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(Ep.109) The Acquirers Podcast: Max Frumes & Sujeet Indap – Caesar's Coup: Value Investing, Corporate Restructuring, Debt & A Bankruptcy Brawl
Johnny Hopkins April 12, 2021 PodcastsLeave a Comment
In this episode of The Acquirers Podcast Tobias chats with Max Frumes and Sujeet Indap, co-authors of The Caesars Palace Coup. During the interview Max and Sujeet provided some great insights into:
The Caesar's Palace Coup
High-Profile Chapter 11s
Which Creditors Get Paid First?
Elliott & Appaloosa Formidable In Distressed Debt
Understanding Covenant-Lite Loans
Tense Negotiating Through Chapter 11
Equity Holders Still Maintain Control At The Bottom
The Caesar's Legacy
Paul Singer Foreclosed On A Sovereign
Debt Holders Want Liquidity Issues
TPG & Apollo Led Caesar's Buyout
You can find out more about Tobias' podcast here – The Acquirers Podcast. You can also listen to the podcast on your favorite podcast platforms here:
Tobias: Hi, I'm Tobias Carlisle. This is The Acquirer's Podcast. My special guests today are Max Frumes and Sujeet Indap. We're talking about their brand-new book, The Caesars Palace Coup. If you enjoyed Barbarians at the Gate, this is sort of a sequel. This is what happens when big buyouts go bad. They'll be talking us through the bankruptcy process. The big players who are in here, it's an absolutely fascinating discussion that's coming up right after this.
Tobias: What was The Caesars Palace Coup?
Max: The cool part of it was really the entire Caesars Entertainment company that had– I guess it was overloaded with debt from a buyout back at the top of the market, pre-great financial crisis started in 2006 and they barely closed in 2008. Then, because it had so much debt, it had to, eventually after a lot of different machinations, file for bankruptcy in 2015. There was just this giant war over the entity that filed for bankruptcy, which included Caesars Palace, so it's very appropriate. There's dozens and dozens of casinos and a huge amount of money and businesses that are wrapped up in the entire company. You had creditors that were fighting with the private equity companies that bought it out in 2008, Apollo and TPG. Really, the coup portion of it was that these creditors, they were able to ultimately prevail and take control of a large portion of the company through a Chapter 11 process, even though the private equity owners did everything that they possibly could, and probably more than they probably should have, to maintain ownership and as much control of different assets as they could.
TPG & Apollo
Tobias: So, it went through some sort of bankruptcy, whoever that whoever the private equity owners were, it was it TPG and Apollo?
Sujeet: That's right.
Tobias: It fell to bankruptcy just because paid way too much at the very top of the market, totally loaded with debt. Then, it goes into this bankruptcy process, which is– folks might not know, but there are lots of investors out there who focus solely on this part of the process, and they use it as a means to get control of the entity. Can you talk us through how did it all play out?
Max: [crosstalk] Well, distressed debt investing– I guess, Sujeet will get into the process, but distressed debt investing world is involves a lot of very sophisticated hedge funds that buy up debt of companies that might be trading at large discount pennies on the dollar, because the company is in financial trouble or some sort of distress. In this case, they had purchased a lot of the Caesar Entertainment debt. Sometimes, they recover that through Chapter 11. Sometimes, they recover that because the company recovers or some other type of deal is struck out of court. In this case, it went through the Chapter 11 process. Sujeet can add to that.
Sujeet: Yeah. I think the simplest way to think of this is, bankruptcy really has become a place for entrepreneurship in America, where you can buy a company and you get the chance, if you want to put real money after it to reset its capital structure, reset its operation… a way to get a readymade business. The smartest investors in the world are thinking rather than buying a company that's healthy, we can buy a company, we can make money that way.
Tobias: Who are the players through that process?
Sujeet: Yeah. Certainly, the private equity firms here were Apollo and TPG, two very well-known firms, real pioneers in the world of buyouts. We spend the first part of the book going through the history of these firms, where the… how they really seize the marketplace in the early 90s. TPG is very famous for– its initial origin trade was buying Continental Airlines out of bankruptcy and making a fortune. Apollo had come out of Drexel, the famed junk bond bank of the 80s that had problems over Michael Milken scandals. Then, some of its key executives were reborn in Apollo.
Then, you have these hedge funds, which are firms that have some similarities with private equity firms but they really specialize in buying and trading securities and being very savvy about the legal process. Also, again when you buy security, when you sell it, and so those firms are like Elliott, which is the firm founded by Paul Singer who's most famous for their fight with Argentina, which went on for more than a decade and they seized the ship very famously. Elliott's an important player.
