Speculation: Sens, Lebreton, and the NCC

[Joeyjoejoe]

Sure, but saying "whatever the reason" literally infers that you're not aware of it. that's all. Just trying to help.

lol what he said. And seeing how your the biggest Melnickel cheerleader here, its not out of probability that you don't understand why people hate him.

 

[NorthCoast]

Melnyk is not selling the team ........ and has stated so many times in the past year, and we have to get past the dream that some people have, who want a new owner to come in and "save the day" because, for whatever reason, they've come to dislike the current owner.

Yes he does not have a very diplomatic way of expressing himself, but he's telling the truth as he sees it.......... even if he's shooting himself in the foot on occasion.

To say that "he's running the team into the ground" would infer that he's doing it on purpose ........ and I don't buy that; it;s just not logical.

He's a businessman, who wants to at least turn a profit on his business ......... and declining attendance is a problem that his management group, lead by President and CEO Tom Anselmi has been working on since the end of last season.

We can all agree that for the past 25 seasons, int his expansion teams' history, the novelty of having the NHL in town has steadily worn off probably since the 2007 Cup run .................. and there are a lot of reasons why the drop in attendance has begun to hurt the bottom line, but the biggest one, for me is the location of the Arena and all that goes with that ...... the parking lot, poor public transit connections and lack of pre and post game atmosphere in and around the Arena.

It's obvious to everyone, that re-locating to Lebreton Flats will solve a number of issues, and most likley help the attendance issues, and stabilize the financial ability to fund the team with the added re-estate development opportunity that comes with re-vitalizing Lebreton Flats over the next two decades ............. and Melnyk is going all in on the Lebreton Flats project not just for the potential financial windfall of the re-estate aspect, but also to put the Senators on a sound stable foundation for the foreseeable future.

You're facts are not wrong but I think you need to keep drawing out what the logical conclusion is.

- Ottawa is a viable NHL market (maybe not top 10 but viable). History proves that through Sens attendance, 67s, Olympics, all the other levels of hockey, etc. etc. No way the NHL moves a team that can get it's own 400 million TV deal and has the ability to avg. 17k-18k attendance with a decent product on/off the ice.

- Further, Melnyk is not moving. The quote from Melnyk is included in a previous post about how renting doesn't work. Where is he going to move to where he would not be renting? Or is he going to buy a stadium from Quebec/Houston? and how is that cheaper (along with relocation fees, team-rebranding, etc, etc) and have more upside than Lebreton/Ottawa?

- Lebreton is going to happen. The team (regardless of owner), the city, and the fans (mostly) all support a Lebreton arena. Team gets more revenue from more concerts, development profits, new arena revenues (better luxury boxes), etc. City has a major attraction to draw consumers into a lebreton entertainment area. (They will not maximize the value of the land if the central piece for developers is a museum or library, and if they can't get the same uplift in taxes then they won't put in as much money...whole thing falls apart). Fans is obvious.

So, there is no other real option. The way I see it the NCC, City and Team need the arena as part of the deal, or else the finances really don't begin to work for any side. This is why the other bid likely included an arena even though they did not own the team.

The conclusion is that the team will be in Ottawa and at Lebreton. Melnyk could drag this out and stay in Kanata for a while but as revenues fall he will eventually be forced to sell and then the Lebreton talks will begin again with the new ownership.

Don't get what we are saying twisted. Melnyk's bad PR tactics aside, it doesn't matter if he owns the team, or Ruddy, or Santa Clause.

- The team is viable and needs to move to Lebreton.
- Whoever moves it to Lebreton will get plenty of ROI in the long-term.
- Whoever moves it to Lebreton needs a lot of upfront cash to fund the development.

If Melnyk can find the cash...Great! if not, then yes, I do want him to sell and have no issue pushing for him to sell it because any one of a handful of other billionaires would be happy to come in and take over the project with the development opportunity available.

 

[Take a Bath Son]

My biggest personal beef with Eugene Melnyk is his ongoing commentary on attendance. The cup run last year, he called the playoff attendance "disturbing". 9 playoff games at 97% sold is about 162,000 playoff tickets at rates 50% higher in most cases. Why oh why are you calling this disturbing??? He's bringing a landslide of hockey fans from across canada screaming at Sens fans for being fickle, not worthy etc... I'm sorry but this is my city and we have awesome fans. He could have given those 250 tickets to marketing and distributed them to potential buyers and there would have been ZERO issue with all this. The worst part about it is that its his brand and his team. He's hurting himself more than anything by alienating with those comments.

