Trevor Shackles: DCDLS Ready to Move on LeBreton Deal if Melnyk Isn't Melnyk is running out of options

Yes, very positive news.

This is the huge money coming off the sidelines. Must be enormous relief for Melnyk. He now has an option for getting out. Enables NCC to add some time to process.

Wonder if Melnyk's $700m suit against Ruddy was in anticipation of this option? Ruddy has a deal with Melnyk. Melnyk cannot do a deal with another party unless they can resolve the RendezVous agreement.

Nobody should be shocked if the two proposal groups end up being integrated into a single development entity. This project is the future of Ottawa for the next 20 years. It also involves redevelopment of huge tracts of land immediately adjacent to LeBretton.

As everyone knows, I am not a fan of Melnyk. But, he is right on one point. The redevelopment jewell in the plan is LeBretton. But, the real profits are in the adjacent lands that are all owned by Melnyk's partners and competitors.

Doesn't it seem risky for another group to move in without owning hte team first?

And I don't say that as a point thinking Melnyk's going to sell. We know he's stubborn, he could just try and ride it out in Kanata, unless things are as bad as people say.

Doesn't it seem risky for another group to move in without owning hte team first?

And I don't say that as a point thinking Melnyk's going to sell. We know he's stubborn, he could just try and ride it out in Kanata, unless things are as bad as people say.
- david22

The guy had to refinance twice in a calendar year.......both times for upwards of 50 million. Things are ABSOLUTELY as bad as people say

Doesn't it seem risky for another group to move in without owning hte team first?

And I don't say that as a point thinking Melnyk's going to sell. We know he's stubborn, he could just try and ride it out in Kanata, unless things are as bad as people say.
- david22

The real power in this process are Melnyk's creditors. He has had to repeatedly borrow just to cover operating costs (player salaries and other operating expenses). At some point a creditor is going to say "no" to new lending. Even worse for Melnyk, an existing creditor can make a demand for immediate payment. As soon as that happens, Melnyk is at risk of losing control over the day to day business affairs of the team. The creditor can take direct action to ensure full and immediate payment of their debt. At that point, all the other creditors engage to protect their own interest.

Melnyk has wanted to find a solution (a partner) to ensure this never happens. But, nobody has signed on (probably because of the debt). The $700m lawsuit against Ruddy was probably a defensive action by Melnyk afraid that his creditors might pounce once the RendezVous partnership unravelled. He needs help in pulling his escape hatch.

This is a pretty good article on how a Canadian business can access short term financing when they run out of cash and credit.

http://www.cbj.ca/debtor_...possession_dip_financing/

It would be a Christmas miracle if Melnyk sells the team...

Then we can get Karlsson back on July 1st..

It would be a Christmas miracle if Melnyk sells the team...

Then we can get Karlsson back on July 1st..
- riceroni

Getting way too expensive for a team in rebuild mode. Karlsson $11m, Duchene $8.5m, Stone $8.5m, Ryan $7.25 Dzingle $5m, Boedeker $4.0m. More important players are asking for huge money coming off of their entry level deals. You cannot give big long term contracts to all your 28 year olds and not leave money for Chabot (next year) and the guys that are coming behind.

I don't think the Sens can afford to pay Karlsson $11m and Chabot $? (he will get as much or more than Nylander).

Do you want him back?
Looking more and more like we dodged an 11million dollar bullet. And when they say the room was broken it had nothing to with Karlsson v. Hoffman. And everything to do with Karl not being well liked by quite a few of them.

Karl also pretty much told the coach they weren't practicing. Rest is Best.

I dunno.....I like this new-look group going forward. He was great here. But the page has been turned.

Do you want him back?
Looking more and more like we dodged an 11million dollar bullet. And when they say the room was broken it had nothing to with Karlsson v. Hoffman. And everything to do with Karl not being well liked by quite a few of them.

Karl also pretty much told the coach they weren't practicing. Rest is Best.

I dunno.....I like this new-look group going forward. He was great here. But the page has been turned.
- Octavarium

Agree!

