Ottawa Senators receiving bids for more than 900 million USD (1.24 billion CDN)

[S E P H]

Report: Senators have nine bidders, some offering up more than $900M

The Ottawa Senators have nine parties interested in purchasing the team, with some of the bids valuing the team at more than $900 million, according to a report Thursday in Sportico.

www.sportsnet.ca

Deputy commissioner Bill Daly said on a podcast in late February that the final valuation will be in excess of $800 million and that $1 billion is a “real possibility” (all figures are in U.S. dollars). As of today's exchange rate, US$900 million is CDN$1.24 billion. A purchase price of more than $900 million would be a record for an NHL franchise.

Forbes valued the Senators to be worth US$525 million last year, though the sale price is expected to be greater than that figure. Sportico valued the team at $655 million.

Surprised that one of the smaller markets in the NHL is getting bids for more than 900 million, which might showcase the health of the league at the moment. Thoughts?

Click to read more...

 

[jcs0218]

I hope that the Ottawa Senators don't go to the highest bidder, but rather to an ownership group that will care for the team after the purchase is made. For example, by spending to the salary cap limit and being an actual fan of the team.

You would think that the highest bidder would also care for the team after purchase, considering the fact that they should care for an asset that they paid so much for. But this isn't always the case.

Unfortunately, the sellers don't usually care what happens with a team after they sell. So they will take the highest bid.

 

[badfish]

Report: Senators have nine bidders, some offering up more than $900M

The Ottawa Senators have nine parties interested in purchasing the team, with some of the bids valuing the team at more than $900 million, according to a report Thursday in Sportico.

www.sportsnet.ca

Surprised that one of the smaller markets in the NHL is getting bids for more than 900 million, which might showcase the health of the league at the moment. Thoughts?

I have no basis or way to know if $500 or $900M is right or fair but I would think it goes a little bit like this:

The value of the franchise = the current value of the team + a risk adjusted premium based on what the team could be worth under future operating/market conditions such as an arena downtown.

How much that premium is adjusted for risk probably depends on how confident/optimistic the bidders are in implementing/realizing the operating/market condition changes.

It would be a fun valuation/negotiation exercise to be a part of for sure.

 

[S E P H]

I have no basis or way to know if $500 or $900M is right or fair but I would think it goes a little bit like this:

The value of the franchise = the current value of the team + a risk adjusted premium based on what the team could be worth under future operating/market conditions such as an arena downtown.

How much that premium is adjusted for risk probably depends on how confident/optimistic the bidders are in implementing/realizing the operating/market condition changes.

It would be a fun valuation/negotiation exercise to be a part of for sure.

I think the telly deals have vastly increased teams' values, but I also think the potential for a new arena brings a lot of value to the Sens compared to other teams valued around their level in last year's Forbes.

 

[Karl Eriksson]

That’s the Patrick Brown factor

 

[NyQuil]

I hope that the Ottawa Senators don't go to the highest bidder, but rather to an ownership group that will care for the team after the purchase is made. For example, by spending to the salary cap limit and being an actual fan of the team.

You would think that the highest bidder would also care for the team after purchase, considering the fact that they should care for an asset that they paid so much for. But this isn't always the case.

Unfortunately, the sellers don't usually care what happens with a team after they sell. So they will take the highest bid.

It is a condition of the sale that they can’t move the team.

So that is something.

 

[Divine]

Their value is probably valued higher because it’s in Ontario.

A lot of hockey fans already in the area, and a ton of Leafs fans in Ottawa who take over when the Leafs are in town.

They’re probably hoping to create a competitive team and take over that fanbase. It could happen with the new generation, and lots of Leafs fans are glad to drive to Ottawa for cheap tickets, although I don’t know if tickets are still going to be super cheap (relative to Toronto) if it sells for 900M+.

Ottawa tickets are really cheap currently, bottom 5 in the league and the cheapest in Canada while being near the market with the most expensive, so it has huge potential if you can convert some of those fans.

 

[NyQuil]

Their value is probably valued higher because it’s in Ontario.

A lot of hockey fans already in the area, and a ton of Leafs fans in Ottawa who take over when the Leafs are in town.

They’re probably hoping to create a competitive team and take over that fanbase. It could happen with the new generation, and lots of Leafs fans are glad to drive to Ottawa for cheap tickets, although I don’t know if tickets are still going to be super cheap (relative to Toronto) if it sells for 900M+.

