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

[Silky Johnson]

Indeed. I used to work in corporate finance as well and the techniques you described is what I'd use to triangulate the base valuation. However we'd run a second exercise where we consider what changes the new asset managers could implement and what the impact on value is there. Often the original owners would have started some of the work that would lead to the new valuation and so there would typically be some adjustment upwards in the valuation based on how they've de-risked those changes from occurring.

The premiums that arise from owning a sports franchise likely come into play in the multiples valuation. If the franchise has done anything towards derisking the move downtown that would come in the second part I mentioned.

Though to be candid I've never done a valuation or acquisition involving sports teams so I could be completely out to lunch. That's just what my approach would be.

I agree that would be a correct approach in the "normal" business world and we do similar as well. In fact, sometimes the buyers have no idea what the true or entire value we see in an acquisition. Sometimes it is something like regulatory approval, market penetration or production capacity that we could leverage in a way the original owners never could that puts a deal over the top.

The fact that they are somewhat down the road on the Lebreton deal is the interesting part. I wonder if there is anything that they are seeing that would indicate the likelihood of additional acreage available for development. I could see new ownership wanting that to be conditional on building an arena. I could also see the government give agree, in lieu of other funding.

The redevelopment of the existing space is another important factor. I have no idea what the land potential there is but I imagine it to be significant to the right developer.

The new owner may be thinking of this completely as a land deal with a twist. Two amazing an unique opportunities at real estates developments but you have to put nearly a billion dollars down on a (historically) appreciating asset. Here is the twist, the asset is also something that is a super cool, once in a lifetime opportunity to own for the right person/people.

Really hard to put a valuation on this opportunity when considering the second part.