Ottawa, I’m sorry.While fans in the midst of this disaster of a season, I’m sure the last thing that you want to read about is news that the NHL’s inability to
The Globe and Mail published an interesting read written by Dave Shoalts that outlined the financial implications for Canadian organizations created by the NHL’s failure to “ensure that the league’s now-$2-billion (U.S.) line of credit complied with Canadian government regulations when it was launched in October, 2014.”
According to Shoalts:
“None of the seven Canadian-based NHL teams can take advantage of the low-interest credit facility, which is managed by Citi, the vast New York-based financial services company.
This is not a huge blow for six of the Canadian teams, which are owned by individuals or corporations wealthy enough to borrow from alternative sources at favourable interest rates. But Melnyk has suffered financial reverses in recent years in his pharmaceutical businesses, and the Senators have carried significant debt ever since he bought the team in August, 2003.”
Forbes estimated that the Senators have an accumulated debt of $140-million (35 percent of their estimated $400-million franchise value) in their 2014 NHL franchise valuations.
After reworking the team’s debt in 2013, the complication for Melnyk lies in the fact the Canadian franchises cannot get the same kind of low-interest rates from this credit facility. In other words, the Senators Melnyk will have to continue to make debt payments with interest rates believed to be in excess of 10-percent.
When put in contrast with what American teams, the difference in interest rates between what Melnyk is paying now and what is available to teams like Arizona could mean a savings of $7 to $8-million per season — as Shoalts explained in his interview on TSN 1200.
Obviously, the Senators would be under no obligation to spend that money on player payroll, but they could! They could have spent that money that they could have saved had the NHL complied with Canadian regulations.
Instead, much like Ottawa’s promises repeated promises to spend sometime in the future, Senators fans will have to wait a few months for the NHL to resolve this issue so the Senators may or may not spend more money on payroll in time for the 2014-15 season.
If not the 2014-15 season, sometime in the future, but not the distant future… maybe.
Prince Added to AHL All-Star Game
Today the AHL announced a few changes to its rosters for their All-Star Game on Monday, January 26th and thanks to a few injuries, Binghamton’s Shane Prince was added to the Eastern Conference’s roster. Prince will join teammate Chris Wideman as Binghamton’s only representatives.
Phillips and Legwand Scratched Tonight
Curtis Lazar and Patrick Wiercioch are in. What’s interesting about Legwand’s benching is that it creates more of an opportunity for Mike Hoffman to play power play minutes. Huzzah!
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