Ottawa tickets are really cheap currently, bottom 5 in the league and the cheapest in Canada while being near the market with the most expensive, so it has huge potential if you can convert some of those fans.

My wife's family were all Leafs fans prior to the Senators returning to the league and now they are all Senators fans.

Interesting, my mother-in-law was in the stands for the 1967 Stanley Cup victory. She showed me the ticket stubs.

Pretty much every Senators fan over a certain age is a convert from another fan base (most often the Habs and Leafs).

In the end, it became easy for them to move on from the Leafs with the long track-record of regular season and playoff failure and missed expectations. I suspect that might continue with the way things have been going over the past couple of decades.

It's probably why Toronto is leery about allowing another team in the GTA. (obviously Buffalo has a say as well)

In any event, geography has always been their blessing and their curse. Montreal is much closer to Ottawa and unsurprisingly there are a lot of Habs fans both in the Ottawa area and a short drive away.

 

[Divine]

My wife's family were all Leafs fans prior to the Senators returning to the league and now they are all Senators fans.

Interesting, my mother-in-law was in the stands for the 1967 Stanley Cup victory. She showed me the ticket stubs.

Pretty much every Senators fan over a certain age is a convert from another fan base (most often the Habs and Leafs).

In the end, it was easy for them to move on from the Leafs with the long track-record of regular season and playoff failure and missed expectations. I suspect that might continue with the way things have been going over the past couple of decades.

It's probably why Toronto is leery about allowing another team in the GTA. (obviously Buffalo has a say as well)

It’s actually surprisingly low the conversion considering the proximity and lack of success from Toronto. Leafs games in Ottawa are sold out, but Sens games in a regular season usually have tons of empty seats unless there’s something meaningful about the game.

I know a lot of huge hockey fans living in Ottawa who only exclusively go to the Leafs games in Ottawa, or Habs, or whatever opposition team they’re cheering for. Mostly, they go for the opposition and cheap seats, rather than loyalty to the Sens. More Leafs fans go to Buffalo, probably because it’s closer even though Ottawa has similar priced tickets and you don’t have to cross a border.

Location wise though Ottawa has huge potential sitting between two of the biggest fanbases in the NHL.

 

[NyQuil]

It’s actually surprisingly low the conversion considering the proximity and lack of success from Toronto. Leafs games in Ottawa are sold out, but Sens games in a regular season usually have tons of empty seats unless there’s something meaningful about the game.

Well, with 1/5 the market size of the GTA, and a similarly sized arena, not really that surprising unless the Senators are successful.

A fairer comparison would be if Toronto had to fill a 93,000 seat facility every night.

This season the attendance has been going up significantly in games not involving either team, so there's definitely hope on the horizon. They will never have the season ticket base of larger markets, so it depends on a lot on how competitive and entertaining the team is in terms of gate receipts.

Back when the team was competing in the playoffs consistently, they outdrew a lot of teams in the league, including the Leafs.

NHL 2005-06 team attendance at hockeydb.com

Attendance for the National Hockey League for the 2005-06 season

www.hockeydb.com

 

[jbeck5]

Their value is probably valued higher because it’s in Ontario.

A lot of hockey fans already in the area, and a ton of Leafs fans in Ottawa who take over when the Leafs are in town.

They’re probably hoping to create a competitive team and take over that fanbase. It could happen with the new generation, and lots of Leafs fans are glad to drive to Ottawa for cheap tickets, although I don’t know if tickets are still going to be super cheap (relative to Toronto) if it sells for 900M+.

Ottawa tickets are really cheap currently, bottom 5 in the league and the cheapest in Canada while being near the market with the most expensive, so it has huge potential if you can convert some of those fans.

For sure. My dad was a leaf fan before the sens came to town.

Plus throw in the fact that people hate the overhyped (like how people hated lil Wayne when he was at the top...or justin Bieber) so you'll get a lot of people in Toronto figuring out the Leafs are overhyped and will go elsewhere. It's hard to build and keep a fanbase when you don't make any noise in the playoffs. So if the Leafs lose in the first round or two and the sens make the playoffs, you can see attention start to reverse.

Of course Ottawa will never compete in terms of fan numbers with Toronto. Plus many Toronto fans have just accepted failure instead of potentially adopting another team but all the young fans aren't a lost cause. The young fans can be influenced by a playoff run by another team.