I don't understand how this is good news. Melnyk owns the team and the CTC. If some group builds a brand new arena at Lebreton without Melnyk, why would he turn the CTC into a graveyard and pay to rent the new arena from owner's who aren't him. He'll just say screw you and leave the team in Kanata.

Getting way too expensive for a team in rebuild mode. Karlsson $11m, Duchene $8.5m, Stone $8.5m, Ryan $7.25 Dzingle $5m, Boedeker $4.0m. More important players are asking for huge money coming off of their entry level deals. You cannot give big long term contracts to all your 28 year olds and not leave money for Chabot (next year) and the guys that are coming behind.

I don't think the Sens can afford to pay Karlsson $11m and Chabot $? (he will get as much or more than Nylander).
- spatso

Ok, I don't think the Sens or any team would pay karlsson $11M a season but I think $9.5 that's heavy on the bonuses would work.

Also, Stone and Duchene will probably both be around $8...

So Karlsson 7 years at $9.5M, Stone/Duchene 8 years at $8M

Bodeker can be traded for a 2nd rd pick plus a prospect... and you can trade guys like Pageau, Smith (if he has a good bounce back year), and Tierney and replace them all with younger and cheaper players.

Not really that big an issue.

Trading Bodeker and Tierney for prospects and picks that can move into the NHL in 2-3 years also helps offset the costs.

I don't understand how this is good news. Melnyk owns the team and the CTC. If some group builds a brand new arena at Lebreton without Melnyk, why would he turn the CTC into a graveyard and pay to rent the new arena from owner's who aren't him. He'll just say screw you and leave the team in Kanata.
- sgoodwin

It is no different than if you are a homeowner. If your house is worth $500,000 and your mortgage is $300,000 and you have a gross annual family income of $90,000 you are in good shape.

But, it is a completely different story, if the house is still worth $500,000 and your mortgage is $600,000 and your gross annual family income is $60,000. In this situation, you discover it is the mortgage holder that has almost complete control over the sale and disposition of the property. I think this is exactly the situation that Melnyk finds himself.

It would be a Christmas miracle if Melnyk sells the team...

Then we can get Karlsson back on July 1st..
- riceroni

it was just touched upon on the 31 thoughts podcast with Friedman...if this is a ploy to force Melynk to sell the team less than whats its worth, he said there is no way that the NHL or Bettman would let that happen.

Basically if the team is to be sold its going to be on Eugenes terms and thats a scary thought

So then Melnyk would have to pay rent on a new house, while still paying the mortgage on an old house that is derelict and producing no revenue and no one wants to buy. Thanks for the analogy, but I still don't get it. No one can force Melnyk to move the team to a brand new arena that he doesn't own.

It is no different than if you are a homeowner. If your house is worth $500,000 and your mortgage is $300,000 and you have a gross annual family income of $90,000 you are in good shape.

But, it is a completely different story, if the house is still worth $500,000 and your mortgage is $600,000 and your gross annual family income is $60,000. In this situation, you discover it is the mortgage holder that has almost complete control over the sale and disposition of the property. I think this is exactly the situation that Melnyk finds himself.
- spatso

it was just touched upon on the 31 thoughts podcast with Friedman...if this is a ploy to force Melynk to sell the team less than whats its worth, he said there is no way that the NHL or Bettman would let that happen.

Basically if the team is to be sold its going to be on Eugenes terms and thats a scary thought
- DDM-Coga

exactly this...."from my cold dead hands" he's not selling.

And Laliberte's announcement this morning didn't say they'd build the arena just that they'd leave space for an arena adjacent to the LRT station. The announcement this morning was just a prod for the NCC. Laliberte obviously doesn't realise how this group works. They'll just squash the whole process. Either start over or make some vague statement about reviewing the needs of Ottawans and Canadians with this unique historic parcel of land bla bla bla and they'll pile snow on it again.

exactly this...."from my cold dead hands" he's not selling.

