Can the NHL STOP Melnyk from moving to Quebec City ( or anywhere else )?

[Mightygoose]

Right. So wouldn't it make more sense for him to make a deal with an operator of an arena in the GTHA where in the long term the value of the franchise would be much greater. Moving from Ottawa to Quebec doesn't really make a lot of sense for Melnyk or for the league. It's a lateral move at best for everyone involved.

Though it would help with the franchise value. The issue is there is no arena being planned in the GTA where Melnyk can get a lease. A building already exists in Quebec City.

Melnyk cannot afford to partner with anyone to build an arena in Ottawa so there's no chance he can do it anywhere else and keep 100% of the team.

Looking at the OP again. If the plan is to move to QC and then sell all or part of the team, if is endgame is ultimately to sell there's local interests in Ottawa.

Even if LeBreton in it's current form falls apart, as long as the prospects to build one still exists (and there seems to be with Devcore), the chances of the Sens moving to QC is pretty much zero.

 

[MNNumbers]

Some simple thoughts on the subject:

Legally they can't stop him. He's owned the team well beyond the 7-year clause, if that even exists in his purchase contract. He owns the CTC, so there is nothing in a lease there binding him. So, let's say he moves:

If he tries to move to Houston:
Fertitta apparently, from recent news about his reaction to luxury tax in the NBA, is not an overly-wealthy man. It's unlikely that Melnyk would get anything favorable in the way of a lease, leaving him subject to game night revenues only. I would think it unlikely that Fertitta would even share Naming Rights. So, on the financial balance, this doesn't look like a good move.

If he tries to move to Hamilton:
Well, at least there is a place to play. I suppose ticket prices would be sky high. And, I suppose he could negotiate something from the increased sponsorship and Naming Rights. But, the arena is probably not going to be viable for long without serious cash involved, so again i don't see this as a really good move.

If he tries to move to Quebec:
Here is where things are complicated, and positive in many ways. The situation in Quebec for Quebecor, who has the operating rights to the arena is that:
#1- Quebecor is a publicly traded company, and as such may not have a way to put up the cash necessary to purchase a team.
#2 - Quebecor is a media company, and have the operating rights, but are currently, from reports, losing money on that deal.
#3 - Quebecor, as a media company in Quebec, would see their value absolutely sky-rocket if there were an NHL team playing there, because of the rabid nature of Quebec fans toward NHL.
For these reasons, there is an argument to be made that Quebecor, as a company, would be MORE profitable with a team playing in the Centre Videotron, even if they had to make some concessions to the team in the matters of sponsorship and Naming Rights.

The team, under Melnyk, would have this:
#1 - A huge local fan base, very rabid, which I suppose could be killed, but that would take a lot of time in Quebec.
#2 - Because of that, the team would function better financially in Quebec than they could in Ottawa.
#3 - No need for investing cash into an arena, because the current one there is state of the art.

Now, I'm not predicting anything. Nothing at all. But, I see Quebec as the ONE AND ONLY possibility for a relocation under present ownership, simply because the operators of the arena in Quebec are the only ones anywhere whose own business would profit from the presence of a team.

Think about it:
In Kansas City, you will have to pay rent, in a new market, and the rent will be somewhat high, because the city is losing revenue booking you there.
In Houston, same thing applies, except that now it's Fertitta who has 41 nights he can't book a concert of something. He loses money because of that.
In Hamilton, the arena costs are going to be prohibitive for Melnyk.

But, in Quebec, and only in Quebec, you have a situation where the operator might WELCOME a team, because of how it would affect their other business.

That alone makes it intriguing.

 

[MNNumbers]

And, sorry for the double post, but if the idea would be to sell minority interests and then later majority rights, then the question becomes more muddled.

Aside from Quebecor, the names associated with a Quebec team are the same ones associated with DevCore. So, it's a completely valid question to ask:

Why not sell part of the team now to DevCore's interests, and put an arena in LeBreton and play there?

And, I suppose the answer might be:
Because you have to pay for the arena. And, that might be the answer on Melnyk's part as well as on the buyer's part. Whereas, if you go to Quebec, the arena is already there.

 

[snovalleyhockeyfan]

My only reaction to all of this is Ottawa deserves better than this. And yes, Bettman is powerless to stop it. More recent example is the Thrashers to Winnipeg.

The league will have a problem on its hands if Melnyk is allowed to move the team to Quebec.

