News Article: Globe and Mail article slams Melynk

[Do Make Say Think]

The Sens debt isn't massive in terms of it appraised value (Forbes).

With the NHL's new line of credit close to being introduced, the cost of the loans owned by NHL owners is about to get considerably cheaper to service as well.

In addition Melnyk will see increased revenues this year as the new TV deals are now kicking in.

I would guess the Senators are in position to add $10 - $12M in salaries for next season and still make a small profit.

If this wasn't the case I doubt Melnyk would even consider investing in a new arena on the Flats.

http://www.theglobeandmail.com/spor...edit-ruled-offside-in-canada/article22547432/

That new line of credit isn't going to be helping us it seems

 

[Vesa Awesaka]

http://www.bing.com/search?q=globe+...of+credit+melnyk&src=IE-SearchBox&FORM=IE8SRC

That new line of credit isn't going to be helping us it seems

Melnyk reworked 150 million dollars in loans at above 10 percent interest...

that does not seems smart or good

Arizona apparently gets its loans at a much cheaper interest rate

Not sure if i understood the article correctly though

Is reworking the same as restructuring ?

 

[The Lewler]

Melnyk reworked 150 million dollars in loans at above 10 percent interest...

that does not seems smart or good

Arizona apparently gets its loans at a much cheaper interest rate

No, it's not great, and yes, that's him 'restructuring' his debt.

And yes, the article states that basically all US NHL teams have access to a 2 billion dollar LOC, secured by among other things, Television revenue, operating at somewhere in the area of 2% interest rate. So that's the rate Arizona would be operating off of.

They didn't however, make sure it complied with Canadian regulations, so none of the CDN teams can use that LOC, hence Melnyk's bad loan interest rates.

NHL typical.

 

[Backpass]

We have the 5th cheapest tickets in the league i believe. Sens tickets are strangely low but even then has it led to more people in the seats?

My point had nothing to do with the price it self, but rather with the fact that hockey is a business and when we attend a game, we pay for to see a product. Why should I pay the same amont to see a product of lesser quality where the owner have decided to pocket the money and old back on his spending instead of spending.

At the beginning of the year Melnyk said that the team would be competitive and if they get a chance to make the play-off he would spend more money. Why didn't he spend his money upfront to give a better chance to the team the make the play-off.

 

[Do Make Say Think]

My point had nothing to do with the price it self, but rather with the fact that hockey is a business and when we attend a game, we pay for to see a product. Why should I pay the same amont to see a product of lesser quality where the owner have decided to pocket the money and old back on his spending instead of spending.

You don't have to pay if that's how you feel, that's the beauty of it!

Interesting that you choose to not pay because you think the owner is pocketing the money however. Clearly the only reason we are not spending more is to allow Melnyk to make more money, that's the only possible explanation

At the beginning of the year Melnyk said that the team would be competitive and if they get a chance to make the play-off he would spend more money. Why didn't he spend his money upfront to give a better chance to the team the make the play-off.

Because we're not able to sustain spending to the cap for very long

So if you're going to go ahead and start spending more you want to have a good feeling about it rather than "well let's hope these bloated contracts we just signed/acquired work out and that we make the playoffs!"

 

[StefanW]

Because we're not able to sustain spending to the cap for very long

So if you're going to go ahead and start spending more you want to have a good feeling about it rather than "well let's hope these bloated contracts we just signed/acquired work out and that we make the playoffs!"

And yet nobody in the history of these Melnyk/budget threads suggested spending to the cap. Or taking on bloated contracts, for that matter.

 

[Do Make Say Think]

And yet nobody in the history of these Melnyk/budget threads suggested spending to the cap. Or taking on bloated contracts, for that matter.

We will likely be spending around 60-65 million dollars on the roster next year with extensions and RFA signings

That's pretty damn close to the cap (which could be as low as 68 according to some should the PA not use the escalator)

Then he said "why didn't he spend to start the year?" to which I very well could reply "on what? on who? in echange for?". Saying that the owner is lining up his pockets rather than spending and that the lack of spending to start the year is proof of that is about as ridiculous as taking on bloating contracts which was my point

We both agree Stefan: the notion that you spend once the team proves it "deserves" it is pretty dumb, but spending for the sake of it isn't much better.

