Confirmed with Link: Senators are for sale - and it’s a Gong Show

[senswon]

Cmon Big Money....

 

[Beech]

So here are my concerns.

we are all caught up in the euphoria. But, what of reality!

Some group will pony up 1 billion. Be comprised of individuals worth billions.. why do we assume a treasure trove? and unlimited spending?

Ottawa is still 1-1.1 million people. Still 1.4-1.6 million people in eastern Ontario/Western Quebec. Still relatively low on corporate offices, and so reliant on walk up ticket sales.

Now, if this team flounders... and there is a chance.. see Vancouver 2012-2022 and namely years 2017-2019 when it was assumed they were out of the basement... Or Toronto where they have ascended to the upper tier, but have promptly lost in round one each and every year!! What then?

New owners paying 1 billion. Now turning their attention to Lebreton and another billion... can they afford a 10-20 Million a year loss?

We better be careful of the euphoria.. Less a solid 5-10 years of straight run of playoff appearances, out of which 1-2 SCFs and a total of 3-4 ECFs, it may not be as good as people assume. The Euge had that 2003/2004-2006/2007. Was still losing money. He bought for peanuts.

 

[BonHoonLayneCornell]

So here are my concerns.

we are all caught up in the euphoria. But, what of reality!

Some group will pony up 1 billion. Be comprised of individuals worth billions.. why do we assume a treasure trove? and unlimited spending?

Ottawa is still 1-1.1 million people. Still 1.4-1.6 million people in eastern Ontario/Western Quebec. Still relatively low on corporate offices, and so reliant on walk up ticket sales.

Now, if this team flounders... and there is a chance.. see Vancouver 2012-2022 and namely years 2017-2019 when it was assumed they were out of the basement... Or Toronto where they have ascended to the upper tier, but have promptly lost in round one each and every year!! What then?

New owners paying 1 billion. Now turning their attention to Lebreton and another billion... can they afford a 10-20 Million a year loss?

We better be careful of the euphoria.. Less a solid 5-10 years of straight run of playoff appearances, out of which 1-2 SCFs and a total of 3-4 ECFs, it may not be as good as people assume. The Euge had that 2003/2004-2006/2007. Was still losing money. He bought for peanuts.

Melnyk complained about year to year losses but obviously has done very well in the end with this sale price, so it leaves a lot of gray area around his grievances he had with the fan base and the revenue the team generated.

I'm confident simply because this new group is ponying up a biillion dollars. They will want, no, they will NEED this thing to succeed, which in the NHL we know requires cap spending for the most part. Same goes for the rink. These aren't dummies prepared to continue to flounder out in Kanata forever. We also know there was a lot of feuding with local entities that limited the franchises ability to generate interest and revenue.

And besides, a lot of the luster wore off with Melnyk because of his abrasive personality, transgressions, including the poor treatment of staff, and micro-managing hockey ops, so it seems unlikely to ever go that sour again as other franchises don't face those sort of issues typically.

 

[Burrowsaurus]

I wonder what HF will look like with new owners and management. Will there be a role reversal in peoples opinions? Or will it continue the same? This is going to be facinating. Lol.

Only two things drive opinion on ownership. Wins. And losses.

 

[IpsoPostFacto]

Graeme Roustan owns the hockey news, I think he used to own Bauer, not sure he does anymore

Idk who first Nation is though.

didn't Roustan write that article in THN sucking up to the Euge and calling fans jerks for wanting him to sell the team?

 

[BonHoonLayneCornell]

didn't Roustan write that article in THN sucking up to the Euge and calling fans jerks for wanting him to sell the team?

Here is a snapshot of said pro Melnyk propoganda.

 

[IpsoPostFacto]

Here is a snapshot of said pro Melnyk propoganda.

ya, that's the one. Doesn't really present as a bridge builder.

 

[BonHoonLayneCornell]

ya, that's the one. Doesn't really present as a bridge builder.

Enough in itself for me to hope he doesn't get involved.

 

[Beech]

Melnyk complained about year to year losses but obviously has done very well in the end with this sale price, so it leaves a lot of gray area around his grievances he had with the fan base and the revenue the team generated.

I'm confident simply because this new group is ponying up a biillion dollars. They will want, no, they will NEED this thing to succeed, which in the NHL we know requires cap spending for the most part. Same goes for the rink. These aren't dummies prepared to continue to flounder out in Kanata forever. We also know there was a lot of feuding with local entities that limited the franchises ability to generate interest and revenue.

And besides, a lot of the luster wore off with Melnyk because of his abrasive personality, transgressions, including the poor treatment of staff, and micro-managing hockey ops, so it seems unlikely to ever go that sour again as other franchises don't face those sort of issues typically.

interest on 2 billion dollars is 100 Million. A team to run at zero loses is ~ 130 million.

So, the revenue needed is 230 M to break even. 230 plus million to start paying off the 2 billion.

projections show that only 12 teams will generate this much or more by 2025. Ottawa's projected revenue (2021 estimate: Projecting 2021's richest NHL teams and their revenue by 2025) is 153 Million.

75 plus million will be needed!!!!! so a solid 10-20% increase in ticket prices, concession costs, parking, etc.. 100% sellouts and 2 rounds a year of playoffs!!!!!

I hope so.. otherwise the new group will be Eugene in nothing flat.

 

[Gil Gunderson]

Melnyk complained about year to year losses but obviously has done very well in the end with this sale price, so it leaves a lot of gray area around his grievances he had with the fan base and the revenue the team generated.