 

[Mightygoose]

And, sorry for the double post, but if the idea would be to sell minority interests and then later majority rights, then the question becomes more muddled.

Aside from Quebecor, the names associated with a Quebec team are the same ones associated with DevCore. So, it's a completely valid question to ask:

Why not sell part of the team now to DevCore's interests, and put an arena in LeBreton and play there?

And, I suppose the answer might be:
Because you have to pay for the arena. And, that might be the answer on Melnyk's part as well as on the buyer's part. Whereas, if you go to Quebec, the arena is already there.

That is one way to look at it for sure.

The again, if Devcore is willing to build the arena or at least part of it, does it make sense for Melnyk to sell part of the team knowing he doesn't have to pay the entire cost himself.

To take this a step further, if Melnyk somehow does get a good lease in QC and applies to move it. This will become public and from there local interests will come forward to buy the team and work with Lebreton. Depending on how much they offer of course, but if their offer is something the board would approve, that will make a interesting discussion for those running the league in how to move forward.

 

[SunDancer]

Though it would help with the franchise value. The issue is there is no arena being planned in the GTA where Melnyk can get a lease. A building already exists in Quebec City.

Melnyk cannot afford to partner with anyone to build an arena in Ottawa so there's no chance he can do it anywhere else and keep 100% of the team.

Looking at the OP again. If the plan is to move to QC and then sell all or part of the team, if is endgame is ultimately to sell there's local interests in Ottawa.

Even if LeBreton in it's current form falls apart, as long as the prospects to build one still exists (and there seems to be with Devcore), the chances of the Sens moving to QC is pretty much zero.

Yes, a new arena would have to be a part of a planned move. The issue in Ottawa is essentially Melnyk doesn't want to bring anything to the Lebreton project other than the Sens. He believes his asset is worth around $700 million and that's too rich for his partners. The trick would be to find someone in the GTHA that would bite and be willing to go in on some kind of new development. A long shot to be sure.

 

[Grudy0]

I'm thinking this is exactly like the Thrashers situation...

Even if the NHL could force the sale of the franchise, it's entirely possible that Melnyk could sell the franchise but not the Canadian Tire Centre, meaning the new owner would have to deal with Melnyk as a landlord.

Things just got mighty interesting.

 

[SunDancer]

Some simple thoughts on the subject:

Legally they can't stop him. He's owned the team well beyond the 7-year clause, if that even exists in his purchase contract. He owns the CTC, so there is nothing in a lease there binding him. So, let's say he moves:

If he tries to move to Houston:
Fertitta apparently, from recent news about his reaction to luxury tax in the NBA, is not an overly-wealthy man. It's unlikely that Melnyk would get anything favorable in the way of a lease, leaving him subject to game night revenues only. I would think it unlikely that Fertitta would even share Naming Rights. So, on the financial balance, this doesn't look like a good move.

If he tries to move to Hamilton:
Well, at least there is a place to play. I suppose ticket prices would be sky high. And, I suppose he could negotiate something from the increased sponsorship and Naming Rights. But, the arena is probably not going to be viable for long without serious cash involved, so again i don't see this as a really good move.

If he tries to move to Quebec:
Here is where things are complicated, and positive in many ways. The situation in Quebec for Quebecor, who has the operating rights to the arena is that:
#1- Quebecor is a publicly traded company, and as such may not have a way to put up the cash necessary to purchase a team.
#2 - Quebecor is a media company, and have the operating rights, but are currently, from reports, losing money on that deal.
#3 - Quebecor, as a media company in Quebec, would see their value absolutely sky-rocket if there were an NHL team playing there, because of the rabid nature of Quebec fans toward NHL.
For these reasons, there is an argument to be made that Quebecor, as a company, would be MORE profitable with a team playing in the Centre Videotron, even if they had to make some concessions to the team in the matters of sponsorship and Naming Rights.

The team, under Melnyk, would have this:
#1 - A huge local fan base, very rabid, which I suppose could be killed, but that would take a lot of time in Quebec.
#2 - Because of that, the team would function better financially in Quebec than they could in Ottawa.
#3 - No need for investing cash into an arena, because the current one there is state of the art.

Now, I'm not predicting anything. Nothing at all. But, I see Quebec as the ONE AND ONLY possibility for a relocation under present ownership, simply because the operators of the arena in Quebec are the only ones anywhere whose own business would profit from the presence of a team.