There are some characteristics to this market that require a very different approach to sales, this is a marketing issue; and the time has come to move that rink downtown-this certainly addresses a good part of those issues. It is what the buyers in this market want now and expect at this point (a blessing and a curse as he said)

We are going to find out Thursday what is going on. If Melnyk can execute this deal, I'll be downtown and buying tickets when it opens. If he stays in Kanata, I worry that there is no business model involving staying in Kanata that will yield any measure of success. Its too late and the move has to happen. Again, his comments about staying there, if serious, are very concerning.

I personally believe he does not have the cashflow to make Lebreton happen on his own; I've heard rumours of very high interest and when you look at his books. He would be making money were it not for debt payments. For this, I am hoping we see a new ownership structure, but we'll see.

All the comments here show a lot of passion. If nothing else, you can see people care about this team and while everyone sees a different angle, we can all hope for really positive news on Thursday.

 

[Tnuoc Alucard]

Sure, but saying "whatever the reason" literally infers that you're not aware of it. that's all. Just trying to help.

You're going out of your way to make some sort of point here. You've seen numerous posts by me, and post were I've replied to that talk about all the reasons on this site, that people site as reasons they dislike the owner.

So either you're not keeping track of the discussions I've been in concerning the various reasons people don't like the owner, or you have a memory issue, or you honestly don't think I know a single reason why people in these forums don't like the owner.

 

[Micklebot]

You're going out of your way to make some sort of point here. You've seen numerous posts by me, and post were I've replied to that talk about all the reasons on this site, that people site as reasons they dislike the owner.

So either you're not keeping track of the discussions I've been in concerning the various reasons people don't like the owner, or you have a memory issue, or you honestly don't think I know a single reason why people in these forums don't like the owner.

I guess the point is that when you go out of your way to call somebody out for not understanding the meaning of "for whatever reason", you should probably know it yourself.

I suppose I could have let it go, but then again, I've seen you go out of your way to correct people's grammar, so I thought you'd appreciate the pro tip. Guess I was mistaken.

 

[BonkTastic]

Works fine for me

Same here.

 

[BonkTastic]

So, the NHL provides a low interest line of credit for any teams that need it. I seem to recall reading up to 200 mil but I could be wrong there. Now, when it was initially introduced, there was an issue with CRA and they deemed it a taxible benefit or something to that effect wipping out the gain a team would get, so the canadian teams couldn't really get anything out of it. The article back then suggested the NHL was trying to remedy the situation, not sure if they have, and if I recall, it also suggested the banks Melnyk had been getting his loans from wanted out of sports financing all together, so it might not be a Melnyk thing so much as a sports thing. Purely speculation on my part, but there's not much to go on that I've read.

Yeah, I remember that. I also have no clue if it was ever remedied... since I can't find any news suggesting it was ever fixed, I'll assume it's still effectively broken for Canadian teams until I hear otherwise.

 

[BonkTastic]

In fairness I don’t really know the details. But most large financings have a marketing period for syndication. So it’s a question of whether he was travelling hat in hand to banks and asking for a loan, or whether he was marketing the debt (probably with the help of certain banks acting as arrangers) to potential investors.

I’m not in the loop and shouldn’t have tried to handwave it, that’s my bad.

No worries, man. I wasn't coming after you, just trying to elaborate.

From what I remember, the financing trip was less marketing the debt, and more trying to "borrow from Peter to pay Paul", so to speak. I'd have to look into it a bit more, I'm just going off of memory right now on this.

 

[18Hossa]

Same here.

Same for me.

 

[Mingus Dew]

No worries, man. I wasn't coming after you, just trying to elaborate.

From what I remember, the financing trip was less marketing the debt, and more trying to "borrow from Peter to pay Paul", so to speak. I'd have to look into it a bit more, I'm just going off of memory right now on this.

Haha thanks.

I think since I started doing lending work I have this tendency to jump into financing discussions without having the full picture.

If Melnyk was going directly to non-traditional lenders then that’s definitely abnormal. It’s one thing for a bank to syndicate a loan (most banks actually hold like none of debt they issue), but it’s another thing entirely to go directly to investors because banks won’t front/arrange in the first place.

It’s honestly kind of fascinating. And I say that as someone who doesn’t particularly like credit work.

