Confirmed with Link: Senators are for sale - and it’s a Gong Show

[Crosside]

is there anything new in here that a dum dum non-french speaking Ontarian can't see?

All I'm seeing is Andlauer and Desmarais may team up?

But wasn't it more hinted at that Andlauer was selling to Desmarais? or am I getting that mixed up?

Exactly lots of scenario discuss
1- Andlauer buy the Sens and keep his stack with the Habs ( not likely )
2- Desmarais buy stack of Andlauer from Habs ( probably Bell or Molson gonna buy )
3- Andlauer team up with Desmarais ( Desmarais don t want more than 25% )
Other thing interested his Melnyk daughter who gonna make the choice of the new owner

 

[Golden_Jet]

Exactly lots of scenario discuss
1- Andlauer buy the Sens and keep his stack with the Habs ( not likely )
2- Desmarais buy stack of Andlauer from Habs ( probably Bell or Molson gonna buy )
3- Andlauer team up with Desmarais ( Desmarais don t want more than 25% )
Other thing interested his Melnyk daughter who gonna make the choice of the new owner

I think Bettman decides, and not necessarily the highest bidder. Who they think will be best owner.

 

[Masked]

is the teams current debt included as part of the sales figures? Are the Senators... or... Capital sports management or whatever the group is called, not like... multiple hundreds of millions in debt?

The debts would obviously be paid off by sellers or the purchase price reduced for the new ownership to take on that debt. You don't buy a house and then take on the previous owner's mortgage.

Assen na yo!

 

[jhutter]

Exactly lots of scenario discuss
1- Andlauer buy the Sens and keep his stack with the Habs ( not likely )
2- Desmarais buy stack of Andlauer from Habs ( probably Bell or Molson gonna buy )
3- Andlauer team up with Desmarais ( Desmarais don t want more than 25% )
Other thing interested his Melnyk daughter who gonna make the choice of the new owner

I don't believe that an owner can have a stake in multiple teams.

 

[Loach]

I sure hope so...

~ $1B to purchase the team
~ $1B to build a new arena
~??? $M in team debt

We need a pretty heftily wealthy individual or group of individuals to make this thing work.

I thought the debt was included in the price of team. Mendes I think?

 

[bashbros32]

I thought the debt was included in the price of team. Mendes I think?

Yeah it slipped my mind when I wrote that... the point of the post still stands. We NEED a wealthy individual or group if we ever want to compete.

 

[Sun God Nika]

I think Bettman decides, and not necessarily the highest bidder. Who they think will be best owner.

Will Bettman pay the Melnyk's the difference if he selects a bidder who isn't the highest?

 

[Golden_Jet]

I would say no,

 

[Loach]

Yeah it slipped my mind when I wrote that... the point of the post still stands. We NEED a wealthy individual or group if we ever want to compete.

Can you imagine?! 750m for a team, 700 for the arena and 300m of debt. Can you say rebuild!!!?? Lmao!

 

[Cosmix]

Will Bettman pay the Melnyk's the difference if he selects a bidder who isn't the highest?

Obviously Bettman would not; he is the league commissioner, not an owner. As such he probably works the process of the sale with the team owner and prospective new owners, and then makes a recommendation to the NHL Board who makes the ":decision" to accept the sale and new owner, or not.

 

[CostPerRebuild]

I don't believe that an owner can have a stake in multiple teams.

My understanding is that you can have multiple small stakes in different teams.
I dont think you can be majority owner somewhere and minority elsewhere.

 

[Golden_Jet]

Can you imagine?! 750m for a team, 700 for the arena and 300m of debt. Can you say rebuild!!!?? Lmao!

All US. dollars

 

[Big Muddy]

Info about the Senators sale from the BoG meeting in Florida:

Insider Trading Ottawa Senators Sale NHL salary cap board of governor meetings | TSN

With the NHL's Board of Governor meetings wrapping up in Florida on Tuesday, Ryan Rishaug is joined by TSN Hockey Insiders Chris Johnston, Pierre LeBrun and Daren Dreger to discuss the latest on the sale of the Ottawa Senators, where the salary cap is headed and if there's any progress on the...

www.tsn.ca

Looks like the cap will most likely only rise by $1 m for next year as well.

 

[Loach]

All US. dollars

Lol!

 

[DrEasy]

The debts would obviously be paid off by sellers or the purchase price reduced for the new ownership to take on that debt. You don't buy a house and then take on the previous owner's mortgage.

