

    • “It’s a great story,” he says. “It’s just an unbelievable story that a guy can grow up in Edmonton, go to law school here, have relatively not much (growing up) and put this all together — a guy who owns the hockey team, wants to be part of building a facility downtown. It’s a good story. It should be a story (that’s) celebrated.”

    • Oilers president Kevin Lowe, who has known Katz since the glory days of the 1980s, says his boss has been frustrated over the past four years.

    • Asked whether Katz would ever think of selling the team to rid himself of the headaches, he says: “I think he’s had those emotions. But he’s not that flippant. He doesn’t change that quickly. I know how much he loves the team. He’s in it for more than that (the money). Probably his long-range plan is he passes it down to his son, Harrison. He loves it that much, and Harrison loves it.”

    • MacTavish, too, thinks Katz will keep the team in Edmonton, and finally get an arena deal ironed out. “He’s not going to be driven out of a situation, that’s for sure. He’s got a good life, he doesn’t need the Oilers. At some point, there could be a point where you go, ‘Is the benefit worth subjecting myself and my family to some of these situations?’

    • “But I don’t see that, at all. He’s got a vision, he’s a big-picture guy. He’s got a vision of seeing that Stanley Cup presented to the Oilers in a new building downtown.

    • “He’s normally pretty good at seeing those visions through.”


    • Credits

    • Rick McConnell - Writer

    • John MacKinnon - Writer

    • Gary Lamphier - Writer

    • Lucas Timmons - Web production