Follow up on the Senators (***Corrected***)
It is being reported now that the Senators did not pay their players yesterday.TSN.ca and local papers are saying the players instead of a paycheque got a letter.Here is the update:
In lieu of payment, the players received a letter from majority owner Rod Bryden regarding the collapse of the franchise’s massive restructuring.
Sources told TSN that the players will be paid within two weeks or even over the next few days, but it is up to Bryden to find short-term financing to replace the tax shelter plan that was supposed to be in place for the team.
A Boston bank decided on Tuesday to not sign off on the plan, which was to be the first step in a two-prong approach to solidify the future of the economically challenged team. Part Two of the plan involved Long Island businessman Nelson Peltz investing heavily, but sources now suggest there is no telling if he’ll become an equity partner because his initial interest hinged on the shelter plan.
Sources also told TSN that the National Hockey League has no plans at this time to assume financial control or operation of the club since there is no imminent danger of not being able to operate for the 2002-2003 season.
There is, however, a dire need to acquire short-term refinancing that would allow the Senators to continue paying the players.
The team missed payroll Wednesday, sources said, because the dissolution of the tax shelter plan came late on Dec. 31.
Things are even worse than first reported and it seems they are getting bad fast.Ownership has to take the fall here as they should have seen this coming.They should have traded players with big contracts just to have saved the club instead of restructuring.It might be time to consider contracting a few teams just to keep the product(the NHL) viable.But that might not happen.One solution would be to sell the team to Hamilton, who should have gotten them in the first place.It doesn’t help that they have what might be the worst lease in the NHL(next to the Pens).Also there is the location of the arena.It is out in the middle of nowhere.And then there is the whole off ramp fiasco.And not to mention the taxes that is killing them.Where most(maybe all) American teams don’t pay taxes the Canadian clubs do.And lots of them.The Sens need a real break to stick around!!
I read an article posted on this site on the first that was supposed to be taken directly from the tsn website. later that night I was showing the article to a friend while on the tsn/nhl page and noticed some differences between what i read there and the version that was posted here. So i have copied the original and pasted it at the end of this post , i figured that everyone who didnt read the tsn version should get a chance to see that the figures as far as how much the sens owe, and how much they would be given werent as large as reported here, and that the line that stated that a source from the globe has learned that the sens will be out of money in a matter of weeks was not part of the original tsn article. anyways heres the real article.
“OTTAWA — A proposal to refinance the Ottawa Senators fell through, raising questions about the team’s financial health.
The deal was to involve the sale of the team by majority owner Rod Bryden to a limited partnership for $118.7 million.
The agreement would have given the Senators some badly needed cash and a better lease with the Corel Centre. The terms included injecting $26.7 million into the team and paying off a $9.1 million loan from the NHL.
“The transaction will not proceed,” Gordon Fox of Norfolk Capital Partners, which managed the limited partnership, told the Globe and Mail. “It’s a sad story for everyone.”
NHL spokesman Frank Brown confirmed to The Associated Press on Wednesday that the Senators were unable to complete the refinancing.
“We are working with the club to deal with that reality,” he said.
Bryden declined comment.
The website of TSN, a Canadian cable sports network, quoted unidentified sources as saying the players did not receive their paychecks as scheduled Wednesday. Instead, they got a letter from Bryden explaining the financial mess.
Senators spokesman Phil Legault refused comment when reached by the AP.
The Senators have lost money in each of the past three seasons, including $9.5 million in 2001-02. The team owes more than $101.7 million to a group of creditors and faces continuing cash shortfalls, documents show.
This is the second time in the last year that the refinancing has fallen apart. On Jan. 2, 2002, Bryden sold the team to the Norfolk partnership for $118.7 million. However, that deal fell apart when Covanta Energy Corp., a U.S. company that is a major lender to the team, filed for bankruptcy protection in April.
The Senators were formed in 1990 for a $50 million expansion fee and started play in 1992.”