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Inside the NHL | Helene Elliott ON THE NHL

Bankruptcy Cases Could Grow

January 14, 2003|Helene Elliott

The Buffalo Sabres' bankruptcy filing Monday and the Ottawa Senators' insolvency aren't juicy topics. And with so much to enjoy this season, such as Mario Lemieux's pursuit of another scoring title, the rise of the Vancouver Canucks and the rebound of the Dallas Stars, it seems a shame to let finances dominate the news.

Tedious though these subjects might be, they can't be ignored. They're the elephants in the NHL's living room, probably the first of a giant herd.

About half a dozen other teams are for sale and have been for a while, among them the Mighty Ducks, and precious few buyers are on the horizon. Without an idea of what costs will be after the labor agreement expires in 2004, few investors seem eager to put their dollars into owning a hockey club. The Senators, Sabres and other clubs could be moved or folded.

The Senators filed for bankruptcy protection Thursday. Their majority owner, Rod Bryden, has until today to submit a bid to buy the club but has said he can't do it alone; New York billionaire Nelson Peltz is reported to be his financial angel but hasn't confirmed that. If Bryden bids, the Senators' creditors can reject his bid before Jan. 24 if they decide it doesn't provide enough repayment. After that, anyone can bid, but there's no line forming outside the Corel Centre.

The Sabres filed a petition for Chapter 11 bankruptcy Monday in Buffalo, N.Y., a procedure expected to facilitate a reorganization of the club's finances and its sale to Todd Berman and Mark Hamister. The Kings took the same step in September 1995 to accelerate the sale of the franchise from Joe Cohen and Jeffrey Sudikoff to current owners Philip Anschutz and Ed Roski Jr. It's a way to protect the prospective new owners from debts they don't expect. The Sabres have an estimated $238 million in debts and $68 million in assets.

NHL Commissioner Gary Bettman on Friday granted Berman and Hamister a second two-week extension to assemble financing for their proposed purchase, which they've said is conditional on receiving a $33-million aid package from the state of New York that includes refinancing a $22.9-million loan.

In sum, they're rearranging the deck chairs on the Titanic.

"It's the issue of the day, no question," Duck General Manager Bryan Murray said of the troubled clubs. "We are all concerned. We're just here filling a role for a while, but the game itself has to be looked after and franchises have to be looked after and we want it to be successful. What greater business to be involved in than the National Hockey League?

"We pay attention to what happens elsewhere, as much as we get wrapped up in our own situations. We all want Ottawa to survive and thrive and be in good shape so that when we step aside, the next group will have their turn."

A short-term rescue package put in place Thursday gave the Senator players money they were due Jan. 1. Those who had direct deposit got funds in their accounts Friday and others got paper checks when the team returned early Sunday from a four-game trip. Presumably, they were at the bank early Monday.

After Bryden hinted that the club's future depended on fans buying more tickets, fans responded by purchasing about 2,700 tickets over the weekend. As of Monday, fewer than 500 tickets remained for today's game against Tampa Bay. Prices were cut on some seats for the rest of January and February to stimulate sales.

Although the Sabres and Senators have problems unique to their situations, Murray sees enough common problems for everyone to be concerned.

"In our situation here, you have to win to fill the house," he said. "A lot of teams that don't make the playoffs have trouble doing that, and we've had a history now of a couple of years of not being in the playoffs. You have to battle financially to keep your payroll in order and to get your revenues up, so they somewhat match."

It's a battle that might be lost in Ottawa, Buffalo and elsewhere, ultimately changing the landscape of the NHL.

Big Success in Big D

Five prospective buyers have shown interest since Stars' owner Tom Hicks announced several months ago he would sell the club so he could devote more time and money to his baseball team, the Texas Rangers. So far none has made an offer.

In the meantime, everything is business as usual for the Stars, who are jockeying with the Vancouver Canucks for the West lead. The Stars haven't dumped salaries; in fact, they signed Bill Guerin to a five-year, $45-million free-agent contract last summer and increased their payroll from $57.3 million to $61.7 million.

"Mr. Hicks decided to sell after we had the team in place, so it's really been a nonissue," General Manager Doug Armstrong said. "The approach we try to take in among management and coaches is, if the team has success on the ice, whoever buys the team will, hopefully, want to keep it together. If it's done anything for me, personally, it's motivated us to have as much success as possible.

"I think winning sells in Dallas."

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