UPDATE 2/26 No more extensions in LeBreton mediation, Heritage minister says

[bert]

[MOD]

Yeah, it comes down to this:

NHL wants Ottawa at Lebreton because it would turn Ottawa from breakeven to a long-term profitable franchise.

City/NCC wants the team downtown because they can just give Lebreton to developers. It has to be something more exciting or city council will be voted out next election.

Devcore is rumored to have offered Melnyk 400-500 for the team already.
Melnyk wants 650 because of Lebreton opportunity and expansion values.
Devcore said fine, you go build the new area.
Melnyk failed because he doesn't have the cash to float the team if the revenues from the developments condo sales (which are paying for the arena) are slower than expected.
Melnyk still wants 650 or still thinks he can salvage Lebreton
Devcore says fine, we'll build it ourselves and then wait you out.

The NHL is truly stuck. Privately they would LOVE to replace Melnyk with Devcore. Devocre brings much more to the table as business entities and non of the sideshow Melnyk brings. But they have to support an existing owner.

A good sign in the short-term would be full radio silence from NHL. This would clearly indicate that they are at the point where they do not want to take sides and are waiting for the end-game to play out just like everyone else.

Bang on with the timelines and information thank you for summing it up. I think what people truly have to understand this is way bigger than purchasing an NHL team. Devcore is in this for the real estate deal and the opportunity to develop the giant parcel of land right downtown, where the new east west LRT and the north south LRT meet directly in the middle of it. I think from their business model they wouldnt want to buy the team right now anyway, they would likely want to develop Lebreton so there is more infrastructure built up before the arena and team arrives. As a sens fan its going to be a lot more losing and piss poor management for the foreseeable future however I am just happy that I know they aren't going to relocate. I can sleep easy knowing that a committed and qualified local buyer like Devcore at the table ready to buy whenever Melnyk is forced to do so.

 

[coladin]

There have been rumours of parties wanting to buy the team. Melnyk up to this point has been very adamant and crystal clear that not only will he not sell, but will pass the team to his daughters.

There are discrepancies posted in articles as to what exactly Melnyk's commitment is financially. In two separate articles it has been noted this is a 50-50 venture between both parties. 2B each. I have seen an article say 3.4B Ruddy and 600M Melnyk. Just reporting what is out there locally.

Whether that is a smokescreen or just bravado, well, people will have to draw their own conclusions. All numbers thrown out are pure speculation by the way.

Can he afford to stay in Ottawa may be his ploy to try and relocate the team rather than continue to take a bath on Ottawa. I don't foresee Melnyk taking a penny out of his pocket as far as relocation fees. The bidding war would take care of those costs as he looks for a sweetheart deal, which is definitely out there.

Can the NHL force him to sell to a local investor if there are better deals out there? I don't think so.

Ugly situation keeps getting uglier for Ottawa Senator fans.

 

[Mightygoose]

I guess it all depends on how close the out of market offers and a local one are. Also how many out of market buyers are realistically out there besides Quebec and Houston? The league would approve a sale in either case so if local offers are comparable, I can see the league going with that especially if an arena in Lebreton is still in the cards

If AZ can't be resolved and goes to Houston there's one less place for a bidding war to take place.

 

[NorthCoast]

I guess it all depends on how close the out of market offers and a local one are. Also how many out of market buyers are realistically out there besides Quebec and Houston? The league would approve a sale in either case so if local offers are comparable, I can see the league going with that especially if an arena in Lebreton is still in the cards

If AZ can't be resolved and goes to Houston there's one less place for a bidding war to take place.

Okay, beyond the relocation fee and other costs, the 3/4 BOG approval, the firestorm this would generate for the NHL in every small market, having to tell Quebec they are now 2nd behind Ottawa for the next relocation, allowing Melnyk into the US where he can now take advantage of NHL financing and live off other owners and a sweetheart lease creating another florida, potential need for divisional realignment, etc, etc.