 

[JD1]

so the article in the globe and mail that talks about the CRA and access to the NHL credit line was dated January 2015. in that article it says that the league was working with CRA officials to restructure the credit vehicle so that Cdn teams could use it. The article said it would take 3 months to solve but they were hoping to get it done sooner. I haven't read anything that said it was solved but according to that article it should have been sorted out by April 2015.

I can't see it being a difficult issue to solve. The CRA isn't in the business of dictating who you borrow money from. If anything lower interest payments equals more profit which equals more tax so it seems to me that all interests were aligned to get it done

 

[Micklebot]

so the article in the globe and mail that talks about the CRA and access to the NHL credit line was dated January 2015. in that article it says that the league was working with CRA officials to restructure the credit vehicle so that Cdn teams could use it. The article said it would take 3 months to solve but they were hoping to get it done sooner. I haven't read anything that said it was solved but according to that article it should have been sorted out by April 2015.

I can't see it being a difficult issue to solve. The CRA isn't in the business of dictating who you borrow money from. If anything lower interest payments equals more profit which equals more tax so it seems to me that all interests were aligned to get it done

I guess the question would be why does Melnyk need a travelling road show for refinancing if he has access to the NHL line of credit? The article suggests it a 2 billion dollar line of credit, so if he has access to a 31st of that, he should have no reason to seek other sources of financing. There clearly something missing, but it all speculative.

Edit, I guess if he's looking for around 150 mil as the article suggests he'd still need another source, assuming he can only borrow 1/31st.

 

[coladin]

Roadshowing an IPO or some form of securities? That's standard stuff.

Roadshowing to find financing because standard lenders won't touch you anymore? Less standard. From what I understand, it does happen, but it's also a sign that there is no liquid capital left.

It isn't so much to "find" financing, but to "maintain" . I don't know how you arrive at your conclusions sometimes. When will all of you understand that banks absolutely love him, because he pays his bills AND they make money off him.

 

[coladin]

The prices at the CTC are what the management groups believes "the market can bear".

An Arena, centrally located directly on top of the LRT will have different market conditions than the current location ...... and prices will be set accordingly.

So you think that people in this city will tolerate higher concession/ticket prices? Just because the arena is downtown? I don't think so. People were pumped to go the CTC in 1996 for a month. And then it was back to crowds of 11K in a brand new arena. Money talks in Ottawa. Always has.

 

[coladin]

My biggest personal beef with Eugene Melnyk is his ongoing commentary on attendance. The cup run last year, he called the playoff attendance "disturbing". 9 playoff games at 97% sold is about 162,000 playoff tickets at rates 50% higher in most cases. Why oh why are you calling this disturbing??? He's bringing a landslide of hockey fans from across canada screaming at Sens fans for being fickle, not worthy etc... I'm sorry but this is my city and we have awesome fans. He could have given those 250 tickets to marketing and distributed them to potential buyers and there would have been ZERO issue with all this. The worst part about it is that its his brand and his team. He's hurting himself more than anything by alienating with those comments.

There are some characteristics to this market that require a very different approach to sales, this is a marketing issue; and the time has come to move that rink downtown-this certainly addresses a good part of those issues. It is what the buyers in this market want now and expect at this point (a blessing and a curse as he said)

We are going to find out Thursday what is going on. If Melnyk can execute this deal, I'll be downtown and buying tickets when it opens. If he stays in Kanata, I worry that there is no business model involving staying in Kanata that will yield any measure of success. Its too late and the move has to happen. Again, his comments about staying there, if serious, are very concerning.

I personally believe he does not have the cashflow to make Lebreton happen on his own; I've heard rumours of very high interest and when you look at his books. He would be making money were it not for debt payments. For this, I am hoping we see a new ownership structure, but we'll see.

All the comments here show a lot of passion. If nothing else, you can see people care about this team and while everyone sees a different angle, we can all hope for really positive news on Thursday.

After a rousing series against Boston, so many highlights, the fanbase responds with 2,000 empty seats? Your spin on things is hilarious. It was pathetic and embarrassing. Sad thing was it was incredibly loud and exciting for those who were there. What did you want them to market? People didn't want to spend the money. There isno sugar coating that fact and as an owner, I would be pretty disturbed.

 

[FolignoQuantumLeap]

So you think that people in this city will tolerate higher concession/ticket prices? Just because the arena is downtown? I don't think so. People were pumped to go the CTC in 1996 for a month. And then it was back to crowds of 11K in a brand new arena. Money talks in Ottawa. Always has.