Appaloosa… player guy named David Tepper who was a famous trader at Goldman Sachs fell out there and started Appaloosa and made a series of really smart trades. I think he's probably the single richest person in the story is probably worth $20 million, and after this case, he buys the Carolina Panthers football team for a record price. We think this victory and Caesars in that purchase of the football team are related things. Then, you've got your firms like Oaktree which is another important distressed debt pioneer, Howard Marks is the founder of that firm, cofounder, he writes the famous memos that come out and he's this market sage. You really have the biggest players in the world on Wall Street in this case. A lot of business stories, which are good, often have B and C list… we actually have a story that's an A list story with an A list plus story.
Tobias: Yeah. Some very big players, very big egos, very sharp elbows in this. What was the basis for Apollo and TPG though? They were trying to defend the equity but what was their basis for staying in there and arguing that the equity had some value?
Sujeet: We have an anecdote in the book about Blackstone, which had similarly bought Hilton Hotels right before the financial crisis and they did a restructuring. Ultimately, Blackstone made $14 billion in Hilton when it seemed like it was going to go bankrupt. It's the same thesis here. They believe in this business, Caesars, they think it's cyclical and it's going to snap back. They just have to keep it alive for long though and keep Elliott and Oaktree and Appaloosa at bay, and if they do that, they're going to make billions of dollars. The story is about that process and how that one went wrong. Matt, you were going to say?
Max: One of the premises that all of the distressed investments were based on as well were that just doing valuation by people who understood gaming and they understood the value of these casinos. There's $18 billion of debt at the operating company at the time that this ultimately filed for bankruptcy. Distressed debt investors, they did this calculation between what they felt the value of that entire entity should be, and where the collective debt was trading. There was just a huge discount already… tranche of debt they felt was undervalued, there were different arguments for different tranches of debt. Everybody believed that intrinsic value of the entire entity was undervalued. Apollo thought that, "Yeah, I just need to snap back," and they would be able to recover something, if they could maintain control." All the creditors thought the same thing, and ultimately, they had rights as creditors to force the hand of the owners, but everyone really did agree that the business would snap back eventually and be very valuable, which it was.
Tobias: The whole enterprise is valuable but the problem they have is they have some sort of liquidity issue where they just can't meet the debts as and when they fall due, they breach the covenants and that's what triggers all of this. Is there any suggestion that the purchases of the debt might have aided that process along?
Max: Absolutely. They would proudly say that that was the case. To say that this is liquidity problem, is like being in a ship that's vertical going down, [laughs] I think we got a little bit of water that's coming on board. The company was two years prior to it filing for bankruptcy. It clearly not going to be able to service several billion dollars of interest payments. At that point, they started doing these different transactions that shifted valuable assets out of the operating company. While it's solved the problem temporarily by getting some additional cash into the operating company, it took away revenue and EBITDA. So, all the things that they were doing to try to stave off this liquidity shortfall, just wound up exacerbating it. It brought the day of reckoning that all the creditors want. The creditors, they're like, they got to stop taking these assets. This is super aggressive.
One of among many things that they did to force their hand, besides filing a couple different lawsuits about the transactions themselves, was Elliott Management was behind a lawsuit to try to appoint essentially a conservator to put Caesars into the hands of someone who would take it away from Apollo, and so they filed this very aggressive lawsuit previously. It was one of the many things that forced Apollo and TPG to come to the table and come up with some sort of agreement, to file it at a certain date with at least one class of creditors on board. The creditors, they did a number of things to force the issue. Ultimately, Apollo and TPG didn't have much of a choice.
Tobias: Must be a little bit nerve wracking sitting on the other side of the table from Singer because they are one of the few funds that has gone out there and actually foreclosed on a sovereign, which you don't see often. Often, they're going after big businesses, but the sovereign as an– I thought it was a naval ship, but I don't think it was actually naval, that they actually foreclose, but do you discuss that story? Can you give some more–?
Sujeet: Yeah. We have that story [crosstalk] background to Elliott. What's interesting about this case is, in my opinion, there's like two firms that really, really matter, that tower over the rest of the industry in distressed debt investing. One is Elliott. They just have deep principles, they have deep pockets, they do a lot of work and they take huge stakes and take very aggressive positions. They stick to their guns literally, or figuratively. Then Appaloosa, the same way. Again, both, two big stakes, have very charismatic owners. They just strike fear in the heart of everyone else, because they can just take such large stakes. When they have a conviction about something, they just don't back out, which is what happened here with both Elliott and Appaloosa. Apollo is also a titanic figure in this world, and people are afraid of them. But Elliott and Appaloosa are truly the two firms in the world that are capable of standing up to Apollo, and that's what the story is largely about.