 

[jbeck5]

It’s actually surprisingly low the conversion considering the proximity and lack of success from Toronto. Leafs games in Ottawa are sold out, but Sens games in a regular season usually have tons of empty seats unless there’s something meaningful about the game.

I know a lot of huge hockey fans living in Ottawa who only exclusively go to the Leafs games in Ottawa, or Habs, or whatever opposition team they’re cheering for. Mostly, they go for the opposition and cheap seats, rather than loyalty to the Sens. More Leafs fans go to Buffalo, probably because it’s closer even though Ottawa has similar priced tickets and you don’t have to cross a border.


Location wise though Ottawa has huge potential sitting between two of the biggest fanbases in the NHL.

It's interesting why leaf fans will sell out every sens game in Ottawa but won't sell out every game in Toronto. You would think their sellout streaks would go back to the end of the Ballard years but no.

Makes you wonder if all those business suits that don't care about the game weren't getting free tickets, how little sell outs they would actually have.

Ever been to a random leaf game against like Minnesota on a Tuesday or something? So quiet. There will be over 18,000 fans but it will sound like there's 8,000 fans because 10,000 of the people there aren't even hockey or leaf fans. They're just rich people.

 

[NyQuil]

Ever been to a random leaf game against like Minnesota on a Tuesday or something? So quiet. There will be over 18,000 fans but it will sound like there's 8,000 fans because 10,000 of the people there aren't even hockey or leaf fans. They're just rich people.

Wayne Scanlan wrote an article a few years back in 2017 comparing corporate season ticket bases.

In Ottawa, it was 4,000 at the time compared with 13,000 of the total 16,000 season ticket base in Toronto.

Given that it's a government town, and tickets cannot be purchased or even given to government employees as gifts, Ottawa has to rely pretty much exclusively on hockey fans to fill their building.

Scanlan: A breakdown of the Senators attendance issues in a challenging market

Fans and the hockey club grow weary of the topic.

ottawasun.com

 

[Tufted Titmouse]

Well, with 1/5 the market size of the GTA, and a similarly sized arena, not really that surprising unless the Senators are successful.

A fairer comparison would be if Toronto had to fill a 93,000 seat facility every night.

This season the attendance has been going up significantly in games not involving either team, so there's definitely hope on the horizon. They will never have the season ticket base of larger markets, so it depends on a lot on how competitive and entertaining the team is in terms of gate receipts.

Back when the team was competing in the playoffs consistently, they outdrew a lot of teams in the league, including the Leafs.

NHL 2005-06 team attendance at hockeydb.com

Attendance for the National Hockey League for the 2005-06 season

www.hockeydb.com

I think most teams will sell out or come close to it when the team is that competitive. Attendance when the team is bad tells a more interesting story.

I don't think Ottawa and Toronto should really be compared - after living in both cities, they are just so different. The areas surrounding Toronto are so densely populated and all of them are hockey insane - an insanity that runs down all the way to Atom AAA hockey.

Ottawa had a strong hockey following when I was there (Karlsson years) but it was definitely different.

 

[NyQuil]

Attendance when the team is bad tells a more interesting story.

It tells you how big the corporate season ticket base is.

 

[jbeck5]

Wayne Scanlan wrote an article a few years back in 2017 comparing corporate season ticket bases.

In Ottawa, it was 4,000 at the time compared with 13,000 in Toronto.

Given that it's a government town, and tickets cannot be purchased or even given to government employees as gifts, Ottawa has to rely exclusively on hockey fans to fill their building.

Scanlan: A breakdown of the Senators attendance issues in a challenging market

Fans and the hockey club grow weary of the topic.

ottawasun.com

So the Leafs just have to sell like 5,000 individual tickets a game, and can't do that every game?

Making sense of the Leafs’ recent drop in attendance

<a href="https://theleafsnation.com/2021/10/19/shesterkin-spoils-matth...

theleafsnation.com

Considering how much the leaf fans brag about their fan base, imagine having 5,000,000 people to buy 5,000 tickets and not being able to.

And then to go brag about attendance.

They should be embarrassed and remain quiet when it comes to attenance. It's clearly not a flex for them.

 

[Qward]

The valuation is because it is more than just the team in the deal.

The deal also includes all the land that is owned by the organization and includes the building of an arena/venue downtown.

