The failure of the NHL's Ottawa Senators to meet its Jan. 1 player payroll has given rise to news reports that the team might file for bankruptcy protection this week, perhaps as early as today.
Senators spokesman Phil Legault would not comment on those reports, but people familiar with the situation said yesterday that team owner Roderick Bryden could have a new financing plan in place within days of a bankruptcy filing.
The Senators are the winningest team in the NHL this season, with 25 wins, despite a 6-4 loss to Vancouver last night. They are drawing big crowds to Ottawa's Corel Centre, averaging more than 16,000 per game in the 18,500-seat arena. But the team has failed to generate enough revenue to meet its payroll and pay its debt, which is more than $100 million. Included in that debt is nearly $40 million owed to the Canadian Imperial Bank of Commerce and FleetBoston Financial Corp.
Howard Bloom, publisher of Ottawa-based www.sportsbusinessnews.com and the host of a sports radio talk show, said a bankruptcy filing would increase the likelihood that the Senators would be moved to a new market.
"It would create the opportunity for someone to pay 80 to $100 million to buy one of the best teams in the NHL and move it to their market," Bloom said. "I am talking about Houston, where they are opening up a new building for the [NBA's] Rockets, and Portland, where [billionaire] Paul Allen is far too smart to pass up the opportunity to buy a hockey team."
David Skeel, who teaches bankruptcy law at the University of Pennsylvania Law School, said Canadian bankruptcy laws give more power to the creditors, making it more likely the team would be sold. A buyer likely would move the team after the purchase.