Tobias: Well, even Apollo is a frightening prospect, too, because Leon Black's had that very long history with Drexel Burnham, and then Leon Black, who's the– Maybe now former leader of Apollo, but–
Sujeet: That's a big part of the story, that there is this pressure and intimidation campaign that Apollo sets forth against various creditors, and it works most of the time. People are afraid of standing up to these guys and getting in their way and it affects their ability to do business down the road. There's another important firm called Canyon, which is very aggressive at first, but then starts to feel the heat a little bit and backs off. Oaktree, also a very formidable firm, gets nervous because they're standing there alone and very dramatically, [unintelligible [00:14:40] story that Appaloosa shows up. There is this real clash of the titans and this clash of egos, and you hope in this story, the suspense is who is going to blink first, who is going to back down because these firms are not used to anyone telling them what they can and can't do.
Tobias: Yes, certainly no shrinking violets among that group. What's your background? Are you reporters? Or, are you finance guys? How did you come together and find the story?
Max: We got one of each. Yeah, my background is longtime financial journalist. I came to New York about 11 years ago on a private equity beat with the deal, and then gravitated towards the debt that was put on to all these private equity deals, then to distressed debt specifically, and then I helped start up a company specifically dedicated to putting out stories and technical coverage of distressed debt investing and restructuring. All of our clients were actually hedge funds, a lot of people that were involved. So, very, very niche technical business journalist by background. Sujeet, he's the bonified businessman prior to his rebirth as a journalist.
Sujeet: Yeah. It's way back when I've been at the FT for eight years now. Before that, I was an investment banker for many years. I've been an analyst at an investment bank. After college, I later went to business school, and then was a specialist in M&A. I was not a distressed or bankruptcy banker. Caesars, when I started covering, it was really an interesting corporate finance story. There were these interesting transactions that Apollo was doing, that ultimately turned into the bankruptcy and then I covered the second part of the bankruptcy for the FT on a day-to-day basis, like the big moments.
Max and I both at the end of this case, we were both covering in a very different publications and from a different point of view. We knew the story was golden. It was had all these incredible players, the drama was very dramatic, there was a lot of twists and turns, and there hadn't been a book about distress in Chapter 11 restructuring. Many years ago, obviously, Barbarians at the Gate was written and that was a book about buyout industry. I like to think that this book is the second half of that, or the sequel, in some sense, and this is what happens when a private equity deal goes bad.
Max and I very fortuitously, by dumb luck ended up meeting on social media. I had been interested in the book, he had already started working on a book and we compared notes, and we knew it was a complicated story that could use two experienced journalists from different backgrounds. That's how we came together. It took a while to sell the book, it's actually pretty hard to sell the book to sell book as a first-time writer, particularly on a complicated subject, but we found a publisher and told the story and the pandemic happened and all these twists and turns on our own journeys, but here we are.
Tobias: Did you write the book during the pandemic? Were you done by the time that all came around?
Max: Yeah, fortunately, we'd done all the–[crosstalk]
Sujeet: The core reporting was in 2019.
Max: Yeah, we did almost all the in-person interviews flying around.
Sujeet: [crosstalk] Then, last year was editing it. Last year was a good year to be editing a book.
Tobias: [laughs] Let's talk a little bit about high-profile Chapter 11s. What are these Neiman, Toys"R"Us, PG&E and Hertz, what do they tell us about this particular case?
Max: Yeah. What we like to say is that all of the factors that created the modern-day Chapter 11 process and all the interesting innovations… will fly by the Caesars case and then every subsequent bankruptcy, also they can be referenced in some way, shape or form to the Caesars case. Modern-day Chapter 11 was born out of the rewriting of the bankruptcy code in 1978, which essentially allowed for different creditor classes. Before there was maybe just a couple of different banks, they were all just assumed to have one idea, they get some sort of recovery and there wasn't as much representation between, let's say, for a second lien unsecured that might have different priorities.
Once that happened, and along with the proliferation of junk bonds, it created this just enormous capital structures at companies that would then need to file– they would need to restructure, and the Chapter 11 process in the US became the model for the world. That created a very sophisticated type of distressed debt investor that really found a major foothold after the great financial crisis as well, major fortunes were made from that, because the understanding of investing in undervalued securities, that's where David Tepper made a lot of his money. By the time this case was taking place, it was a very, very competitive industry where a lot of people had made a lot of money, and you would have– if there was a real good opportunity to get involved with a good company that had a bad balance sheet, then there would be a pretty vicious fight over who got control of it, who would be able to make a disproportionate amount of money.
For around this time, major bankruptcies that happened, that were the result of the top of the buyout, like, the 2006, 2007 buyout boom, that era. Included TXU, you got to United Caesars, there's five or six other examples of companies that had $20, $30 billion buyouts that eventually filed for bankruptcy, and those all happened within a couple of years of each other. Then after Caesars, you had cases like J.Crew, and Neiman Marcus, where in a similar fashion, there was what we call the stripping of assets from creditors. Because of these loopholes in the creditor agreements and the indentures that govern the bonds and the loans of these companies, the private equity sponsor can, through how loose they are, move assets that should have actually provided credit support to those creditors away from them, and then give them some sort of negotiating leverage in a bankruptcy or restructuring situation. We've seen a lot of those bankruptcies post Caesars, or even out-of-court restructurings. We see that and then we also see a lot of the players from Caesars doing similar things in near bankruptcies nowadays.