 

[Filatov2Kovalev2Bonk]

That editor's job is to make Toronto feel good about themselves

Everything the G&M does is with Toronto in mind, it's pathetic. Not even the National Post is that bad

Nope. Mirtle is quite critical of the Leafs and so is Cathal Kelly.
No problem with Simpson's article in these parts, it's a refreshing change from the bootlicking we get from local media and Sens blogs.
This team has not made any progress under Murray and Melnyk and the budget can only be blamed for so much.

At some point Murray needs to **** or get off the pot and supplement the youth with veterans for a deep playoff run. When that will happen, or even if Murray wishes that to happen someday, is a mystery.

 

[StefanW]

We will likely be spending around 60-65 million dollars on the roster next year with extensions and RFA signings

That's pretty damn close to the cap (which could be as low as 68 according to some should the PA not use the escalator)

Then he said "why didn't he spend to start the year?" to which I very well could reply "on what? on who? in echange for?". Saying that the owner is lining up his pockets rather than spending and that the lack of spending to start the year is proof of that is about as ridiculous as taking on bloating contracts which was my point

We both agree Stefan: the notion that you spend once the team proves it "deserves" it is pretty dumb, but spending for the sake of it isn't much better.

Yup. I think this breakdown of where the cap could end up is pretty decent:

Bettman did offer a rough idea. For example, if the Canadian dollar is at $0.82 against the U.S. dollar, the cap ceiling would be $72.2 million. If the loonie hovers around $0.80, roughly where it started on Thursday morning, we could see a ceiling around $71.6 million.

Both of those numbers would be well above this season’s cap of $69 million, but they are subject to further revision.

-taken from http://www.si.com/nhl/2015/01/29/fa...-will-mean-salary-cap-headaches-for-NHL-teams

Of course all of it really depends on whether the PA uses the escalator, as you point out.

As far as Melnyk is concerned, it really comes down to trust. Some people trust what he has to say, others do not. I personally try to avoid having a vested interest either way. I'm a "show me" kind of guy, and if he spends more next year to keep the young core intact I will celebrate with some beer and chicken wings. However, I don't assume this will happen just because he says it will. The team could just as easily peddle away a couple of vets at the deadline, and then trade away an RFA who does not want to take the usual hometown discount. We'll see.

 

[Holdurbreathe]

Melnyk reworked 150 million dollars in loans at above 10 percent interest...

that does not seems smart or good

Arizona apparently gets its loans at a much cheaper interest rate

Not sure if i understood the article correctly though

Is reworking the same as restructuring ?

In the case of Melnyk, reworking meant finding new lenders.

Synopisis

Melnyk had been negotiating a new loan to cover the team’s $130-million debt held by a syndicate of eight banks including Scotiabank and CIT Group of New York.

The loan expired at year-end 2011 and had been operating under a series of extensions, with appropriate financial penalties applied. Melnyk was being forced to cover millions of dollars in extra debt interest payments until he arrange for new lenders.

This re-financing was necessary due to the fact some members of the syndicate had decided to get out of the business of lending to sports teams.

Melnyk was negotiating with a new group of banks and had been confident that fresh financing was within his grasp. But the arrangement was still tentative, and proved vulnerable to second-guessing and when rumours of an NHL lockout surfaced, a member of the proposed new syndicate dropped out.

When the lockout became fact, convincing another lender to fill the gap proved impossible.

Hence Melnyk was forced to continue with the original group of lenders, and their regime of extra fees.

It was only after the league returned to action, allowing the Senators to generate revenues from ticket sales, that Melnyk finally arranged $150 million in fresh financing. He signed a four-year deal in April 2013 with a pair of U.S. specialty funds.

FYI I can find no reference anywhere to the interest rate or fees being charged on the loan.

The NHL loan arrangement is being worked with CRA and is likely to be resolved in the near future. When that occurs the loan will obviously be transferred to Citi at a rate in the 2% range.

I also found an article (link below) that shows Melnyk was using his personal assets to secure the old Senators financing, and not as many have suggested taking from the team to finance other interests.

http://www.marketwired.com/press-release/eugene-melnyk-completes-150-million-refinancing-1779216.htm

 

[jason2020]

Yup. I think this breakdown of where the cap could end up is pretty decent:


-taken from http://www.si.com/nhl/2015/01/29/fa...-will-mean-salary-cap-headaches-for-NHL-teams

Of course all of it really depends on whether the PA uses the escalator, as you point out.