There is another very real potential roadblock.

If there is an offer to keep the team in Ottawa, and the NHL ignores it so that Melnyk can move to a bigger market, then their might be a legitimate legal issue from the competition bureau because the whole argument to the bureau that it was okay to keep basillie out was grounded in trying to keep teams in there market.

Archived — NHL's ownership transfer and relocation policies reviewed by Competition Bureau - Competition Bureau Canada

Different because Melnyk is not selling? Maybe, maybe not in the eyes of the comp. bureau who may see any minority stake/new stadium partnership as anti-competitive to a Devcore bid.


As much as the owners stick up for one another. That's a lot of crap to go through just to keep what is generally considered to be one of the least wealthy and most negative (PR-wise) owners in the club vs what they would get with Devcore. Nevermind trusting him with one of the remaining large US markets that are yet to be tapped into and that future US TV growth may be dependent on.

 

[M.C.G. 31]

I really don’t see any scenario where relocation is approved when there’s a willing local buyer that has the money for the team and the downtown arena.

 

[Mightygoose]

Not concerned though disappointed in how it stands.
Not vialble in it's current form (backing Melnyk's position)

Though downtown arena would be nice, Melnyk feels he can make it work long term in CTC. It's a viable NHL building.

League will help any way it can to get a new arena.

No mention of Devcore....and not surprised at this

Behind closed doors..... wouldn't be surprised if it's a 'different message'.... Melnyk not at today's meeting.

 

[Centrum Hockey]

Okay, beyond the relocation fee and other costs, the 3/4 BOG approval, the firestorm this would generate for the NHL in every small market, having to tell Quebec they are now 2nd behind Ottawa for the next relocation, allowing Melnyk into the US where he can now take advantage of NHL financing and live off other owners and a sweetheart lease creating another florida, potential need for divisional realignment, etc, etc.


There is another very real potential roadblock.

If there is an offer to keep the team in Ottawa, and the NHL ignores it so that Melnyk can move to a bigger market, then their might be a legitimate legal issue from the competition bureau because the whole argument to the bureau that it was okay to keep basillie out was grounded in trying to keep teams in there market.

Archived — NHL's ownership transfer and relocation policies reviewed by Competition Bureau - Competition Bureau Canada

Different because Melnyk is not selling? Maybe, maybe not in the eyes of the comp. bureau who may see any minority stake/new stadium partnership as anti-competitive to a Devcore bid.


As much as the owners stick up for one another. That's a lot of crap to go through just to keep what is generally considered to be one of the least wealthy and most negative (PR-wise) owners in the club vs what they would get with Devcore. Nevermind trusting him with one of the remaining large US markets that are yet to be tapped into and that future US TV growth may be dependent on.

Leagues have the power to alter relocation rules when ever they want the NFL who ditched 3 separate markets in the past decade even admitted they are not bound by their own rules
Relocation bylaw is not binding for NFL owners

 

[SunDancer]

I really don’t see any scenario where relocation is approved when there’s a willing local buyer that has the money for the team and the downtown arena.

It depends if there's a local buyer that is willing to shell out the $650 million that NHL teams go for nowadays. Franchise values are paramount and there's no way anybody is getting a discount on Gary's watch.

 

[MNNumbers]

It depends if there's a local buyer that is willing to shell out the $650 million that NHL teams go for nowadays. Franchise values are paramount and there's no way anybody is getting a discount on Gary's watch.

I agree in premise, SunDancer. However, while the Carolina sale numbers are not precise, it does seem as if the franchise value in that sale was near 500M, not 650M. And, that was after the expansion fee to Seattle had been published. Whether Quebecor would have offered 50M more is a question we do not have the answer to....

But I guess my point is that I think the league would be okay with a 50M discount to keep the team in its present market.

Although in the particular case of Ottawa, I'm not sure the league really cares whether they are the Ottawa Senators or the Quebec Nordiques.

