Source Highly Critical of Ottawa Senators' Sale Process

A source close to the Senators' bidding process describes it as a "s*** show."

It would appear there's a simple reason why the sale of the Ottawa Senators is taking so long and why one of the potential ownership groups walked away in frustration last week. It's because the process has been, in the words of our source, a "s*** show." 

Postmedia reported last week that one group, led by Toronto billionaire Steve Apostolopoulos, reportedly grew so frustrated by the process, he called it quits. A Sportsnet report suggested "the goalposts kept moving." And a TSN radio report a day later indicated the biggest frustration stemmed from the board asking the group to pay for the Melnyks' tax bill from the sale.

Our source today helped us weave everything together.

Apostolopoulos was one of the groups that made their offer at the May 15th submission deadline, but the source told The Hockey News Ottawa today the team's representatives kept "grinding," coming back to them and saying they're going to have to raise their bids. That was an irritant but hardly an unprecedented tactic. Eyebrows were also raised as some groups were allowed to continue seeking investors after the May 15th deadline. 

But the source says the boiling point for the Apostolopoulos group came last week after they felt like they'd met all the Senators' back-and-forth demands and put forth a bid they believed would make them the "chosen ones," a bid that would be hard for the other groups to beat.

At that point, according to the source, that's when team representatives went back to the Apostolopoulos group and introduced a new demand. They suddenly now needed the group to cover Anna and Olivia Melnyk's capital gains taxes from the sale. 

As the name suggests, a capital gains tax is levied on the profit that an investor makes when an investment is sold. Based on their father's 2003 purchase price of the team, believed to be around $130 million (including the rink), the Melnyk's tax exposure on a roughly $900 million profit could be a massive number.

That's a very big ask at the eleventh hour, especially at the end of a process that was already being described as "drawn out and difficult."

The source believes the Apostolopoulos group is sincere in their decision to withdraw and probably now ready to move on and pursue another pro sports franchise at some point. But the source also hinted the Ottawa door may not be 100% closed either.

At the moment, there are said to be just two bidders remaining: Habs minority owner Michael Andlauer and former Penguins minority owners Jeffrey and Michael Kimel. On day one of the process, we had Andlauer as the lead bid, but with all the demands and counter-offers flying around, the reality is that the lead has probably changed hands a dozen times since then. 

With only two groups left, we might as well leave our dart right where it is.