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Good Fortune

Golisano Buys Sabres, Melnyk Senators to Save Beleaguered NHL Clubs

October 05, 2003|Associated Press

BUFFALO, N.Y. — Right when the outlook was bleakest for two NHL teams, along came B. Thomas Golisano and Eugene Melnyk to save the day.

Golisano bought the Buffalo Sabres, Melnyk the Ottawa Senators. Both clubs were on the verge of moving or even folding after filing for bankruptcy protection days apart in January.

Perhaps more important for hockey's future, the two self-made billionaires showed faith in the sport by investing in a league which reported nearly $300 million in losses last year. And on the horizon is a potentially lengthy labor dispute, because the NHL's collective bargaining agreement expires after the upcoming season.

Golisano, who ran unsuccessfully for governor of New York three times, places the Sabres' needs ahead of the league's. Still, he has some thoughts on what needs to be changed in the NHL.

Job No. 1: be more responsible when it comes to players' contracts.

"It appears that some of the issues that exist in the NHL were created by the owners," Golisano said. "They've allowed these salaries to get away from them, and it's a big concern."

He made his fortune in payroll processing, while Melnyk's came from pharmaceuticals.

Melnyk spends a lot of time in Barbados, where he pays to have Senators' games fed in by satellite to a local bar.

"He brings something Ottawa has never had before," Senators president Roy Mlakar said. "Eugene Melnyk is a very successful, fiscally sound man, who has significant assets."

Ask around in Buffalo, and similar words of praise abound for Golisano.

"You see the direction, you see strong leadership," Sabres coach Lindy Ruff said. "He's very decisive in everything that he does, and has a strong commitment to winning."

The Sabres and Senators are expected to have higher payrolls this season. Both are in the Northeast Division, where Buffalo finished last in the 2002-03 season, while Ottawa had the NHL's best regular-season record.

The Senators enjoyed the deepest playoff run in franchise history, losing Game 7 of the Eastern Conference finals to eventual Stanley Cup champion New Jersey.

Melnyk's arrival ensured that the core of the Senators would remain unchanged, with a payroll that could jump from $31 million to $40 million.

Golisano has pledged to increase the Sabres' payroll, from $25 million to possibly $33 million.

Each took over a team more than $150 million in debt -- and each certainly has money to spend.

Melnyk made nearly $42 million last year; he's chairman and CEO of the suburban Toronto-based Biovail Corp., a pharmaceutical firm.

He formally completed his purchase, valued at more than $100 million, in August. The deal includes the Senators and their arena.

Golisano made his fortune as founder and chairman of Rochester-based Paychex which, in 30 years, has grown into the nation's second-largest payroll processing firm. His purchase of the Sabres was valued at $92 million, and included control of their arena.

The Sabres spent last season in limbo after the NHL took operating control in June 2002 from former owner John Rigas, who was indicted on federal fraud charges after resigning as chairman of cable TV company Adelphia Communications.

"The challenge of making this financially viable is an interesting one to me," Golisano said. "It's totally different than anything I've done in the past because it's very retail-consumer oriented."

There's a whole culture of failure that needs to be turned around with the Sabres, a team that has lost money, let marquee players get away -- including goaltender Dominik Hasek -- and missed the playoffs two straight years.

Golisano already has started to make a mark. Ticket prices were cut slightly; the team re-signed all of its players and added talent to a patchwork lineup. The most noteworthy move was a trade for forward Chris Drury.

"I think he's re-energized at least the die-hard fans," said Susan Lecky, a longtime season-ticket holder. "I can't wait. I've been counting the days."

Buffalo's players are responding, too.

"It was a tough situation, and no one knew what was going on," forward Curtis Brown said. "For a man to step in and assure the team was going to stay here -- that's huge for everybody."

In Ottawa, Melnyk might have an easier time with marketing, considering he inherited a winner.

Among the Senators' offseason moves were re-signing star defenseman Wade Redden and veteran forward Bryan Smolinski to long-term deals.

And Melnyk is adding fan-friendly touches, including hiring rock band The Eagles to play a free concert Wednesday for ticket-package buyers, suite holders and sponsors.

"You have to run this as a business," Melnyk said. "But more importantly, it has to be a lot of fun."

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