Capital Punishment: An Ottawa Senators Franchise

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Blood Money: Melnyk Ties To Racketeering

For years, Ottawa Senators fans have been calling for the head of team owner Eugene Melnyk. If there is one person in the Ottawa community that has been feeling the stress that comes with an NHL team rocketing down towards the basement of the league, it's Melnyk. But no one expected him to go out like this.

Melnyk has been accused of racketeering, according to reports. While Melnyk may have saved the Senators from declaring bankruptcy in 2003 when he purchased the team, he has been marred in controversy ever since, whether it is his long line of loans he has taken to finance the team (including a $135-million line refinanced credit taken out in the summer of 2018) or when he fraudulently told investors that subpar Biovail (the pharmaceutical company behind his wealth) profits were a result of a fatal truck accident in Illinois that had delayed shipments.

The straw that broke the camel's back may have been the failed venture to acquire a new site to build the arena. In 2015, the National Capital Commission (NCC) put out a request for proposals to redevelop the LeBreton Flats area in downtown Ottawa, a longtime vacant former industrial area. In 2016 the NCC settled on the proposal presented by Senators owner Eugene Melnyk and the RendezVous LeBreton Group partnership with Trinity Developments. The proposal included housing units, park space, a recreation facility, a library and a new arena for the Ottawa Senators.

The plan to build a new arena downtown came apart in late 2018 after it was revealed that the Senators were suing Trinity for $700 million in damages. Trinity was developing a site adjacent to the LeBreton Flats site and the Senators felt this was inappropriate competition. Trinity responded with a $1 billion lawsuit, accusing the Senators of being unwilling to contribute any money to the project. The NCC announced the cancellation of the partnership's bid to develop the site but gave the sides an extension when the two parties agreed to mediation.

While all of that was going on, Melnyk offered security for shops in Ottawa for huge amounts of money. It remains seen what NHL Commissioner Gary Bettman and the Board of Governors will do about this shocking situation.

“Obviously, this is something completely unexpected,” said defenseman Mark Borowiecki. “The entire team is up in the air, and no one is really sure what's going to happen next.”

Theoretically, if it is proven that all contracts were signed with money acquired illegally, all contracts, both player and staff would be terminated immediately and the Senators would be forced to build a new team from scratch. This would be the first such case in the history of the National Hockey League, and it will be interesting to see how Commissioner Gary Bettman sets a precedent for all future situations of this magnitude. But the fact is that the final results of this investigation will certainly have a negative impact on the team and the league.