Think about it:
In Kansas City, you will have to pay rent, in a new market, and the rent will be somewhat high, because the city is losing revenue booking you there.
In Houston, same thing applies, except that now it's Fertitta who has 41 nights he can't book a concert of something. He loses money because of that.
In Hamilton, the arena costs are going to be prohibitive for Melnyk.

But, in Quebec, and only in Quebec, you have a situation where the operator might WELCOME a team, because of how it would affect their other business.

That alone makes it intriguing.

Quebecor certainly has the motivation to put an NHL team in QC, but I don't see how Melnyk benefits from his team in QC. I think of the bolded only your third point is valid. The Quebec and Ottawa markets are not that different and a well managed team in downtown Ottawa would be just as successful as a team in QC. Quebecor would need to offer Melnyk a very sweet deal in order for it to make sense and unless they could do something on the media front, I don't see it.

Melnyk's best (and easiest) option is to be a part of a larger, more lucrative development in downtown Ottawa.

 

[Mightygoose]

I'm thinking this is exactly like the Thrashers situation...

Even if the NHL could force the sale of the franchise, it's entirely possible that Melnyk could sell the franchise but not the Canadian Tire Centre, meaning the new owner would have to deal with Melnyk as a landlord.

Things just got mighty interesting.

That's possible, however if the new owners are the ones building LeBreton (i.e. Devcore and/or it's partners), then they would be more likely willing to be a tenant short term in CTC before downtown is built. There were no prospects of a new arena in Atlanta.

Afterwards, Melnyk would have a near empty building which he can sell to local developers for new use.

 

[NorthCoast]

Some simple thoughts on the subject:

Legally they can't stop him. He's owned the team well beyond the 7-year clause, if that even exists in his purchase contract. He owns the CTC, so there is nothing in a lease there binding him. So, let's say he moves:

If he tries to move to Houston:
Fertitta apparently, from recent news about his reaction to luxury tax in the NBA, is not an overly-wealthy man. It's unlikely that Melnyk would get anything favorable in the way of a lease, leaving him subject to game night revenues only. I would think it unlikely that Fertitta would even share Naming Rights. So, on the financial balance, this doesn't look like a good move.

If he tries to move to Hamilton:
Well, at least there is a place to play. I suppose ticket prices would be sky high. And, I suppose he could negotiate something from the increased sponsorship and Naming Rights. But, the arena is probably not going to be viable for long without serious cash involved, so again i don't see this as a really good move.

If he tries to move to Quebec:
Here is where things are complicated, and positive in many ways. The situation in Quebec for Quebecor, who has the operating rights to the arena is that:
#1- Quebecor is a publicly traded company, and as such may not have a way to put up the cash necessary to purchase a team.
#2 - Quebecor is a media company, and have the operating rights, but are currently, from reports, losing money on that deal.
#3 - Quebecor, as a media company in Quebec, would see their value absolutely sky-rocket if there were an NHL team playing there, because of the rabid nature of Quebec fans toward NHL.
For these reasons, there is an argument to be made that Quebecor, as a company, would be MORE profitable with a team playing in the Centre Videotron, even if they had to make some concessions to the team in the matters of sponsorship and Naming Rights.

The team, under Melnyk, would have this:
#1 - A huge local fan base, very rabid, which I suppose could be killed, but that would take a lot of time in Quebec.
#2 - Because of that, the team would function better financially in Quebec than they could in Ottawa.
#3 - No need for investing cash into an arena, because the current one there is state of the art.

Now, I'm not predicting anything. Nothing at all. But, I see Quebec as the ONE AND ONLY possibility for a relocation under present ownership, simply because the operators of the arena in Quebec are the only ones anywhere whose own business would profit from the presence of a team.

Think about it:
In Kansas City, you will have to pay rent, in a new market, and the rent will be somewhat high, because the city is losing revenue booking you there.
In Houston, same thing applies, except that now it's Fertitta who has 41 nights he can't book a concert of something. He loses money because of that.
In Hamilton, the arena costs are going to be prohibitive for Melnyk.

But, in Quebec, and only in Quebec, you have a situation where the operator might WELCOME a team, because of how it would affect their other business.

That alone makes it intriguing.

Setting aside the fact the Melnyk has said he will never play in someone else arena.