As far as Melnyk is concerned, it really comes down to trust. Some people trust what he has to say, others do not. I personally try to avoid having a vested interest either way. I'm a "show me" kind of guy, and if he spends more next year to keep the young core intact I will celebrate with some beer and chicken wings. However, I don't assume this will happen just because he says it will. The team could just as easily peddle away a couple of vets at the deadline, and then trade away an RFA who does not want to take the usual hometown discount. We'll see.

I get why some don't trust him but its those who said on a blog I did read this or that about the team so it must be true.

 

[Vesa Awesaka]

In the case of Melnyk, reworking meant finding new lenders.

Synopisis

Melnyk had been negotiating a new loan to cover the team’s $130-million debt held by a syndicate of eight banks including Scotiabank and CIT Group of New York.

The loan expired at year-end 2011 and had been operating under a series of extensions, with appropriate financial penalties applied. Melnyk was being forced to cover millions of dollars in extra debt interest payments until he arrange for new lenders.

This re-financing was necessary due to the fact some members of the syndicate had decided to get out of the business of lending to sports teams.

Melnyk was negotiating with a new group of banks and had been confident that fresh financing was within his grasp. But the arrangement was still tentative, and proved vulnerable to second-guessing and when rumours of an NHL lockout surfaced, a member of the proposed new syndicate dropped out.

When the lockout became fact, convincing another lender to fill the gap proved impossible.

Hence Melnyk was forced to continue with the original group of lenders, and their regime of extra fees.

It was only after the league returned to action, allowing the Senators to generate revenues from ticket sales, that Melnyk finally arranged $150 million in fresh financing. He signed a four-year deal in April 2013 with a pair of U.S. specialty funds.

FYI I can find no reference anywhere to the interest rate or fees being charged on the loan.

The NHL loan arrangement is being worked with CRA and is likely to be resolves in the near future. When that occurs the loan will obviously be transferred to Citi at a rate in the 2% range.

I also found an article (link below) that shows Melnyk was using his personal assets to secure the old Senators financing, and not as many have suggested taking from the team to finance other interests.

http://www.marketwired.com/press-release/eugene-melnyk-completes-150-million-refinancing-1779216.htm

Good on Melnyk then ? lol

 

[Holdurbreathe]

And yet nobody in the history of these Melnyk/budget threads suggested spending to the cap. Or taking on bloated contracts, for that matter.

Simply logic doesn't enter into the equation, nor do simple one liners answer complex questions.

 

[Holdurbreathe]

Good on Melnyk then ? lol

Nothing to do with good on Melnyk, everything to do with informing people with facts instead of supposition and story telling.

 

[Holdurbreathe]

I am sure it plays a huge factor.

Thing is, if you have so much debt that you can't run a decent franchise with 22.5M of operating income (without crying the blues everytime someone talks to you about the team), then you probably shouldn't own a team.

You do realize what operating income is right?

 

[Micklebot]

...The NHL loan arrangement is being worked with CRA and is likely to be resolved in the near future. When that occurs the loan will obviously be transferred to Citi at a rate in the 2% range.
...

Wow, that will be huge for the team if it is true they have about a 10% rate on 130 mil in debt. A 2% rate could mean around 10 mil less in costs associated with servicing the teams debt every year.

The NHL really put Canadian teams (well, MTL and Toronto not so much, really just the small market canadian teams) at a disadvantage when it botched the loan fund so that they could not take advantage.

 

[Holdurbreathe]

Wow, that will be huge for the team if it is true they have about a 10% rate on 130 mil in debt. A 2% rate could mean around 10 mil less in costs associated with servicing the teams debt every year.

The NHL really put Canadian teams (well, MTL and Toronto not so much, really just the small market canadian teams) at a disadvantage when it botched the loan fund so that they could not take advantage.

The NHL didn't do it homework for sure, and it will likely cost Melnyk millions (US).

 

[Vesa Awesaka]

The NHL didn't do it homework for sure, and it will likely cost Melnyk millions (US).

Hmmm... maybe we will get mcdavid

 

[jason2020]

If this is true what does everyone think it will mean such as higher ticket prices or will Melynk have to sell part of the team.

 

[FireMelnyk]

If this is true what does everyone think it will mean such as higher ticket prices or will Melynk have to sell part of the team.

Hopefully he sells at least 100% of the team.

 

[jason2020]

Hopefully he sells at least 100% of the team.

I think there are local groups such as Oseg that would love to buy the team now does EG want to any % of the team that's the big question.