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

[BattleBorn]

It reads the termination takes effect in 30 days of the notice.

Is that timeframe a formality? I can't see this getting resolved in 30 days so it's time to move forward.

My understanding is they will need to restart the process but I wonder if there is anyway to expedite it since allot of work has been done during the past many years?

In any case, I can't see how anyone can partner with Melnyk with him being tied up the ying yang in litigation.

If Devcore moves to the front of the line, it's best they build with room for an arena and don't build until they have an agreement with the Sens....or own them.

Likely a formality, a lot of contracts require a 30 day notice period for cancellation. There may be a period afterwards that will allow for a "cure" but I don't imagine they're restricted from starting the process for whatever's next.

 

[SunDancer]

It reads the termination takes effect in 30 days of the notice.

Is that timeframe a formality? I can't see this getting resolved in 30 days so it's time to move forward.

My understanding is they will need to restart the process but I wonder if there is anyway to expedite it since allot of work has been done during the past many years?

In any case, I can't see how anyone can partner with Melnyk with him being tied up the ying yang in litigation.

If Devcore moves to the front of the line, it's best they build with room for an arena and don't build until they have an agreement with the Sens....or own them.

I believe Devcore said as much in their statement immediately after Melnyk's falling out with Ruddy. Although it's not their priority, they said they would reserve an area for an arena and keep it vacant for a period of 5 years while they developed the the rest of the land. That would keep everyone's options open.

 

[SunDancer]

No matter who did what and who has the upper hand in the lawsuit, I think the main question is:

What's the future of the team now?

And, it certainly seems that, regardless of the outcome of the lawsuits, that RLB is not going to be building an arena, so the Sens won't be moving downtown in the immediate future....

What are the possibilities then?

1- NCC likely, if reports are true, has to go through an entirely new process and choose a new developer. That slows any downtown arena by 4 years or so, right?

2- That means the Sens continue to play in Kanata. Melnyk has been hinting about this recently as well.

What's the future there in Kanata?

If he goes broke, who are the buyers?

It sounds like the NCC might be worried about a lawsuit from either Ruddy or Melnyk if the NCC doesn't give them the opportunity to reorganize and resubmit a new bid with or without a new partner. The NCC's board will meet late next month and that should shed some light on what happens next.

Another factor which may be complicating matters is the NCC is replacing their CEO in February and he may want to start fresh. In any case, we're talking about a town that loves red tape, so this is probably years from getting resolved.

 

[NorthCoast]

No matter who did what and who has the upper hand in the lawsuit, I think the main question is:

What's the future of the team now?

And, it certainly seems that, regardless of the outcome of the lawsuits, that RLB is not going to be building an arena, so the Sens won't be moving downtown in the immediate future....

What are the possibilities then?

1- NCC likely, if reports are true, has to go through an entirely new process and choose a new developer. That slows any downtown arena by 4 years or so, right?

2- That means the Sens continue to play in Kanata. Melnyk has been hinting about this recently as well.

What's the future there in Kanata?

If he goes broke, who are the buyers?

Yeah, the suits haven't changed anything unless somehow they result in a significant (hundres of millions) moving from one side to the other.

This still comes down to a negotiation with the city/developer of choice and Melnyk OR a negotiation between Melnyk and a new buyer (Likely the Desmarais family, who would develop Lebreton with Devcor).

Other buyers. Possibly OSEC, maybe with another investor. I've heard "rumors" of a young billionaire from Ottawa that has stayed silent but who has interest if Melnyk actually put it up for sale.


The sad thing is that it probably can remain in Kanata for a while. Lebreton is happening because it was the right timing for the city/NCC. As much as people complain about the CTC location, the team has been profitable since 2014 when the new TV contracts kicked in. Not sure about this year, but even the lost attendance probably hasn't hurt that much and easily covered by reductions in the player budget. (Gate is 37% of rev. 80% of which comes the 100 section that is still selling well.)

In short, unless the debt and/or other financial problems Melnyk is having really do sink the team...I don't see why he can't survive out there until the building actually needs significant capital investment, which there are no reports that it does.

 

[DowntownBooster]

The sad thing is that it probably can remain in Kanata for a while. Lebreton is happening because it was the right timing for the city/NCC. As much as people complain about the CTC location, the team has been profitable since 2014 when the new TV contracts kicked in. Not sure about this year, but even the lost attendance probably hasn't hurt that much and easily covered by reductions in the player budget. (Gate is 37% of rev. 80% of which comes the 100 section that is still selling well.)

In short, unless the debt and/or other financial problems Melnyk is having really do sink the team...I don't see why he can't survive out there until the building actually needs significant capital investment, which there are no reports that it does.