I definitely think people will be okay with paying a higher price for tickets especially if we save on parking and take the LRT. I would definitely be willing to pay more. I'd probably go to less games due to a budget but the quality of the game day experience would so much greater. Get some food in China town before the game, head to a pub on Preston after for beers. God it would be awesome.

 

[Take a Bath Son]

After a rousing series against Boston, so many highlights, the fanbase responds with 2,000 empty seats? Your spin on things is hilarious. It was pathetic and embarrassing. Sad thing was it was incredibly loud and exciting for those who were there. What did you want them to market? People didn't want to spend the money. There isno sugar coating that fact and as an owner, I would be pretty disturbed.

I think your interpretation is a bit off. Lets look at the playoffs and see if things are in fact disturbing:

Series one: 3 Home Games average attendance 18846 (over 100%). For the record boston was 17565.
series 2: 3 home games average attendance 18168 (98.2%). For the record New York was 18006
Series 3: 3 home games average attendance 18623 (over 100%). For the record Pittsburgh was 18609.

In real numbers we had higher attendance than ALL our opponents. We averaged about 98-99% and that one game you mention? I know all about it because I was buying tickets for that round. Our opponent was announced on Sunday, the Senators reserved ticket sales for 24 hours before releasing to the general public. this left only 48 hours to sell tickets but that wasn't the only issue. They were selling saturday game tickets and Game 5 tickets. So that one game that didn't sell out? It had a mere 48 hour sales window and competed against 2 other games, one being a weekend game. the reality is that in those 48 hours, 50 thousand tickets were sold. It just so happened the first game was the least attractive to buyers.

Spare me the Melnyk sob story. I am so done with it. the fact that he called the above playoff attendance disturbing, thereby unleashing a rash of negative press for a team on an amazing run is a serious problem. And he did it again with 35000 tickets sold outside in December. Seriously, I'm going to the boston game on Thursday and if there is no progress on Lebreton, I am done giving money to Melnyk. I just don't need this abuse and this city deserves better.

 

[Knave]

So you think that people in this city will tolerate higher concession/ticket prices? Just because the arena is downtown? I don't think so. People were pumped to go the CTC in 1996 for a month. And then it was back to crowds of 11K in a brand new arena. Money talks in Ottawa. Always has.

Some will, some won't. This isn't a zero sum game. The arena will be physically closer and in a more desirable location for the vast majority of Ottawa residents and fans.

 

[JD1]

I guess the question would be why does Melnyk need a travelling road show for refinancing if he has access to the NHL line of credit? The article suggests it a 2 billion dollar line of credit, so if he has access to a 31st of that, he should have no reason to seek other sources of financing. There clearly something missing, but it all speculative.

Edit, I guess if he's looking for around 150 mil as the article suggests he'd still need another source, assuming he can only borrow 1/31st.

so what traveling road show are we talking about? With an 80 cent dollar, the TV revenue which is guaranteed and ticket revenue which is pretty predictable I don't think there's much of an issue with financing, doubly so considering the debt to equity ratio.

Financing arena construction and lebreton on the other hand is a different situation. They are likely looking for significant financing for that but that's a different deal altogether.

 

[JD1]

Some will, some won't. This isn't a zero sum game. The arena will be physically closer and in a more desirable location for the vast majority of Ottawa residents and fans.

I think a new arena will definitely support higher pricing. I don't go to many games because of location. but I dropped 2 grand on last year's playoff run. being centrally located will make it way more attractive for many people.

 

[Micklebot]

so what traveling road show are we talking about? With an 80 cent dollar, the TV revenue which is guaranteed and ticket revenue which is pretty predictable I don't think there's much of an issue with financing, doubly so considering the debt to equity ratio.

Financing arena construction and lebreton on the other hand is a different situation. They are likely looking for significant financing for that but that's a different deal altogether.

The roadshow being referred to is the one Melnyk identified when saying he wasn't selling the team

Exclusive: Senators owner Melnyk 'not selling the team — period'

“(The) only thing I can think of is our routine refinancing of our debt involves a financial ‘roadshow’.

 

[JD1]

The roadshow being referred to is the one Melnyk identified when saying he wasn't selling the team

Exclusive: Senators owner Melnyk 'not selling the team — period'

Ok....so I have a question for you...and it's a legit question, I'm not being a smart ass

there's a lot in that article including Melnyk using the word routine with respect to the debt.