 

[Melrose Munch]

Okay, beyond the relocation fee and other costs, the 3/4 BOG approval, the firestorm this would generate for the NHL in every small market, having to tell Quebec they are now 2nd behind Ottawa for the next relocation, allowing Melnyk into the US where he can now take advantage of NHL financing and live off other owners and a sweetheart lease creating another florida, potential need for divisional realignment, etc, etc.


There is another very real potential roadblock.

If there is an offer to keep the team in Ottawa, and the NHL ignores it so that Melnyk can move to a bigger market, then their might be a legitimate legal issue from the competition bureau because the whole argument to the bureau that it was okay to keep basillie out was grounded in trying to keep teams in there market.

Archived — NHL's ownership transfer and relocation policies reviewed by Competition Bureau - Competition Bureau Canada

Different because Melnyk is not selling? Maybe, maybe not in the eyes of the comp. bureau who may see any minority stake/new stadium partnership as anti-competitive to a Devcore bid.


As much as the owners stick up for one another. That's a lot of crap to go through just to keep what is generally considered to be one of the least wealthy and most negative (PR-wise) owners in the club vs what they would get with Devcore. Nevermind trusting him with one of the remaining large US markets that are yet to be tapped into and that future US TV growth may be dependent on.

Quebec at least will be representing Atlantic Canada somewhat, even though they are smaller and have less corporate support. Ottawa has almost zero corporate support as well, and is in between Toronto and Montreal. I don't think a major sport comes back if the Sens move.

 

[SunDancer]

I agree in premise, SunDancer. However, while the Carolina sale numbers are not precise, it does seem as if the franchise value in that sale was near 500M, not 650M. And, that was after the expansion fee to Seattle had been published. Whether Quebecor would have offered 50M more is a question we do not have the answer to....

But I guess my point is that I think the league would be okay with a 50M discount to keep the team in its present market.

Although in the particular case of Ottawa, I'm not sure the league really cares whether they are the Ottawa Senators or the Quebec Nordiques.

The Carolina sale was reported at $550M and I think the league was comfortable with the timing of that price since it followed Vegas at $500M and it was prior to the official acceptance of the next expansion team at $650M. With Seattle now a done deal I have a tough time seeing Ottawa, or any other NHL team for that matter, being sold for less in the future.

 

[MNNumbers]

The Carolina sale was reported at $550M and I think the league was comfortable with the timing of that price since it followed Vegas at $500M and it was prior to the official acceptance of the next expansion team at $650M. With Seattle now a done deal I have a tough time seeing Ottawa, or any other NHL team for that matter, being sold for less in the future.

True. Some media reports said 550M. One source I just looked at said that he purchased 52% valued at 460M and has the rights to purchase the rest at a value of 550M. Overall, that's about 503M or so.

Forbes says enterprise value was 420.

However, for the sake of the NHL and its fixation on franchise values, what people believe was paid is far more important than what was actually paid.

 

[justafan22]

y-i-k-e-s

Arena no longer key to public support for LeBreton project, poll shows | CBC News

 

[GrantLemons]

The public is souring on Melnyk.

He's got his tenses way wrong. The public soured on Melnyk a long, long time ago.

 

[SunDancer]

Not concerned though disappointed in how it stands.
Not vialble in it's current form (backing Melnyk's position)

Though downtown arena would be nice, Melnyk feels he can make it work long term in CTC. It's a viable NHL building.

League will help any way it can to get a new arena.

No mention of Devcore....and not surprised at this

Behind closed doors..... wouldn't be surprised if it's a 'different message'.... Melnyk not at today's meeting.

Looks like Bettman is playing his cards very close to the chest here. He says he's disappointed but doesn't elaborate or say who/what's disappointing. Normally in these situations he's pretty quick to back up the owner and place the blame on the local politicians. Casually mentions Melnyk is not present at the meetings and no hint of how the league would like this resolved. He must understand just how damaging Melnyk is to this franchise.

