When the Ottawa Senators officially request bankruptcy protection today, it will be important to remember what that does and does not mean.
This isn't the greedy players' fault, not even Alexei Yashin's or Alexandre Daigle's, for being paid what the owners decided they were worth.
This isn't the federal government's fault, for failing to extend tax breaks to the country's National Hockey League clubs that would have flown in the face of both public opinion and economic common sense.
This isn't even a true sign of the hockey apocalypse (look to places such as Nashville or Anaheim for that).
This is a specific, unique situation, the product of wild promises made and enormous debts incurred to secure the franchise and build it an arena in far-flung Kanata. If you're laying blame, look to the franchise's original owners for laying the foundation of this house of cards and to the league's governors, who opted to take the quick money and let the future take care of itself.
There are plenty of people who love hockey in Ottawa. The team is competitive, with a below-average payroll that wouldn't dip even if the league somehow negotiated or forced its way into a hard salary cap. On a straight money in, money out basis, the Senators and Corel Centre combined are close to being profitable, even with the end of the tech boom and even with empty seats some nights.
But as is the case with the Buffalo Sabres, whose outgoing owners were last seen doing the perp walk in handcuffs, hockey is only a small part of the story.
What this does represent is one colossal mess for the NHL. Though both Rod Bryden and Gary Bettman have tried to sound reassuring in the days since the Senators missed a payroll, suggesting that they still had control of the situation, the fact is the club's fate is now entirely out of their hands.
It was the Senators' major creditors -- the banks -- that killed Bryden's scheme to refinance the franchise through a tax-friendly limited partnership, and they're the ones who control the club's fate now. Unfortunately for hockey fans in Ottawa, their interests do not necessarily jibe with the league's or with those of anyone else who wants to keep big-league hockey alive in the capital.
The only thing the Canadian Imperial Bank of Commerce and FleetBoston Financial Corp. care about is getting paid the money they're owed. If the creditors were to line up in a bankruptcy proceeding, the taxman would go first, followed by the NHL (which had extended loans totalling more than $14-million to the Senators), followed by the two financial institutions, which, combined, are now owed more than $60-million. (The CIBC is expected to extend a further loan to keep the Senators afloat for the remainder of the season.) Even if the club is sold at a bargain-basement price, the proceeds would still not likely be enough to cover those debts.
Others waiting to be paid, including former players owed deferred payments, former coaches and team executives, are probably out of luck.
If someone could swoop in and buy both the club and Corel Centre on the cheap, as George Gillett did with the Montreal Canadiens and Bell Centre, there would be every possibility that NHL hockey could be made to work in Ottawa. And that would no doubt be the preference of Bettman and the league's owners. They don't want to be saddled with the legacy of a failed market, they like having a team in the city where political power resides (where else would a Finance Minister put his reputation on the line for a hockey team?) and they don't see an overabundance of attractive alternatives in a soft, uncertain economy.
The problem with that possibility is that the arena is a separate business, with a separate debt load, owned by Covanta Energy Corp., which is under U.S. bankruptcy protection, and which is another of the Senators' creditors.
Covanta would love to package the arena and Senators together in a fire sale since it would be sure to recoup something and since the building without an NHL team is worth considerably less. The banks' interests, though, certainly wouldn't be served by getting ensnarled in that situation and slicing their own return in the process. They'll do their level best to keep the two situations at arm's length.
And whither the Senators?
Obviously, there's not much of a market for NHL franchises right now. A whole bunch of them are for sale, with no takers.
Of course, there's always Paul Allen in Portland, Ore. But history suggests that when Allen wants to buy something, he buys it (the Portland Trail Blazers of the National Basketball Association and the Seattle Seahawks of the National Football League). When he wants to build something, he builds it (the Experience Music Project in Seattle). And when he wants to take a pass (as he did on a Canadian Football League expansion franchise -- though he could have bought it with relative pocket change -- and as he has when other NHL teams came on the market), he takes a pass.
Presumably, though, there is a price at which an NHL franchise, free to move, unencumbered by debt, becomes an attractive proposition for someone who thinks the game could work in Oregon, or Houston, or Las Vegas or (irony of ironies, given the history) Hamilton.
In a bankruptcy, the highest bidder gets the prize, as long as his cheque clears. The court's ruling won't be a hockey decision, or a league decision, but one purely based on dollars and cents, on satisfying the creditors.
Wins and losses and broken hearts don't enter into the equation. sbrunt@globeandmail.ca