A recent one, I can think of is– Acosta was this company, that Oaktree and Elliott, they wound up buying the debt and completely yet equitizing it, owning the company and then merge debt free. We see a lot of the culmination of everything prior to Caesars showing up in Caesars and then everything subsequently as people learned some lessons to then apply in these subsequent Chapter 11s.
Tobias: It seems to be a feature of distressed debt investing that as the market gets more and more expensive, then people pay more and more for these businesses, higher multiples, lower sort of possibility of them paying it back, that the loans tend to become less– the fewer covenants, less protection on the downside. For whatever reason, everybody seems to be so eager to buy this debt that they're able to get it through. They call them covenant lite. What is a covenant-lite loan and how does that feature in this story?
Max: Yeah. I guess since I work at Fitch right now that owns Covenant Review, and I work closely with the Covenant Review guys, which is a great lev fin [unintelligible [00:24:41] or great product that two dozen lev fin attorneys just poring over hundreds of pages of credit documents. Covenant lite means that, essentially, there's no ratios that a company has to maintain in order to keep on the good side of the creditors. There's nothing– like if they stopped making any money whatsoever, it's not going to go below a certain debt to EBITDA ratio or there's lots of different ratios that would normally be maintenance covenants. You have to be making X amount of money, you have to be making X amount of revenue compared with your earnings.
Otherwise, the creditors have the right to accelerate and force your payment. In the past, this is normally what you negotiate as a creditor. As CLO funds and high-yield bond funds proliferated, and there's just so much money sloshing around, looking to buy leveraged loans and bonds, the creditors had no more negotiating room, because if they didn't put money into this deal, then somebody else would. The companies and the private equity firms, they're smart to this, they'll be like, "All right, you know what? Sure, but we're not going to put any covenants that would force us to turn over the keys or pay you back or pay you a fee if there are some dramatic changes in our business structure." Still, you got to make the interest payments. There's all sorts of covenants that exist, and requirements, depending on the different creditor agreements but there's very few of those covenants that the companies are required to maintain a certain type of performance. Otherwise, the creditors have to say of what goes o—
Tobias: There's always a tension between– they call it a technical default, where there's some event shifting an asset around or not meeting those covenants that they've installed that allows for the debt holders to collect some on the loan and get control of the assets which debt holders, they're pretty canny. That's what they're looking to do, the equity holders equally reasonably canny that they're trying to prevent that from happening. When you have these covenant-lite loans, does that create a situation where you have– it's more of a negotiation through the bankruptcy process rather than– previously, it would have been settled by we know, pretty clearly what everybody's rights are. It falls out whoever's closest to the assets gets control of the assets. Here, there's so much debt, there's so much complexity that doesn't necessitate a negotiation through that Chapter 11 process, and is that what creates the drama and the tension of something like this?
Sujeet: Yeah. We have to separate the two different– the barrier is in Chapter 11 and outside of Chapter 11. If we think about what happened in Caesars, the company struggles for several years after the financial crisis, and because they have covenant-lite debt, and the financial markets are actually wide open, there's a lot of… things and exchange offers and traditional– let's call them liability management… you'd have to keep the company alive and to save the company and create value for everyone. This is in fact good for creditors, because some creditors don't want to foreclose on a troubled business. They prefer that the current owners try to fix it.
The flip side is, when you cross the line and do things that are so aggressive that those creditors are actually harmed, which I think is the tension that emerges here, then there's an entire effort to get a restructuring done outside of bankruptcy in Caesars. The advantage of that is that keeps the private equity owners in charge, they can do some comprehensive restructuring or exchange offer that reduces the debt and everybody takes haircuts. Theoretically, that's the best alternative for everyone. What the story is about though is when that fails, and you end up in bankruptcy, all the rules change, suddenly there's a judge's overseeing the process. The private equity firms don't really have control anymore. Everyone gets a voice, and gets a chance for their grievances to be heard. It is a very fateful decision to file for bankruptcy because, again, you lose control. Once you give everyone a voice, it's a free for all, and that free for all is, I think, the basis for the second half of the story.