Not sure why the people of Ottawa are so focused on what they don't have (a downtown arena) rather than what they do have (an NHL team). Rather than boycotting the Senators because of the owner, they should be supporting the players who are playing for the fans. The Leafs former owner Harold Ballard was no better than Eugene Melnyk (and may have been worse) but as bad as things got in Toronto, I don't ever recall the fans there deciding to boycott the Leafs in order to force the owner to sell the team. Karlsson may be gone but there's other good players in Ottawa that deserve the fans support.

 

[Gil Gunderson]

Not sure why the people of Ottawa are so focused on what they don't have (a downtown arena) rather than what they do have (an NHL team). Rather than boycotting the Senators because of the owner, they should be supporting the players who are playing for the fans. The Leafs former owner Harold Ballard was no better than Eugene Melnyk (and may have been worse) but as bad as things got in Toronto, I don't ever recall the fans there deciding to boycott the Leafs in order to force the owner to sell the team. Karlsson may be gone but there's other good players in Ottawa that deserve the fans support.

Not for long.

 

[NorthCoast]

Not sure why the people of Ottawa are so focused on what they don't have (a downtown arena) rather than what they do have (an NHL team). Rather than boycotting the Senators because of the owner, they should be supporting the players who are playing for the fans. The Leafs former owner Harold Ballard was no better than Eugene Melnyk (and may have been worse) but as bad as things got in Toronto, I don't ever recall the fans there deciding to boycott the Leafs in order to force the owner to sell the team. Karlsson may be gone but there's other good players in Ottawa that deserve the fans support.

I think if you look into the numbers that down-turn in attendance can be attributed to a lot more than Melnyk and that they are not really Ottawa specific factors.

Team is in a rebuild. Lot's of teams struggle fillign the seats when teams go through a rebuild. Look at Vancouver or Detriot the past couple years.

Team just traded their best player. How many hab fans boycotted the team after Subban?

Pricing strategy has been changing across the league. There's a thread in the business section on this. In short, 16k * $80 is better than 18k * $60. The new stadium is planned for 15-17k...when the sens used to sellout 18k-19k. Nothing to do with demand. Purely pricing strategy to max revenues instead of attendance.


You also can't compare a market like Toronto with 3-4x the number of hockey fans to Ottawa. It would be better to compare Ottawa to the Chicago Bill Wirtz era, in which fans did flea when the owner clearly was not interested in funding a competitive team.

But then see what happens with a change of ownership to the Rocky Wirtz era. Melnyk is performing all the same mistakes as Bill. Ottawa fans are frustrated because Rocky (new ownership) is seemingly waiting in the wings. Can you really blame them for that?

BTW: historically the only fanbases to spend more per capita than Ottawa on tickets are the Oilers (New stadium/McDavid) and the Jets (new team/cup contender).

 

[Dynamite Kid]

Not sure why the people of Ottawa are so focused on what they don't have (a downtown arena) rather than what they do have (an NHL team). Rather than boycotting the Senators because of the owner, they should be supporting the players who are playing for the fans. The Leafs former owner Harold Ballard was no better than Eugene Melnyk (and may have been worse) but as bad as things got in Toronto, I don't ever recall the fans there deciding to boycott the Leafs in order to force the owner to sell the team. Karlsson may be gone but there's other good players in Ottawa that deserve the fans support.

If their team moves it is only the fans fault. I tried to tell them this in another thread and I was given a MOD warning. If you don't support your team.............anything can happen.

 

[NorthCoast]

If their team moves it is only the fans fault. I tried to tell them this in another thread and I was given a MOD warning. If you don't support your team.............anything can happen.

I don't know about other markets, but I know Ottawa.

Revenue (pre-Melnyk chaos) = 125 mil.
Gate is 37% of Revenue = 46 mil.
70% of gate revenue comes from the first 20 seats, which have still sold (corp, rich folks, etc) = 32 mil, therefore 14m from average Joe fan.

Attendance is down 15% or 2.1 mil from avg. joe fan.

Karlsson contract was 6.5mil.


Of course if a fanbase cannot make a team profitable enough for an owner than it might move. But it has very little to do with the actions of the average joe fan and everything to do with another market just being that much more lucrative regardless of what the fans do. Fans can't double the size of their city in order for the TV contract to be twice as lucrative.

The team is profitable in Ottawa since the new TV contracts and the recent decline in attendance shouldn't change that. Is it enough to spend to the cap, no. But it can stay afloat. So any move of the team would be to a larger market and there is nothing fans in Ottawa can do about that.


BTW: Let me repeat in case you missed it. There are only a couple markets that spend significantly more per capita on gate than Ottawa fans. So what you are saying even if correct, is that Ottawa fans should spend 2-3x what fans in say Toronto have to spend in order to be good fans???

 

[LuckyPierre]

Make no mistake - what's hurting Ottawa attendance wise is the lack of corporate support, not your average 300-level fan.