And Laliberte's announcement this morning didn't say they'd build the arena just that they'd leave space for an arena adjacent to the LRT station. The announcement this morning was just a prod for the NCC. Laliberte obviously doesn't realise how this group works. They'll just squash the whole process. Either start over or make some vague statement about reviewing the needs of Ottawans and Canadians with this unique historic parcel of land bla bla bla and they'll pile snow on it again.
- Octavarium

Be patient, we are near the end of the Melnyk saga. Too many lawyers involved for this not to keep going. The idea people are trying to steal the team from Melnyk for less than ot is worth is just plain silly. How much debt has been loaded on the team and CTC is the only question that matters. I think a $700m is figure is reasonable. But, if Melnyk owes that much or more, you can see his problem.

I forget who mentioned it on Twitter last night, but it'd a good point.

If the NCC backs out of the Rendezvous agreement and sends it elsewhere, Ruddy stands to lose the potential $3-4b real estate opportunity. If Ruddy can prove that it's Melnyk who was the reason for losing the deal, that's a hefty lawsuit that would most certainly bankrupt Melnyk.

EDIT: Here it is
[url] https://twitter.com/CoolS...tatus/1069432644872617984

So then Melnyk would have to pay rent on a new house, while still paying the mortgage on an old house that is derelict and producing no revenue and no one wants to buy. Thanks for the analogy, but I still don't get it. No one can force Melnyk to move the team to a brand new arena that he doesn't own.
- sgoodwin

LeBretton is a $4b project. The assumption is the developers will recover their arena costs through the entire project. Melnyk’s fight with Ruddy is about Melnyk believing he should be included in the profits of the adjacent project (900 Albert). LeBretton plus Albert St. is nearly $8b in development. There are 3 other major developments within walking distance of the proposed arena. The LRT station for LeBretton has been built and now sits in the middle of an empty field.

I forget who mentioned it on Twitter last night, but it'd a good point.

If the NCC backs out of the Rendezvous agreement and sends it elsewhere, Ruddy stands to lose the potential $3-4b real estate opportunity. If Ruddy can prove that it's Melnyk who was the reason for losing the deal, that's a hefty lawsuit that would most certainly bankrupt Melnyk.

EDIT: Here it is

- Jordo[url] https://twitter.com/CoolS...tatus/1069432644872617984

Yes, you are right. Ruddy has already filed a counter suit against Melnyk.

it was just touched upon on the 31 thoughts podcast with Friedman...if this is a ploy to force Melynk to sell the team less than whats its worth, he said there is no way that the NHL or Bettman would let that happen.

Basically if the team is to be sold its going to be on Eugenes terms and thats a scary thought
- DDM-Coga

that's just common sense. The Athletic also published an article. There is no way he can put up with franchise devaluation. especially right now.

And I was wondering why his worship Jim had stuck his nose into it....turns out he was named by Melnyk in his filing.

Good lord.

that's just common sense. The Athletic also published an article. There is no way he can put up with franchise devaluation. especially right now.
- prock

Now, I know your being coy, you understand what is happening here. The idea of franchise valuation is merely a notional number at this point. So, make it $700m (Melnyk’s lawsuit). This number is only a guide. The real issue is how much of the $700m is used to discharge or assume debt. And, how much does Melnyk actually get to put in his pocket?

Do you want him back?
Looking more and more like we dodged an 11million dollar bullet. And when they say the room was broken it had nothing to with Karlsson v. Hoffman. And everything to do with Karl not being well liked by quite a few of them.

Karl also pretty much told the coach they weren't practicing. Rest is Best.

I dunno.....I like this new-look group going forward. He was great here. But the page has been turned.
- Octavarium

Sometimes more rest is best. Cross-sport comparison, but the Red Sox won the world series because they used rest and off-days to their advantage. Doesn't mean he's lazy or something

I am getting too excited. I need to calm down. I think the story that buyers need to pay a fair price for the franchise cuts both ways. I think it can also be interprted as saying the league thinks the franchise should be sold for a fair price.

We all agree. Set a fair price. THere are 2 buyer groups ready to close today. And, there is a rumoured 3 rd group involving european money.

The scary thing is what happens if Melnyk bankrupts the team before any of this goes down? He will not be personally touched of course because that's what rich fatcat wieners do. But what if the team goes into receivership or insolvency or something? Would the banks step in and run the team until it is sold?

And what about Stone and Duchene and all the players coming up for renewal. Is he just going to trade away any player than deserves more than a million and populate the team with children?