Tobias: You don't have some protect– the debt they take into the bankruptcy has certain rights for recovery and various other things like that. The more secured you are, the closer you are to the assets, in my understanding, the better off you were that– if you had unsecured covenant-lite debt, you're basically quasi-equity, you're at the back of the pack, you're just going to stand there with everybody else and you're going to get equities gone, probably covenant-lite debt, all that subordinated debt is gone. It's really a fight between the guys who've got some security. If there's residue beyond that, then that's going to cascade down to those other guys
Sujeet: What's fascinating though in this case is that–
Max: Sujeet, I'll touch on just compartmentalizing the covenant issue from the security issue. Covenants ultimately are only going to be something to negotiate pre-petition. It's funny because as soon as a company files for bankruptcy, like the lev fin attorneys almost are like, "All right, doesn't matter." [chuckles] Then it just becomes, what is it that is your actual security in your claim? What do you liens on? Where those liens perfected? Then, do you have other claims? What those other claims could be, it could be these legal claims because there were assets that were moved away from you pre-petition, could be fraudulent. Conveyance could be that there's cash that wasn't actually perfected, which means that it was moved too close to the time of the bankruptcy, which is one of the things that happens in this case.
The different classes of creditors here, we'll break them down between, there was the loan group, which is the top and they had the strongest security and the most protection. Then the first lien bonds, which just slightly below the loan group but they're both first lien. Then, they have the second lien bonds. After the top two, it was over $10 billion debt, and it didn't leave much for the second lien. Second liens, essentially part of the plan was to "cram them down." Then anything under the second lien is just going to be this giant swath of unsecured creditors that get big lumped in together, and they would presumably be just even lower than that. There was a lot of argument and a lot of trying to clarify which creditors had which assets as security, in addition to the fight to pull assets back into the opco box that had been moved out of it pre-petition. All that was going on, that's why there's so many fees in bankruptcy. All these different constituencies get a financial advisor and they get a legal counsel.
Sujeet can talk about the second lien group, but I would say the most significant group here is that second lien group that contained the Appaloosa and Oaktree as their two main pugnacious constituents. One of the most interesting things that happen in this bankruptcy that you'll hardly ever see and really, it was one of those momentum shifts was that the second lien group got its own official committee separate from the unsecured creditors committee. The debtor is trying to say, "Oh, these second lien creditors, they shouldn't even be on the unsecured creditors committee."
They're not really part of the– seeing the unsecured, it's important to get onto an official committee because then you get all your fees paid by the estate. Ultimately, the trustees, this governmental appointee that appoints these creditors committee and the bankruptcy process, which is a federal process, he was like, "Yeah, you're right, they're not really unsecured creditors. I think they should get their own committee." There should be an official second lien committee, and then the debtor was like, "No, no. We highly oppose this." Ultimately, they did, they prevailed. They got their own their own committee, which means all their fees were paid by the estate, which really funded this monster, this amazing attorney, who's born for this type of fight. Sujeet, do you want to talk about the second lien group in bankruptcy?
Sujeet: What's really interesting, you hit an important point, Tobias, is the order of risky debt goes from senior to junior. By that logic, the equity holders should be in the worst possible position. But what the brilliance of Apollo is, and they've done this in so many cases, is that the equity holder while still at the bottom, it controls the company, it controls the management, it controls the restructuring plan. Even being at the bottom, they can figure out a way to stay in control. In the Caesars case, the whole game is that they're going to engineer the restructuring plan, they're going to figure out what the new company looks like, the new capital structure. They're going to keep an interest by buying the new company's equity. They're going to put in a few 100 million dollars to buy Caesars at a cheap value. That allows them to stay in control, even though to your point there, they should theoretically be wiped out and they originally might would have been wiped out but in fact, they're going to stay in control, but buying the new equity at a cheap valuation, and they can make up for all those previous losses. In fact, the worst position is not being the equity holder, it's being a junior unsecured bond holder.
Tobias: Unless you can get yourself on a committee.
Sujeet: Yes, well, that's the rub. Yes.
Tobias: Then, you get your fees paid for, so there's no incentive to negotiate or to stop negotiating at any point. You just keep on pushing for as long as you possibly can or just become nettlesome and you finally get your payment to go away.
Sujeet: Right.
Max: It's one strategy.
Tobias: What's the Caesars legacy? You say aggressive P/E sponsors, asset stripping, priming. What do these things mean?
Max: Those are everything that Apollo got called out for. It's a little bit tongue in cheek, but I think it's also true. Apollo was really behind a lot of the financial engineering prior to the bankruptcy. The asset stripping was when they were– again, they're moving casinos and different assets away from the operating company that ultimately holds all the debt, and that was the entity that filed for bankruptcy. The priming deals are when you have one group of creditors that– there's similarly situated creditors, and you have one group that strikes a deal with the company, and then all of a sudden, they get priority over the other half, that same group. There's a couple of deals like that were struck. Especially one particularly egregious one was where 51% of one bond group struck a deal with Apollo. Then essentially got them then paid back at 75 cents on the dollar and got the other group almost wiped out. All these transactions, most of them got called out in the bankruptcy by the independent examiner as being either by subject to potential fraudulent conveyance or corporate governance claims. Eventually, Apollo lost their equity check, their original equity check.