Look around at the suites. Many sit empty, especially at the 100 level. Many more have been re-purposed (think the Hard Rock Cafe Bar, Fan Deck, etc) to take what would have been empty suites and generate improved fan connectivity and experience.

Sure, the average fan stopped buying tickets, but so did the average business with suites. These were businesses who admired the Cyril Leeder types within the organization, and who don't see an incentive to further support Melnyk down the rabbit hole.

 

[Korpse]

Rather than boycotting the Senators because of the owner, they should be supporting the players who are playing for the fans.

They've supported the players for many years, only to see them pushed away. Two of the franchises most beloved players have left the team in past 5 seasons and not on the prettiest of terms and it points back to the same guy. And those aren't the only two star players that have left one way or another there were several before and there will most likely be more to follow. The mess that the senators have become has Melnyk's finger prints all over it and I don't blame anyone for deciding to put their focus elsewhere. I'll always be a hockey fan but with the way things have gone, I wonder how soon it will be before I'm just a hockey fan.

I don't know how anyone can look at the past year in Ottawa and blame the fans.

The past year alone there has been...
-NHL 100 debacle
-Karlsson contract mess
-Hoffman/Karlsson off-ice incident
-Randy Lee harassment charge
-Lebreton Flats failure

And it doesn't seem like there's any end in sight to the negative news. It's something new every week, it's exhausting. You can go back to 2010 when Melnyk compared hockey players to his f***ing race horses and it's been a steady decline with the wheels falling off with the passing of Bryan Murray.

 

[LadyStanley]

31 Thoughts

Friedman with some insight

We’re missing one thing in Ottawa: the NHL’s true plan for the future. On a day where one of its owners was countersued for $1 billion, you’d think the league would have something to say. But, nada. Combine that with Commissioner Gary Bettman’s tight-lipped comments at the Board of Governors, and there’s only one conclusion — they have a path, they are confident in that path and they’ll let us know when they feel like it.

Melnyk’s response to soon-to-be-former-partner John Ruddy’s lawsuit was to offer up profits in exchange for Ruddy financing the arena. Melnyk was ridiculed for wanting a freebie, which certainly fits the narrative. But execs outside Ottawa scratched their heads at this strategy, because the arena is what you wish to control. It makes more money than the team. It was almost as if Melnyk was trying to prove Ruddy couldn’t build it either. There’s an endgame here, but it isn’t clear yet.

The saga continues

 

[Gil Gunderson]

 

[SunDancer]

If their team moves it is only the fans fault. I tried to tell them this in another thread and I was given a MOD warning. If you don't support your team.............anything can happen.

This idea that "if the team leaves, it's the fans' fault" is interesting. Maybe in isolation this argument makes sense but it's hard to apply to the Senators. If a pro cricket teams fails in Ottawa because its stadium is always empty, then sure, you could assume the market just isn't there. But that's not the case here. The CTC was consistently full in the past despite the location and the fortunes of the team on the ice. Something has changed.

Also, would you apply the same logic to other businesses? If a mismanaged restaurant or a poorly run night club fails, do you blame the clientele? Do you think Melnyk bears no responsibility for the state of this franchise?

 

[SunDancer]

There was a story that an offer to buy the Senators from Melnyk was refused not too long ago. Elliott Friedman reported that the offer was $400 million but it was unacceptable to the NHL.

“We also know that at a board of governors meeting this year, there was a sale brought up but it was not at a number that the NHL thought was even remotely acceptable. The maximum that it was, was $400 million and the word has got out that if that’s what you’re going to do for the Ottawa Senators, don’t even bother coming to the table."

Is it possible that Melnyk was willing to accept the offer, brought it to the BOG for approval but was denied by the League? Friedman's wording seems to imply that Melnyk is not controlling the sale. Does the NHL have the power to reject a sale based on price alone?

 

[Mightygoose]

That's a good question. If it was unacceptable to Melnyk, why does it even make it to the board? Understood the BOG ultimately approves any sale.

My other question, is this the offer reported in June or was this from December's meeting? After all, Melnyk was absent.

If it was June, this would be before the deal was coming apart so the franchise would be worth more than starting the LeBreton process over.

If the NCC decides to start over later this month, is 400 million or so more realistic?

 

[TheLegend]

That's a good question. If it was unacceptable to Melnyk, why does it even make it to the board? Understood the BOG ultimately approves any sale.

My other question, is this the offer reported in June or was this from December's meeting? After all, Melnyk was absent.

If it was June, this would be before the deal was coming apart so the franchise would be worth more than starting the LeBreton process over.

If the NCC decides to start over later this month, is 400 million or so more realistic?

Given the current price of expansion and the recent sale of Carolina I’d say $400M is too low.

The other thing to consider is (iirc) Melnyk also owns their current arena. If he wanted to get out then why unload the team but keep the arena, knowing it could be leaving in the near term??