Assen na yo!

But the buyer may need to borrow money to buy the team/house, so they might be leveraged too. I just hope the debt servicing by the new buyer won't be as crippling to the team as the current one.

 

[Tnuoc Alucard]

Exactly lots of scenario discuss
1- Andlauer buy the Sens and keep his stack with the Habs ( not likely )
2- Desmarais buy stack of Andlauer from Habs ( probably Bell or Molson gonna buy )
3- Andlauer team up with Desmarais ( Desmarais don t want more than 25% )
Other thing interested his Melnyk daughter who gonna make the choice of the new owner

pretty sure it’s Gary Bettman who chooses who the new owner will be, not the Melnyk sisters.

 

[GCK]

But the buyer may need to borrow money to buy the team/house, so they might be leveraged too. I just hope the debt servicing by the new buyer won't be as crippling to the team as the current one.

Nobody would buy the team without borrowing, it doesn’t make sense.

 

[Tuna99]

pretty sure it’s Gary Bettman who chooses who the new owner will be, not the Melnyk sisters.

The BOG does, the sisters could certainly lobby the BOG if they have a preferred bidder that's vetted. Say Group #1 offers $1 Billion but Bettman recommends group #2 who offered $900 million - could get the BOG to go over Bettman's head so they get more money.

 

[Bevans]

But the buyer may need to borrow money to buy the team/house, so they might be leveraged too. I just hope the debt servicing by the new buyer won't be as crippling to the team as the current one.

May, might?

100% owners will borrow money. You don't become a billionaire without debt.

 

[Micklebot]

May, might?

100% owners will borrow money. You don't become a billionaire without debt.

I mean, unless you've got that winning powerball ticket...

 

[Bevans]

I mean, unless you've got that winning powerball ticket...

Then you borrow even more.

 

[Big Muddy]

Then you borrow even more.

Warren Buffet is one person that warns against using debt as a way to get rich. He's one of those kind of wealthy guys. Businesses borrow money because the interest they pay is used as a write to bring their income down, hence lowering their taxes. Buffet mentioned that Berkshire Hathaway could have not paid taxes over the years had he done this, but that he did not because he didn't think it was correct from a moral perspective.

Update - First sentence was edited to better convey the point I was trying to make.

 

[Bevans]

Warren Buffet did not borrow money. He's one of those kind of wealthy guys. Businesses borrow money because the interest they pay is used as a write to bring their income down, hence lowering their taxes. Buffet mentioned that Berkshire Hathaway could have not paid taxes over the years had he done this, but that he did not because he didn't think it was correct from a moral perspective.

Warren Buffet and Berkshire Hathaway absolutely benefit from borrowing money.

 

[Big Muddy]

Warren Buffet and Berkshire Hathaway absolutely benefit from borrowing money.

I'm going by something he said himself at a lecture. He said this when he appeared with Bill Gates back at the time when he gave a lot of money to the Gates Foundation. He said that many/most business borrow money to cover operating costs & cash flow fluctuations because of the tax write offs. So, you'll have to take it up with him.

Another snippet I found on the inter web: "Warren Buffett is stating the basic principle that you do not need to use debt to get rich if you are intelligent. All debt does is increase your risk, while if you are a smart person, you are going to make a lot of money either way."

Also, "At the same time, however, Mr. Buffett has credited much of his success to the float generated by his insurance businesses at Berkshire which is a sort of free leverage. Additionally, his company and/or subsidiaries have also taken out long-term debt.".

Regarding avoiding bankruptcy which is why Buffet feels strongly about using debt leverage to get rich - "He does this at Berkshire by keeping a cash hoard of tens of billions of dollars to ensure that Berkshire can always meet its insurance and other obligations."

I'm going to rewrite my original OP so that I more accurately & better reflect the point I was trying to make.

 

[Cosmix]

But the buyer may need to borrow money to buy the team/house, so they might be leveraged too. I just hope the debt servicing by the new buyer won't be as crippling to the team as the current one.

Whether the company that owns the team provides all the capital or only a portion of it with the remainder being debt (bonds, preferred shares, whatever), the company still has to make a profit to pay the shareholders and debtors a return on their investments. Returns on debt are usually less than returns on capital; however returns on capital could be partially provided by capital appreciation of the value of the team over time rather than or annual dividend payments.