 

[GrantLemons]

Looks like Bettman is playing his cards very close to the chest here. He says he's disappointed but doesn't elaborate or say who/what's disappointing. Normally in these situations he's pretty quick to back up the owner and place the blame on the local politicians. Casually mentions Melnyk is not present at the meetings and no hint of how the league would like this resolved. He must understand just how damaging Melnyk is to this franchise.

Pretty interesting. I know the league works for the owners, but Gary and the owners simply cannot be happy with the gong show Melnyk is running, and the fact he had exclusive rights to a new arena has has all but completely botched it.

Bill Daly's comment is also quite funny saying they'd defer the Mr. Melnyk's 'local expertise' when it comes to making it work in Kanata. His 'local expertise' is drawing like 12k per game and having billboards put up by fans asking for him to gtfo. You wonder if Daly's comment came with some subtle \s with it.

I just want the whole thing to end. I'm so tired of having to be concerned with off ice garbage. I can't even remember what it's like to be genuinely excited about the future of the team. I'm praying that with Seattle done, Gary and the league's focus turns to Ottawa and they force Melnyk to shit or get off the pot.

 

[NorthCoast]

Quebec at least will be representing Atlantic Canada somewhat, even though they are smaller and have less corporate support. Ottawa has almost zero corporate support as well, and is in between Toronto and Montreal. I don't think a major sport comes back if the Sens move.

So your argument is that it's possible for a team to move back to Quebec City because of their market conditions...but that a team would never move back to Ottawa because of their market conditions?

Do people know that since 2014 the sens have been profitable and ranked around 20th in league revenue, despite also carrying 150 mil in debt thanks to Melnyk, operating in a 25 year old building in the burbs, and being run by the most inept owner in the league. Will they lose money this year...they should, but they probably won't as Melnyk lowers the player budget and cuts other costs.

Team is not moving. Not from a profitable market with a new downtown stadium on the way and alternative ownership waiting to take over and keep the team in Ottawa.

 

[sawchuk1971]

speculation: bettman and NHL might intervene in ottawa arena crisis...

Bettman suggests NHL may intervene in Ottawa's arena situation

The NHL’s involvement in the past has yielded some positive results. With the case of the Pittsburgh Penguins, Bettman’s contributions were deemed “invaluable” in making PPG Paints Arena (formerly known as Consol Energy Center) a state of the art facility.

Dealing with the situation the Oilers recently stared down, Bettman aided in facilitating an agreement between the city of Edmonton and team owner Daryl Katz for the construction of Rogers Place. The new arena hosted its first season of Oilers hockey during the 2016-17 campaign and helped the team move on from Rexall Place (now known as Northlands Coliseum) which opened in 1974.

So, if the NHL commissioner’s track record is any indication of what may happen if the league steps in, it may not be a bad thing for Melnyk to accept Bettman’s help.

 

[Melrose Munch]

So your argument is that it's possible for a team to move back to Quebec City because of their market conditions...but that a team would never move back to Ottawa because of their market conditions?

Do people know that since 2014 the sens have been profitable and ranked around 20th in league revenue, despite also carrying 150 mil in debt thanks to Melnyk, operating in a 25 year old building in the burbs, and being run by the most inept owner in the league. Will they lose money this year...they should, but they probably won't as Melnyk lowers the player budget and cuts other costs.

Team is not moving. Not from a profitable market with a new downtown stadium on the way and alternative ownership waiting to take over and keep the team in Ottawa.

I don’t think it’s about profit. It’s about politics. Quebec will also have just Montreal against them. I’m not saying Ottawa will move to Quebec, I’m saying the NahL won’t hesitate to jettison the Sens to the USA. I think Quebec will be expansion as well, if the league gets off the 32 team horse.

 

[NorthCoast]

I don’t think it’s about profit. It’s about politics. Quebec will also have just Montreal against them. I’m not saying Ottawa will move to Quebec, I’m saying the NahL won’t hesitate to jettison the Sens to the USA. I think Quebec will be expansion as well, if the league gets off the 32 team horse.