See, you would think that the lesson would be, don't do those things, but that's not the lesson. Everyone saw that they did that, and how hard it was to fight and buy lots of different strokes of luck, and skill that the junior creditors were able to get some sort of recovery, how hard that was. Now the playbook is to do all of those things. You see that like Travelport, Elliott Management, one of the first lien bond group. In Travelport, they stripped a billion dollars' worth of assets, that's the IP for this, essentially a travel payment processing company, away from their creditors, and then they went into a pair of unrestricted subsidiaries, and then they borrowed money off of that asset, and they're, like, "You know what? We're just going to put $500 million in debt." It's now senior to everybody else. That's asset stripping and priming right there. Then, the other creditors, like, "No. You know what? All right. We'll provide that, just put them back, tighten up our credit agreement. Here's some money." Elliott got a better deal than they would have had they not been able to do that. Serta Simmons is another one. These things are, they're taken out of place, out of court, where you have groups of creditors that are clamoring over themselves to provide financing to a company that will become senior to all of the other existing debt, and that took place a lot in 2020.
Tobias: Gents, we're coming up on time. If folks want to find the book or get in touch with you guys or follow along with what you're doing, what's the best way to go about doing that?
Max: Yeah, you can follow us both on Twitter. I'm just @maxfrumes. M-A-X F-R-U-M-E-S. Then, the best place to buy the book, helps with our rankings–
Tobias: Amazon.
Max: -is on Amazon, everyone loves that. Well, it's funny, bookshop.org and Walmart, when the first run sold out quickly, there was some shipping issue, and Amazon was hit with more orders than they had expected, because it's a highly sought-after popular book right now, bookshop.org and Walmart were the only other two places that people could get it. Sujeet, where do people follow you?
Sujeet: Twitter's a great place. I'm just @sindap, S-I-N-D-A-P. Of course, in the Financial Times.
Tobias: Gents, this is an absolutely fascinating story. The Caesars Palace Coup by Max Frumes and Sujeet Indap. Thank you very much for your time.
Max: Thanks for having us, Tobias. Really appreciate it.
Sujeet: Thanks for having us, Tobias. This was great.


text:
module Azure::Compute::Mgmt::V2020_09_30_preview
  module Models
    #
    # Defines values for SelectPermissions
    #
    module SelectPermissions
      Permissions = "Permissions"
    end
  end
end

redpajama_set_name: RedPajamaGithub


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2016-17 Carolina Hurricanes Season Preview-Part 3A: Player by player (Core and role players)
by Matt Karash | Oct 14, 2016 | GM/Coaches' Seat, On The Beat
For those catching up on Canes reading heading into the weekend…
Part 1 looked at the roster transition from 2015-16 to the opening day roster for 2016-17.
Part 2 identified 5 keys for the Hurricanes to improve upon the 2015-16 season.
Part 3 of my 2016-17 Carolina Hurricanes season preview goes player by player and identifies role and goals for each player.
The core foundation
With a young roster and so many players still trying to play their way up to their full potential, there are likely to be setbacks, lulls and maybe even failures with some of the young players. That makes it even more important for Coach Bill Peters to have a few veterans who are steady and solid on a nightly basis and can eat up minutes when he needs to down shift a bit on the youth. If the key veterans lack consistency, I think it will certainly drip into the overall play of the team and make it really hard to play the consistent brand of hockey necessary to avoid droughts and consistently collect points.
Jordan Staal
He needs to do exactly what he did from early December through late February which is to lead a #1/#2 line that can log 20 minutes per night, take as many of the tough match ups as Peters can get them into (easier at home) and at least break even on the night. He was the Hurricanes best player when they were winning in 2015-16, and he needs to be that again in 2016-17. I actually do not get too bogged down with Staal's scoring totals, but it is impossible to break even playing against great scoring lines by 100% shutting them down. There does need to be an element of attacking them back. In 37 games from December 5 through February 25 (which is when Nordstrom/Staal/Nestrasil was put together through when Nestrasil was injured), Jordan Staal had 11 goals and 30 points in 37 games for an 82-game pace of 24 goals and 66 points. Something like 20/60 would be fine if it importantly includes driving possession and shutting down the opponent to the tune of a positive goal differential.
Justin Faulk
Just like Jordan Staal is the young gray beard at forward, so too is 24-year old Justin Faulk on the blue line. Faulk's scoring surge on the power play in the first half of the 2015-16 season was nothing short of sensational. He was easily the Hurricanes best player or the first couple months of the season and did all he could to keep the ship from sinking despite taking in plenty of water in October and November. But along the way to becoming a scoring sensation, the defensive side of Faulk's game was just okay. He was not horrible, but too often he was on the screen or part of the action when the other team scored. He at times looked like a player who was a competent first pairing defenseman but not yet a great one. If I take the high points of different areas of Justin Faulk's game he is an elite defender. The key is for him to put it all together at the same time. That makes him an elite defenseman on any given night. The other key ingredient is to be able to play through the lesser stretches of hockey, avoid short stretches of very bad and at least offer steady and generally sound even as a low point. With so many young players who will likely have some ups and downs, it is critical that Faulk put it all together and be an every game steady anchor and minute eater on the Hurricanes blue line. Something in the neighborhood of 50 points would help the Hurricanes boost scoring, but more important is every game steadiness.