A lot of bidders are property developers, who a little bird told me, plan on building the arena, developing the area, redeveloping the land the current arena is on then selling just the team in 5 years.
This is a property deal with an NHL team included to some of them.

This is why I want Ryan Reynolds buys the team. He wants the team to be the focus. Even though he is partnered with a developer...

 

[bert]

Their value is probably valued higher because it’s in Ontario.

A lot of hockey fans already in the area, and a ton of Leafs fans in Ottawa who take over when the Leafs are in town.

They’re probably hoping to create a competitive team and take over that fanbase. It could happen with the new generation, and lots of Leafs fans are glad to drive to Ottawa for cheap tickets, although I don’t know if tickets are still going to be super cheap (relative to Toronto) if it sells for 900M+.

Ottawa tickets are really cheap currently, bottom 5 in the league and the cheapest in Canada while being near the market with the most expensive, so it has huge potential if you can convert some of those fans.

HAHAHAHAHA. Its 2 games a year. Leaf fans never change. The arrogance is just unbelievable.

 

[Tufted Titmouse]

It tells you how big the corporate season ticket base is.

If that corporate base evaporated, do you think SBA would suddenly be down in the bottom 5 with Ottawa? I think you underestimate the region and it's hunger for all things hockey/Leafs.

 

[NyQuil]

So the Leafs just have to sell like 5,000 individual tickets a game, and can't do that every game?

Making sense of the Leafs’ recent drop in attendance

<a href="https://theleafsnation.com/2021/10/19/shesterkin-spoils-matth...

theleafsnation.com

Considering how much the leaf fans brag about their fan base, imagine having 5,000,000 people to buy 5,000 tickets and not being able to.

Well, the capacity is 18,819 (seats), so if the 2017 numbers still hold, they are selling 2,819 seats a game once the 13,000 in corporate season tickets and 3,000 individual season tickets are taken into account.

They have an additional ~1,500 standing room tickets.

 

[jbeck5]

I think most teams will sell out or come close to it when the team is that competitive. Attendance when the team is bad tells a more interesting story.

I don't think Ottawa and Toronto should really be compared - after living in both cities, they are just so different. The areas surrounding Toronto are so densely populated and all of them are hockey insane - an insanity that runs down all the way to Atom AAA hockey.

Ottawa had a strong hockey following when I was there (Karlsson years) but it was definitely different.

Doesn't Ottawa have the bigger minor hockey tournament with the bell Canada cup?

Proportional to population, the Ottawa area produces more NHL talent than Toronto per capita. Ottawa produces like 1/3 of the NHL talent of Toronto while being 1/5 of the population. I'll try to find the article.

 

[Tufted Titmouse]

A lot of bidders are property developers, who a little bird told me, plan on building the arena, developing the area, redeveloping the land the current arena is on then selling just the team in 5 years.
This is a property deal with an NHL team included to some of them.

This would be a dream come true in Ottawa. It would be so good for the fans but also the city IMO. I know when I lived in Vanier, I would have killed to be able to take a bus downtown to watch a game. The idea of spending an hour on the 417 just made it into a chore.

 

[NyQuil]

If that corporate base evaporated, do you think SBA would suddenly be down in the bottom 5 with Ottawa? I think you underestimate the region and it's hunger for all things hockey/Leafs.

I think you underestimate what it's like to be living in the sixth largest regional area in North America.

As I said, hunger is relative. I struggle to imagine Toronto selling out a 93,000 seat arena every night, which would be the size of Scotiabank Arena if populations were normalized between Ottawa and Toronto.

The real question here is why the NYC area has 3 teams and Toronto has 1. But that will never change.

 

[Tufted Titmouse]

Well, the capacity is 18,819 (seats), so if the 2017 numbers still hold, they are selling 2,819 seats a game once the 13,000 in corporate tickets and 3,000 individual tickets are taken into account.

They have an additional ~1,500 standing room tickets.

Why is this comparison even relevant?

I also can't for the life of me understand why these two fanbases would be at arms over something that extends way beyond hockey. Hate each other on the ice, sure, but arena issues and development potential are bigger than hockey.

 

[NyQuil]

Why is this comparison even relevant?

I also can't for the life of me understand why these two fanbases would be at arms over something that extends way beyond hockey. Hate each other on the ice, sure, but arena issues and development potential are bigger than hockey.

Ask your friend who jumped into a thread about the sale of the Senators and immediately made it about the Toronto Maple Leafs.

Rent free indeed.