How does this board go from "routine" to traveling roadshow with a side spin that it's some kind of crazed freak thing foaming at the mouth looking for money.

Melnyk said routine. Looking at the debt to equity ratio and the guaranteed revenue streams associated with the team the financing would be pretty routine. The roadshow aspect would be lining up the most favourable terms. a 1/2 point on 100 is 500k so not chump change. I suspect the lenders are bidding on the debt moreso that the Eug hoping someone will lend him the money

 

[coladin]

I think your interpretation is a bit off. Lets look at the playoffs and see if things are in fact disturbing:

Series one: 3 Home Games average attendance 18846 (over 100%). For the record boston was 17565.
series 2: 3 home games average attendance 18168 (98.2%). For the record New York was 18006
Series 3: 3 home games average attendance 18623 (over 100%). For the record Pittsburgh was 18609.

In real numbers we had higher attendance than ALL our opponents. We averaged about 98-99% and that one game you mention? I know all about it because I was buying tickets for that round. Our opponent was announced on Sunday, the Senators reserved ticket sales for 24 hours before releasing to the general public. this left only 48 hours to sell tickets but that wasn't the only issue. They were selling saturday game tickets and Game 5 tickets. So that one game that didn't sell out? It had a mere 48 hour sales window and competed against 2 other games, one being a weekend game. the reality is that in those 48 hours, 50 thousand tickets were sold. It just so happened the first game was the least attractive to buyers.

Spare me the Melnyk sob story. I am so done with it. the fact that he called the above playoff attendance disturbing, thereby unleashing a rash of negative press for a team on an amazing run is a serious problem. And he did it again with 35000 tickets sold outside in December. Seriously, I'm going to the boston game on Thursday and if there is no progress on Lebreton, I am done giving money to Melnyk. I just don't need this abuse and this city deserves better.

My interpretation is from being there. It is always a mad scramble to fill that arena. We had twitter raging with blue dot arena update pics for the whole playoffs. That I remember. And of course, the 2,000 empty seats to our first Round 2 game in years. And spare me the attendance percentages because they jammed 20,500 for Alfie's night only 4 months earlier. So, it's more like almost 4K empty seats. You didn't need Melnyk to unleash anything about attendance. Toronto media and the rest of Canada did a mighty fine job on their own. I enjoyed watching Ottawa "fans" get all defensive. Hilarious. Sad state of affairs, and of course a million excuses come out, which makes it even more pathetic.

What makes you think Ottawa deserves better? 16K to a Round 2 game in Canada is bloody disturbing. They should be automatic sellouts. So, you can go ahead and round to the nearest percentage point. For me, it doesn't pass the sniff test, which smells like poop. And, by the way, everyone found the playoff attendance disturbing. Google it. Watch Tim and Sid and the epic rant. Google that one too.

You don't have to give your money to Melnyk. Just don't complain about the consequences of it. You can support the players and cheer for them without cheering for Melnyk.

 

[Micklebot]

Ok....so I have a question for you...and it's a legit question, I'm not being a smart ass

there's a lot in that article including Melnyk using the word routine with respect to the debt.

How does this board go from "routine" to traveling roadshow with a side spin that it's some kind of crazed freak thing foaming at the mouth looking for money.

Melnyk said routine. Looking at the debt to equity ratio and the guaranteed revenue streams associated with the team the financing would be pretty routine. The roadshow aspect would be lining up the most favourable terms. a 1/2 point on 100 is 500k so not chump change. I suspect the lenders are bidding on the debt moreso that the Eug hoping someone will lend him the money

To be fair, people were speculating about Melnyk's finances prior to that article, so nobody went from routine to mouth foaming freak looking for money.

I said it at the time the article came out, this is likely just the result of the deal he signed way back in 2015 come to term and needing to be renewed. Having said that, the rumours (in that 2015 article) were that he was having a difficult time finding favourable rates last time, which probably is part of what's leading to some believing he'd similarly had a tough time this time around.

 

[Take a Bath Son]

16K to a Round 2 game in Canada is bloody disturbing.

Winnipeg’s capacity is only 16345...just sayin’.

I don’t want to battle with you. Attendance could have been better but it was good overall and I don’t agree with the owners approach-at all.

I want this team to thrive. I’m sure we can agree that progress on lebreton will be very welcome news. If he makes it happen, I’ll stick it out but if he turtles back to Kanata...he’s in for a world of hurt.