Yeah, I see Quebec as sideways at best. I feel like they will keep them at bay as emergency relocation because that's the only way they get a team at a low enough price I think.

I still believe that the league would prefer expansion in the US over relocation. At the BOG in response to future expansion Bettman said that 32 is not a magic number, but they don't have any immediate plans beyond Seattle. My gut tells me that any US market that is such a no-brainer move for an Ottawa relocation would also be a hard to pass up expansion fee for the owners. And at the end of the day, it doesn't matter what Bettman wants, or the league office, or even the most powerful owners. All it takes for expansion is 3/4 of owners prioritizing 20-30 mil in free cash over whatever arguments can be made against expansion and we will have new teams.

 

[NorthCoast]

It’s more than rumours from HF sens.

Devcore partners want to buy Senators from Melnyk, source says

That’s just the tip of the iceberg. There’s more recent rumblings from notable journalists and insiders.

Not to mention that there was an actual offer last spring that was credible enough for Melnyk to bring it up at the last BOG meeting. Not confirmed that this was Devcore...but it either confirms Devocre, or confirms an additional player in the mix.

I am not a fan of the rumor-based facts either, but this one is well beyond the "if there's smoke there is fire" point.

 

[ottawah]

speculation: bettman and NHL might intervene in ottawa arena crisis...

Bettman suggests NHL may intervene in Ottawa's arena situation

But in each of those cases it was to garner public cash for the arena under threat of relocation. It has been pretty straight forward here, the City will not give the Senators the type of deal Edmonton got. Not even close. Katz had to front 25, the city something like 600M. With the big push for LRT here it is just not going to happen.

But even then whats left? The partnership is dead, the whole process is at a standstill and likely is to be for some time. About all Bettman has left is to find some way to pressure Melnyk to sell the team and his part of the partnership, but that is not likely to happen in the next several weeks.

Basically the ball is back to the NCC. They can:

1) Go back to RFP, that adds ~ 4 years to the timeframe.
2) Go to devcore, which has not committed to building an arena in the near future nor has any reason too.
3) Wait out this partnership lawsuit.
4)Try to strike a deal just with Ruddy

In any case those are all years away. I just do not see any angle Bettman can provide that is gonig to solve this, short of finding someone to finance the arena so that Melnyk will come back to the table, and finding some to fully finance an arena they do not own the team for seems very highly unlikely.

 

[NorthCoast]

But in each of those cases it was to garner public cash for the arena under threat of relocation. It has been pretty straight forward here, the City will not give the Senators the type of deal Edmonton got. Not even close. Katz had to front 25, the city something like 600M. With the big push for LRT here it is just not going to happen.

But even then whats left? The partnership is dead, the whole process is at a standstill and likely is to be for some time. About all Bettman has left is to find some way to pressure Melnyk to sell the team and his part of the partnership, but that is not likely to happen in the next several weeks.

Basically the ball is back to the NCC. They can:

1) Go back to RFP, that adds ~ 4 years to the timeframe.
2) Go to devcore, which has not committed to building an arena in the near future nor has any reason too.
3) Wait out this partnership lawsuit.
4)Try to strike a deal just with Ruddy

In any case those are all years away. I just do not see any angle Bettman can provide that is gonig to solve this, short of finding someone to finance the arena so that Melnyk will come back to the table, and finding some to fully finance an arena they do not own the team for seems very highly unlikely.

Except that whether its the city or NCC, they are giving the team money. It's just hidden in the discounted price of the land.

Unless you believe that the price they are offering Devcore or Melnyk, with all the design and oversight conditions to make something special, is the same as the price would be if you opened it up to any developer in the world to build whatever they want for max profit. Everyone knows the team is critical to the development, Melnyk is calling everyones bluff for more money, but at the same time he may not have enough capital of his own no matter how good a price he gets.