I don't see how the lease in QC would be any more favorable than the lease Devcore would offer considering how much the NHL team makes Lebreton more viable as a project.

I also don't buy that the QC market/fanbase is anywhere near better than Ottawa and probably worse economically if you set aside how Melnyk has poisoned the market. 1.4 pop vs 820, GDP is almost double.

Plus the city is just as full of hockey fans as QC. Besides the sens, the region supports two major junior teams, has hosted one of the most financially successful world juniors, host the largest annual hockey tournament in the world, etc. etc. Ottawa is as viable a market as any other team in the bottom 1/3 of the NHL. So let's be clear that this would be purely of benefit to Melnyk alone. This is not a situation where the team has to move to stay viable.

As such, I simply don't see how moving from Ottawa to QC is better for the NHL, other NHL owners, NHL players, NHL sponsors, etc. etc. because a Melnyk owned team in QC won't generate as much HRR as in Ottawa.

In fact, I think it's pretty clear that Melnyk would be better off than just staying in Kanata or leasing in Ottawa, but regardless...I find it hard to believe that the NHL would choose QC over Ottawa as a market, nevermind a new Ottawa owner in Lebreton over Melnyk leasing in QC... especially going into a lockout. What are they going to tell the players? We need more money, but we let one of our owners move to a city with less money for the general pool just so that he could make a little bit more money...but we're still in this together.


And the other owners do have control. It's called relocation fees. The NHL clearly showed that they can fix the deck on relocation fee amounts during the Balsillie episode. So how much more do you think Melnyk can personally make in QC over say the next 10-20 years? Because guess what...that's the amount the league will ask for plus, plus for the aggravation.

But hey, maybe I'm wrong and everyone will cater to what Melnyk wants. He's such a lovable guy after all.

 

[LadyStanley]

NHL does have control in that they have to set a schedule BASED ON BUILDING AVAILABILITY. So, they cannot set a schedule for Ottawa if the games will be played in QC.

There's also the issue of territory fee due the league for relocation. (Jets move from Atlanta involved price of franchise AND new territory fee.)

 

[Gil Gunderson]

The NHL could set a relocation fee.

This is from 2009, when value was significantly lower.

Coyotes' relocation fee as much as $195M | CBC Sports

 

[SunDancer]

NHL does have control in that they have to set a schedule BASED ON BUILDING AVAILABILITY. So, they cannot set a schedule for Ottawa if the games will be played in QC.

There's also the issue of territory fee due the league for relocation. (Jets move from Atlanta involved price of franchise AND new territory fee.)

This is an interesting question and I wonder where the league stands on Melnyk. It's been clear in the past that they've been unhappy with him and Bettman's recent comments on the situation have been curious. It's possible the NHL might be willing to sacrifice Ottawa and face all the upheaval and negative press of a relocation but it would have to be for an attractive location in the US. Quebec City doesn't offer the NHL anything that Ottawa doesn't already.

 

[Centrum Hockey]

This is an interesting question and I wonder where the league stands on Melnyk. It's been clear in the past that they've been unhappy with him and Bettman's recent comments on the situation have been curious. It's possible the NHL might be willing to sacrifice Ottawa and face all the upheaval and negative press of a relocation but it would have to be for an attractive location in the US. Quebec City doesn't offer the NHL anything that Ottawa doesn't already.

The Houston nba owner does not seem to be that rich he did not want to pay a player 4.3 million no wonder why he won’t bite at any nhl team

 

[Gil Gunderson]

One thing about that plan I don't get is...why would he go through all the hurdles and expenses of relocating (which could possibly up to $200 mil in fees) then sell to a QC owner when he could just make more of a profit by selling it locally in Ottawa?

He always refused to even have a partner owning the team.

 

[MNNumbers]

So far, I haven't seen where DevCore is willing to build an arena and rent it to Melnyk. They are saying they will leave room for one. That's a totally different thing.

Melnyk's choices seem to be.
#1 Stay in Kanata, and lose money big time because everyone in Ottawa hates him.

#2 Somehow invest in a new arena in Ottawa, which he doesn't seem to have funds to do.

#3 Sell the team or part thereof to local interests, leading to a new arena

#4 Keep ownership and relocate somewhere.

I know that Ottawa and QC are parallel markets in a vacuum. But with Melnyk as owner, that is no longer true. Ottawa hates him, but QC, at least initially, would welcome a team

And this is why it makes great theater. No one knows what might happen.

