Bryden bids for NHL’s Senators
Byline: Laura King in Toronto
In a widely expected play to save insolvent Ottawa Senators, the hockey club’s majority owner has teamed with a U.S. co-investor to repurchase the franchise out of bankruptcy.
Rod Bryden, who has shepherded the cash-strapped Senators through a decade of financial upheaval, filed a bid with the National Hockey League in New York on Tuesday but few details of the offer have been revealed.
Bryden said during a news conference Tuesday, Jan. 14, night in Ottawa that conditions of the offer stipulate that the partner not be named until creditors have accepted the bid. He said the co-investor is a corporation rather than an individual but would not elaborate.
“It is a very well-funded company that will not be scrambling about … to find money for its bid,” he said.
The offer price has also not been revealed, although reports have pegged the bid at between $80 million and $120 million for the team and its home arena, the Corel Centre.
Bryden owns the Corel Centre through Palladium Corp. But the arena is controlled by bankrupt U.S. power plant developer Covanta Energy Corp., which financed its construction in 1995.
New York financier Nelson Peltz had been rumored to be Bryden’s backer and has not denied interest in the team. Peltz heads Triarc Cos., which owns the Arby’s chain of restaurants.
On Jan. 8, Bryden said that he had been given an exclusive bidding period and had been in contact with a potential partner. This was after the Senators filed for protection under the Companies’ Creditors Arrangement Act, which is the Canadian equivalent of Chapter 11. Bryden admitted he could not afford to buy the team on his own and hoped to reach a deal with a deep-pocketed backer by Tuesday’s deadline.
The Senators owe creditors, including the NHL, the Canadian Imperial Bank of Commerce, FleetBoston Financial Corp. and Covanta, more than C$160 million ($103.9 million). In addition, the Corel Centre owes C$210 million to Covanta.
“We did submit a bid to that group (creditors),” Bryden said at the Corel Centre just before Tuesday night’s game against the Tampa Bay Lightning. “This is not a simple financial structure. The lenders were considering it when I left (New York).”
Bryden said he expects to hear as soon as Jan. 22 and no later than Jan. 24 whether creditors will approve the offer. However, the Globe and Mail reported Tuesday that unnamed sources said creditors are not prepared to accept a bid from Bryden, who has been unable to improve the team’s financial plight.
Should creditors reject Bryden’s bid, the Senators would be put up for auction. The team would likely be sold to the highest bidder and moved from the Canadian capital despite efforts by politicians and fans to keep it in Ottawa.
Bryden said that under terms of the offer, he would retain majority control in the team with the co-investor getting a significant equity stake. The Globe also said Tuesday that a second wealthy U.S. businessman has emerged as a potential bidder for the hockey franchise and is arranging legal counsel in Ontario.
Paul Allen, who owns the NFL’s Seattle Seahawks, the NBA’s Portland Trail Blazersand the Rose Garden Arena, has reportedly been trying for several years to bring an NHL team to Portland. The Portland Oregon Sports Authority, whose mandate is to lure professional sports teams to the U.S. Pacific Northwest, has said it would welcome the Senators.
CIBC and FleetBoston have provided C$13.7 million in debtor-in-possession financing to keep the Senators afloat until Feb. 10, but the team needs at least another C$10 million to finish the season.
The Senators organization was forced to file for bankruptcy protection after some creditors on Dec. 31 rejected a refinancing deal. The arrangement would have generated $42 million for the team in exchange for tax write-offs. An earlier deal to save the team fell apart in April after Covanta filed for Chapter 11.
The Senators’ franchise has one of the lowest payrolls in the NHL at only $30 million. Although the club is among the top three in the NHL this year, the Senators have struggled to fill seats for games. In fact, the team has borrowed money ever since the franchise was awarded to Ottawa in 1990.
Fans, however, have responded to a warning by Bryden to buy tickets or risk losing the team. Tuesday night’s game was expected to be a sellout.
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