 

[LeHab]

A few weeks ago Francois Gagnon from RDS reported a supposed take it or leave it offer by Desmarais led group made early in 2018 which Melnyk turned down.

$400m + cover current debt + commitment to invest 250m in the new Arena. Debt was at least $150m based on refinancing details reported a few months ago. If you add expected losses for the near future, that would make the value similar to what a new franchise.

Don't recall if current arena was within the scope.

 

[SunDancer]

That's a good question. If it was unacceptable to Melnyk, why does it even make it to the board? Understood the BOG ultimately approves any sale.

My other question, is this the offer reported in June or was this from December's meeting? After all, Melnyk was absent.

If it was June, this would be before the deal was coming apart so the franchise would be worth more than starting the LeBreton process over.

If the NCC decides to start over later this month, is 400 million or so more realistic?

Exactly. Something doesn't make sense. Either Melnyk did want to sell and brought it to the BOG for approval or for some reason he's lost control of the sale process and offers for the team are going to the BOG directly.

Could also be that Friedman just has bad info ... but I do remember lots of sale rumors in the summer.

 

[Mightygoose]

Exactly. Something doesn't make sense. Either Melnyk did want to sell and brought it to the BOG for approval or for some reason he's lost control of the sale process and offers for the team are going to the BOG directly.

Could also be that Friedman just has bad info ... but I do remember lots of sale rumors in the summer.

According to Freidman today in 31 thoughts, he mentions this lowball offer came up in the October BoG meeting. Link to site not posting properly.


28. Twenty years ago, I covered Toronto City Council when the NBA Raptors negotiated to buy Canada Post’s Toronto Delivery Building and turn it into what is now Scotiabank Arena. That was some seriously boring work, and I hoped never to do anything like that again. Now comes more multi-government excitement, Ottawa.
Here’s what we do know: the partnership between John Ruddy and Eugene Melnyk expires Jan. 24. What happens then is anyone’s guess. At some point last fall, Commissioner Bettman reminded the city of the importance of a downtown arena, and the message is understood. The key thing is that the NHL itself doesn’t consider this a dire situation, which means it has options it is choosing to keep to itself. At the October Board of Governors meeting, it was mentioned that a “below-market” offer to buy the team from Melnyk had been rejected. That’s $400 million at most, although some have suggested it was lower.

This would be a different offer than the one reported in June. No idea if it's the same group.

Also in thought 29 regarding Devcore's line of thinking that the NCC has to go to them automatically. Melnyk seems to think it has to start over and having his legal team look into it - potential lawsuit with NCC? With Melnyk nothing surprises me anymore. I don't think it will come to that as the odds are they start over again.

Though if Melnyk really is pushing the restart option - does he have another partner lined up?

 

[Masked]

Though if Melnyk really is pushing the restart option - does he have another partner lined up?

I suspect Melnyk, although this is only suspicion since Eugene is a madman, is pushing to restart to force the competing consortiums to bid higher for his franchise.

If the Trinity consortium buys the team, the project is a go because the problematic partner is gone and the NCC doesn't have to worry about restarting the process. If the Devcore consortium buys the team, Trinity might not be willing to compete again for the project without being able to include an arena in their next bid and the NCC will just go back to the second place option that now has an NHL team for their arena.

If the team is sold to one of those consortiums, or to a party who can quickly partner with one of the consortiums, before the NCC cancels their arrangement with Rendezvous Lebreton then the existing process can continue and shovels can hit the ground quickly. After that, it'll take time to sort everything out and the price will go down. Melnyk know his leverage is at an all time high right now and it won't won't be this high again until the NCC decides how they want to proceed if their arrangement with Trinity is finished.

 

[canuckfan75]

I do believe he will sell one day. He is just trying to hold out for as much money as possible.

 

[Mightygoose]

RendezVous LeBreton in mediation to try to salvage project

One last kick at the can before their agreement with the NCC terminates on January 19.

In short, what will break the deadlock here? Trinity agreeing to sell the LeBreton condos before 900 Albert? Agree to lump 900 Albert into the plan in exchange for the Sens paying rent?

I'd like to think some flexible thinking can happen with this opportunity right in each other's grasp.

The saga continues....

 

[Mightygoose]

NCC to consider extension for RendezVous LeBreton deal today | CBC News


Termination is effective this Saturday. Extension being asked to February 28.

NCC to have a teleconference today.

I think this will be gauge to how the board will feel if an agreement is reached.

 

[Mightygoose]

Per Sensinsider Twitter

CTV ottawa reporting the second group (DCDLS) is involved in the mediation for Lebreton. Desperate times calls for desperate measures

Also NCC has agreed to extend the termination deadline until February 28.

Sounds like push comes to shove, some serious progress is being made.