Cam Ward
At least a couple years have now passed since Cam Ward strung together a solid season from end to end. And at this stage of his career at 32 years old, I do not think it is reasonable to expect him to be an elite goalie. But for the Hurricanes to match and ideally improve upon the 86 points that they earned in 2015-16, the team will need to receive at least league average goaltending from some combination of Cam Ward and Eddie Lack. Ward was up to that challenge and maybe even slightly above it during the Canes run from December through February, and it made a huge difference. The key is that with a young roster and little margin for error trying to push up in the standings, the Hurricanes need for goaltending to be good if not great on a consistent basis for the entirety of the season. Eddie Lack could play a role in this equation too but as the incumbent starter and the better of the 2 in 2015-16, Ward will get the starting nod to start the season during the all-important effort to get off to a better start. The key for Ward is not so much a specific save percentage of goals against average. Rather, he needs to avoid bad goals and bad efforts that directly cost the team points in the standings and be steady and sound enough to give his team a chance to win games or at least collect overtime loss points on a nightly basis. With roster and scoring depth still a work in process and so many young players in the lineup, I do not see an equation in which the Hurricanes compete for a playoff spot without receiving at least average NHL goaltending. That challenge goes to Cam Ward.
Ron Hainsey
At 35 years old, Ron Hainsey's role is gradually decreasing as the young guns rise up. At least to start the season, Hainsey will cede his first pairing role next to Justin Faulk to young Jaccob Slavin. But Hainsey is still a critical part of the effort to both go with youth, upside and the ability to skate and attack on the blue but still be sound and steady. Especially if he keeps his season starting slot next to Brett Pesce in the top 4, Hainsey has a quiet but significant role just clicking off shifts with sound play and staying out of trouble. The pairing of John-Michael Liles and Brett Pesce was by no means the star of the 2015-16 mid-season success, but their ability to eat up shifts and minimize high-quality chances against was a key foundation to the Hurricanes staying in more games and collecting 2 or at least 1 point in many of them. Critical for Hainsey is to be a bit of a chameleon and adjust his game a little bit based on who he is playing with. Playing with Pesce, it is critical that he play the same heady 2-man puck moving/support role that Liles did. If Hainsey later finds himself with Murphy or Hanifin, being a stay-home backstop when they gallop up the ice will be more important. He will also play a role on a penalty kill that has been among the league's best the past couple seasons. Hainsey does not need to be spectacular. Rather, he needs to be steady and sound as a foundational piece of the blue line.
The role players
Across a roster of 20-23 players not all are expected to be the drivers of success. But in a sport where 19 of 20 players have a role in every game, it is important for the depth/role players to make a contribution in some way. Especially for a team like the Hurricanes who are still working to build their depth at the forward position, having a few role players step into higher slots and outperform their natural slot via some combination of chemistry or fit with line mates or even just hot streaks plays a key role in winning. The Hurricanes have a few players who are arguably playing above their natural NHL slot for the Hurricanes and are in very important roles that will decide hockey games.
Andrej Nestrasil
Andrej Nestrasil along with Jordan Staal and Joakim Nordstrom was part of the greatest 1+1+1=7 chemistry story for the Hurricanes in 2015-16. Bookended by 2 depth players who figured to compete for bottom half of the roster ice time, Jordan Staal found a rhythm and a consistent, repeatable formula for success once he started playing with Nestrasil and Nordstrom. The line was easily the team's best in the best part of the season. One might figure the solid play would be measured in a scoring surge. Jordan Staal did see a production uptick, partly from his strong play on the power play, but Nestrasil's modest 23 points in 54 games (with slightly higher production rate for time on Staal's line) was not the best way to measure Nestrasil's role. The line's combination of defensive zone acumen, speed carrying the puck through the neutral zone from Nordstrom and Staal and a strong cycling and puck possession game in the offensive zone from all 3 fueled the Hurricanes possession game and the wins that came from it. If Nestrasil stays on Jordan Staal's line, a scoring boost would obviously be a positive but priority 1 is getting that line back to where it was at center of the Hurricanes success in 2015-16.