Knowing this the NHL has to be careful, because they don't really want to get involved, get a better price, and then have Melnyk bail again. Bettman may be obliged to, but you can bet this is the last owner he really wants to be stepping up to bat for and 50/50 it goes south on him, with more egg on his face.

 

[ottawah]

Except that whether its the city or NCC, they are giving the team money. It's just hidden in the discounted price of the land.

Unless you believe that the price they are offering Devcore or Melnyk, with all the design and oversight conditions to make something special, is the same as the price would be if you opened it up to any developer in the world to build whatever they want for max profit. Everyone knows the team is critical to the development, Melnyk is calling everyones bluff for more money, but at the same time he may not have enough capital of his own no matter how good a price he gets.

Knowing this the NHL has to be careful, because they don't really want to get involved, get a better price, and then have Melnyk bail again. Bettman may be obliged to, but you can bet this is the last owner he really wants to be stepping up to bat for and 50/50 it goes south on him, with more egg on his face.

It is NCC land, so thats hidden in the overall price yes, but does not reduce the 600M to build an arena. The federal government is not likely to commit dollars to this, and the city has been adamant it will not. So Melnyk has to find the 600M someplace.

Now I think you are incorrect when you say the arena is critical to this development. It is not. The RFP had no requirement to build an arena, although everyone did think it was a given. They can easily fill the land up with lots of buildings and create a great place without an arena. People will not be buying a condo there simply because an arena is there. In fact it may very well be a determent to selling condos. I'm almost surprised they allowed an arena to be built there given the history of the NCC and their reticence towards developing federal land with anything useful in mind.

Melnyk already has a good deal there, and is not likely to see any concessions from the NCC, city or Ruddy at this point. I think Bettman is well aware of that and likely has for some time. And the threat of relocation will not matter to the NCC or Ruddy, and I am unsure just how much Watson cares either. He'd probably be just as happy to let Devcore or whomever set up the area for an arena and let Melnyk suffer a slow death in the CTC and be forced to sell to downtown interests. Even if Melnyk decides to leave town with the team (thats an iffy proposition with Bettman adamant teams stay put where a buyer can be found), that would put Ottawa in a prime spot for an expansion team. That would not be guaranteed of course, but to Watson, with all the mud Melnyk has slung at the city the past 5 years, it might be worth the risk just to get him out of town.

 

[NorthCoast]

It is NCC land, so thats hidden in the overall price yes, but does not reduce the 600M to build an arena. The federal government is not likely to commit dollars to this, and the city has been adamant it will not. So Melnyk has to find the 600M someplace.

Now I think you are incorrect when you say the arena is critical to this development. It is not. The RFP had no requirement to build an arena, although everyone did think it was a given. They can easily fill the land up with lots of buildings and create a great place without an arena. People will not be buying a condo there simply because an arena is there. In fact it may very well be a determent to selling condos. I'm almost surprised they allowed an arena to be built there given the history of the NCC and their reticence towards developing federal land with anything useful in mind.

Melnyk already has a good deal there, and is not likely to see any concessions from the NCC, city or Ruddy at this point. I think Bettman is well aware of that and likely has for some time. And the threat of relocation will not matter to the NCC or Ruddy, and I am unsure just how much Watson cares either. He'd probably be just as happy to let Devcore or whomever set up the area for an arena and let Melnyk suffer a slow death in the CTC and be forced to sell to downtown interests. Even if Melnyk decides to leave town with the team (thats an iffy proposition with Bettman adamant teams stay put where a buyer can be found), that would put Ottawa in a prime spot for an expansion team. That would not be guaranteed of course, but to Watson, with all the mud Melnyk has slung at the city the past 5 years, it might be worth the risk just to get him out of town.

Technically your right. No arguments.

I just think at this point the city expects more than just condos and an aquarium or similar. Voters want the sens and developers want the sens. I think that along stalemates the process until a sale