 

[Tawnos]

would the league really want to use its best turnkey landing spot right now? ottawa is certainly not the only struggling eastern franchise, notwithstanding certain restrictive leases elsewhere.

Just as a thing, but if the Senators move to Quebec, then Ottawa takes QC’s place as the best turnkey landing spot.

There’s a valid perception out there that Ottawa’s issues are Melnyk’s fault more than the market’s.

 

[Tawnos]

The NHL could set a relocation fee.

This is from 2009, when value was significantly lower.

Coyotes' relocation fee as much as $195M | CBC Sports

The relocation fee cited in that article is set as the difference between the franchise value in place and the projected franchise value if relocated. The franchise value difference between Ottawa and QC is bound to be pretty small.

In fact, it might be in negative territory.

 

[mikelvl]

Sorry, but this is absolutely blowing smoke. Bettman and Jeremy Jacobs will never allow Ottawa to relocate to Quebec City without, first finding a buyer to keep the team in Ottawa, and I've heard there are willing buyers out there. No way this will ever happen.

And Minnesota moving to Dallas? That is EXACTLY what the league wanted back then, Sun Belt expansion. If Norm Green tried to move the North Stars to Hamilton, Ontario, I would have NEVER happened.

Bettman and Jacobs ALWAYS get what they want.

Non story here.

 

[MNNumbers]

Sorry, but this is absolutely blowing smoke. Bettman and Jeremy Jacobs will never allow Ottawa to relocate to Quebec City without, first finding a buyer to keep the team in Ottawa, and I've heard there are willing buyers out there. No way this will ever happen.

This is exactly the point. What legal means do they to stop it?

Personally, I think that the BOG would strongly encourage a local sale. But, because Melnyk owns the arena as well, every solution is complicated.

 

[mikelvl]

This is exactly the point. What legal means do they to stop it?

Personally, I think that the BOG would strongly encourage a local sale. But, because Melnyk owns the arena as well, every solution is complicated.

I would bet that the BOG would do just about anything to get another owner for the Sens except relocation. I just can't picture Melnyk going against Bettman and Co. I don't think he will cross that divide.

 

[Gil Gunderson]

So far, I haven't seen where DevCore is willing to build an arena and rent it to Melnyk. They are saying they will leave room for one. That's a totally different thing.

Melnyk's choices seem to be.
#1 Stay in Kanata, and lose money big time because everyone in Ottawa hates him.

#2 Somehow invest in a new arena in Ottawa, which he doesn't seem to have funds to do.

#3 Sell the team or part thereof to local interests, leading to a new arena

#4 Keep ownership and relocate somewhere.

I know that Ottawa and QC are parallel markets in a vacuum. But with Melnyk as owner, that is no longer true. Ottawa hates him, but QC, at least initially, would welcome a team

And this is why it makes great theater. No one knows what might happen.

I recall hearing the Devcore president on the radio last week say that one of the options would be for them to build the arena and have Melnyk’s Sens as a tenant. Melnyk doesn’t want to play in someone else’s arena so I’m not sure how realistic that is.

 

[Centrum Hockey]

Sorry, but this is absolutely blowing smoke. Bettman and Jeremy Jacobs will never allow Ottawa to relocate to Quebec City without, first finding a buyer to keep the team in Ottawa, and I've heard there are willing buyers out there. No way this will ever happen.

And Minnesota moving to Dallas? That is EXACTLY what the league wanted back then, Sun Belt expansion. If Norm Green tried to move the North Stars to Hamilton, Ontario, I would have NEVER happened.

Bettman and Jacobs ALWAYS get what they want.

Non story here.

Why whould any commissioner want to be the one on the job when a hockey franchise failed in the most hockey mad state in the us

 

[gstommylee]

The Houston nba owner does not seem to be that rich he did not want to pay a player 4.3 million no wonder why he won’t bite at any nhl team

That better be sarcasm cause he paid 2.2b for the rockets.

 

[gstommylee]

I would bet that the BOG would do just about anything to get another owner for the Sens except relocation. I just can't picture Melnyk going against Bettman and Co. I don't think he will cross that divide.

How can the 31 owners can really do other than get the league sued in Canadian courts. You can't really force an owner out unless the owner committed unethically/criminal acts. Not going to happen. They aren't going to do anything that might end up being done on themselves later.