Joakim Nordstrom
His story reads a bit like Andrej Nestrasil's. Joakim Nordstrom started the 2015-16 season injured and then shuffled in and out of the lineup and across different lines early in the season when nothing else seemed to work either. He then fit perfectly with Jordan Staal and the rest of that history is chronicled above. Nordstrom did see a slightly greater uptick in scoring than Nestrasil. His 8 goals and 9 assists in 37 games projects to 18 goals and 37 points which is obviously not high-end scoring but is borderline enough for a player who also helps suppress scoring against. More significant than his scoring total was his subtle but important contribution to the line's puck possession in his role providing puck support through the neutral zone and retrieving it when dumped. Nordstrom's speed made it possible for Jordan Staal to zip through the neutral zone 2-wide which prevented the defense from converging on him. In addition, in the situation where the defense did double up on Staal puck possession was often as easy as then throwing the puck into the offensive zone to a place where Nordstrom could win the race and retrieve it. For a team that needs to boost scoring, one would hope for a little bit more from Nordstrom on score sheet if he continues to receive significant ice time on a second line with Jordan Staal, but the fact that he gets virtually nothing for power play ice time makes his 40ish-point pace from the middle of 2015-16 acceptable. As a 2-way player who can skate, Nordstrom would have a similar role defending and winning pucks if at some point he falls to a lower line.
Bryan Bickell
When he was obtained as part of the trade with the primary goal of adding a good young player in Teuvo Teravainen, the possibility existed that Bickell was simply a financial write off as part of the Tervainen acquisition cost. Making any final judgement on Bickell (or any player for that matter) before the season even starts is obviously premature, but early indications are that Bickell could be a factor at the NHL level. For a team that leans small and has long lacked a consistent net front presence for the power play, Bickell has a unique skill set that could boost the team even if his minutes are limited. If he can play a physical body-banging style of old school fourth line hockey and chip in at least average fourth line depth scoring, he will be outperforming the low end of what might have been expected from him over the summer. If he finds his way onto the second power play unit and fills an important role creating chaos in/around the goalie crease, he could become a big positive even if in a smaller role.
Viktor Stalberg
When the Hurricanes decided to keep Jay McClement, part ways with potential wing or center Riley Nash and add only wings for depth players, Ron Francis made a bet on Jay McClement being a better C4 in 2015-16 and that a good fourth line could be built around McClement. More or less, Francis bet that the problem was not so much McClement as the other players who cycled through the wing positions on the fourth line. All of those players are gone, and Viktor Stalberg is the most direct replacement. I am on record as preferring to go new school NHL with more of a skating, skill and scoring fourth line, but in the current scenario that sees the team build around Jay McClement, Stalberg has a critical role. Stalberg needs to do only 2 things to be a valuable role player. First, he must prove to be part of an equation to solidify a fourth line that was bad in 2015-16. Second, he must step into a penalty killing role and help the team maintain that as a strength. If Stalberg does only those 2 things, he will be a success in a limited role.
Jay McClement
As noted in the comments about Bickell and Stalberg, the Hurricanes fourth line struggled in 2015-16. The wing position on that line was a revolving door, but the once constant was Jay McClement as the center. I am one of many who thinks that the Hurricanes can build a better roster with Jay McClement pushed down to the #13 slot and out of the lineup. Bill Peters watched the same hockey the rest of us did last season, and at least to start the season has McClement still centering a fourth line. I think the rationale is to recognize the lack of true top-end ready NHL depth and try to build something safe and sound from the fourth line in addition to netting 2 of the needed 4 upfront penalty killers. Theoretically, this is what McClement does well as a defense-first fourth-liner, experienced penalty killer and strong face-off man. A good 2016-17 season for McClement would simply be leading a fourth line that is stable and not a negative and playing a key role on a good penalty kill unit. If he does that, it solidifies a fourth line that was a negative in 2015-16 and pushing the decision on wins/losses up to the top half of the lineup which is where you want it to be.
Jakub Nakladal
With summer signee Matt Tennyson not working out in preseason, and Ron Francis making the prudent decision that Roland McKeown was not quite ready, Francis reached to the leftover list from free agency and also the waiver wire to gain blue line depth. It is unclear who is #6 and who is #7 (and it might change over time) between Dahlbeck and Jakub Nakladal, but there role is similar. Whichever of them is in the lineup will at least start the season next to Noah Hanifin. In that role, the key is to provide support defensively and be a bit of a stay-home type when Hanifin pushes up the ice. More so than any statistical goals, the key for the #6 is to quickly build chemistry with Hanifin and help him continue to grow his game. The job description for #7 is the challenging task of being ready to play at all times despite sometimes seeing minimal actual game action. Best guess is that Nakladal who is a right shot wins the #6 slot and Dahlbeck slips to #7, but that is subject to be determined over the course of the next few weeks likely with both receiving a chance to show what they can do in the lineup.
Klas Dahlbeck
See write up above on Nakladal. It is just a matter of who wins the #6 slot and who falls to #7.
Next up in part 3B either Friday night or otherwise Saturday, I will profile the other half of the Hurricanes roster player by player.

redpajama_set_name: RedPajamaCommonCrawl