Ottawa out of trouble?
While everybody called the Rangers/Penquins deal the end of hockey, why don’t we look at a possibility of new life for another team. The Ottawa Senators and their recent (pending) purchase by Rod Bryden.
Have a look
From the Globe and MailBryden went down to wire
By PAUL WALDIE AND CAMPBELL CLARK
Tuesday, February 11, 2003 – Page S1
OTTAWA — About 15 minutes before a news conference yesterday to announce a deal to save the Ottawa Senators, Rod Bryden took a call on his cellphone from a frantic colleague.
The news conference had to be called off, the caller said. A transfer number required to wire money from a bank account was missing. “Don’t have that press conference, because I haven’t got the wire transfer number yet,” the caller told Bryden as he walked toward a room packed with reporters.
Bryden laughed and kept walking.
“I’m assuming that they’ll find the transfer number,” Bryden said after finishing the conversation with his colleague. “This kind of thing has happened 50 times before in this deal, so I am just assuming we’ll find it and it will be done.”
The transfer number was found, and Bryden announced that after three weeks of negotiation he had struck a deal with creditors to acquire the National Hockey League club and the Corel Centre.
The deal still has to be approved by a court overseeing the Senators’ bankruptcy protection and could take two months to close.
Bryden provided few details yesterday, but according to sources familiar with the deal, it includes selling the franchise to a limited partnership for about $170-million. The partnership plans to sell units to investors and raise about $200-million. Investors would receive more than $60-million in total tax breaks, which are common in these sorts of deals, according to sources.
Ultimately, Bryden is expected to end up with control of the partnership and acquire the Corel Centre. In total, the club and the arena are expected to emerge with $50-million of debt, down from nearly $400-million today.
The deal is a testament to Bryden’s tenacity, sources close to the negotiations said. A similar proposal failed twice in the past year and creditors went into the latest discussions leery of success. Even some of Bryden’s advisers were uncertain the limited partnership arrangement could be revived for a third time after it collapsed on Dec. 31.
Bryden confirmed yesterday that completing the deal was far from certain. In fact, he said it nearly collapsed several times over the past few weeks.
“There were certainly many occasions when there was a point at which parties on opposite sides of the issues seem to see an issue as terribly important and be unable to agree,” Bryden said in an interview.
“There were several points at which one could have concluded that it just might not get resolved, and if it doesn’t, this transaction cannot proceed.”
The process began on Jan. 14 when Bryden announced he would submit a bid to buy the club and the arena. The club had filed for bankruptcy protection a few days earlier with more than $160-million of debt, including $60-million owed to the Canadian Imperial Bank of Commerce and FleetBoston Financial.
Bryden’s proposal is a reworked version of his limited partnership structure, this time with the backing of New York businessman Nelson Peltz.
Sources familiar with the negotiations said Bryden’s initial offer was too low for some creditors, and they balked. The creditors had a clear idea of what the club was worth and some also questioned reviving the partnership arrangement.
In the first two weeks of negotiation, it appeared Bryden’s proposal would not succeed. But Bryden persisted. He raised his price and modified the partnership arrangement.
Then Eugene Melnyk, a Toronto billionaire, expressed interest in buying the club for cash, and it appeared Bryden’s bid would die. Why turn down an all-cash offer from a billionaire when negotiations with Bryden seemed so complex, some observers suggested. But Bryden continued negotiating, and the creditors stuck with him.
The creditors “felt, at the end of the day, they were more in control with the Bryden deal,” one source said.
Last week, the creditors’ tone began to change. The deal looked workable as long as Bryden could assure the creditors all of the pieces would come together as planned.
Last Thursday as he watched the Senators tie the Philadelphia Flyers, Bryden got word that all the major issues had been resolved. Over the next few days, lawyers prepared final documents, and on Sunday, Bryden signed off on the final deal after an afternoon of skiing with his children at Mont-Tremblant, Que.
Yesterday, asked how he felt, he replied, “I’ll certainly be relieved to have it agreed [by the court].” He noted that there are still several hurdles to clear. “The time when I think we can truly celebrate is somewhere around in April,” he said.
Melnyk said yesterday that it was too early to congratulate Bryden, because if the deal falls apart, he is still ready to jump in.
“I think it’s important to wait and see,” Melnyk said. “I’ll play the role that I had stated earlier, that in the event that there is a threat that the team could be put up for auction, I would be there. I’d be really thrilled. It’s one of the things you daydream about. To own a team, a competitive team in a great Canadian city.”