I'm confident simply because this new group is ponying up a biillion dollars. They will want, no, they will NEED this thing to succeed, which in the NHL we know requires cap spending for the most part. Same goes for the rink. These aren't dummies prepared to continue to flounder out in Kanata forever. We also know there was a lot of feuding with local entities that limited the franchises ability to generate interest and revenue.

And besides, a lot of the luster wore off with Melnyk because of his abrasive personality, transgressions, including the poor treatment of staff, and micro-managing hockey ops, so it seems unlikely to ever go that sour again as other franchises don't face those sort of issues typically.

It was 100% due to revenue. The majority of NHL owners barely care about year-to-year profits.

 

[Silky Johnson]

interest on 2 billion dollars is 100 Million. A team to run at zero loses is ~ 130 million.

So, the revenue needed is 230 M to break even. 230 plus million to start paying off the 2 billion.

projections show that only 12 teams will generate this much or more by 2025. Ottawa's projected revenue (2021 estimate: Projecting 2021's richest NHL teams and their revenue by 2025) is 153 Million.

75 plus million will be needed!!!!! so a solid 10-20% increase in ticket prices, concession costs, parking, etc.. 100% sellouts and 2 rounds a year of playoffs!!!!!

I hope so.. otherwise the new group will be Eugene in nothing flat.

You are incorrect in so many ways.

You are forgetting the land in Kanata. This will likely be developed by the new owners. They will make a bunch of money off that development.

The new owners will also very likely leverage their position to gain more development land at Lebreton. This is VERY valuable and they will likely make a lot of money off that.

Savy real estate developers could possible get the team for free, or at least at a greatly reduces price.

You are assuming that they will borrow to build the arena. Maybe they will, maybe they won't.

However, the team is an asset that has appreciated at well above 5% (well above 10% really) for a long time. That appreciation in value would offset cash losses. Unless they are very cash poor it won't be a problem.

You are also forgetting non-hockey revenue at the stadium. A downtown area building would so much better in that area as well.

There is a reason why there are multiple bids by people who are either very smart and experienced at this or can afford the advice of very smart and experienced people.

Did you think you figured out why they are all wrong and that we should all pannick?

 

[Beech]

You are incorrect in so many ways.

You are forgetting the land in Kanata. This will likely be developed by the new owners. They will make a bunch of money off that development.

The new owners will also very likely leverage their position to gain more development land at Lebreton. This is VERY valuable and they will likely make a lot of money off that.

Savy real estate developers could possible get the team for free, or at least at a greatly reduces price.

You are assuming that they will borrow to build the arena. Maybe they will, maybe they won't.

However, the team is an asset that has appreciated at well above 5% (well above 10% really) for a long time. That appreciation in value would offset cash losses. Unless they are very cash poor it won't be a problem.

You are also forgetting non-hockey revenue at the stadium. A downtown area building would so much better in that area as well.

There is a reason why there are multiple bids by people who are either very smart and experienced at this or can afford the advice of very smart and experienced people.

Did you think you figured out why they are all wrong and that we should all pannick?

because Eugene Melnyk would have had financial advisers as well. He would have ran in circles of bankers, real-estate developers, etc.

As such, if the financials had made sense, there was nothing stopping him from reaching out to partners..

The euphoria is predicated on a "spend it and they will come".. what gives people this impression? The Landsdown group worked on that premise... See that hell hole.

the Sens' generate between 130-135 M in a good year. At a salary base of ~ 70 M and at shoe string operating budgets. They lose, 5 M in a good year, 20 M in a real bad year.

So now, we go from 70 M to 83 M in salary and add another 5-10 M in operating... a jump of 18-23 M per year. Where does that money come from? Especially when the team will coast 1 B and financing in years 1 to about 5 will be 500 M at 5%.. so in years 1-5 interest on debt alone is 25 M. you may have potential jumped from 5-20 M in loses to 30-40 M.

A downtown arena is 4-6 years away.

It is not the CTC that keeps acts and other events away.. are you kidding? Everyone here has a car up his behind and another in his driveway. Getting to the CTC is not an issue!!! Plus 6-8 months are spring/summer/fall and so no real winter threat to worry about. We are not Iqaluit!!!

years 1-5 will be harsh, by years 6-10, you may have incurred such a debt that you will be doing nothing but paying interest.... The Euge went through this. What f'ed him? by year 10 at the helm ~ 2013... his interest payments mushroomed and the team stopped being in the playoffs. Now he was f'ed.

New owners may be far wiser business people than you think. And may realize that salary expenditure in the 70 M and 5-10 M shaving off of operating cost is wisest.

Early euphoria may just come head on with reality by year 2 or 3.

 

[Silky Johnson]

because Eugene Melnyk would have had financial advisers as well. He would have ran in circles of bankers, real-estate developers, etc.

As such, if the financials had made sense, there was nothing stopping him from reaching out to partners..

The euphoria is predicated on a "spend it and they will come".. what gives people this impression? The Landsdown group worked on that premise... See that hell hole.

the Sens' generate between 130-135 M in a good year. At a salary base of ~ 70 M and at shoe string operating budgets. They lose, 5 M in a good year, 20 M in a real bad year.

So now, we go from 70 M to 83 M in salary and add another 5-10 M in operating... a jump of 18-23 M per year. Where does that money come from? Especially when the team will coast 1 B and financing in years 1 to about 5 will be 500 M at 5%.. so in years 1-5 interest on debt alone is 25 M. you may have potential jumped from 5-20 M in loses to 30-40 M.

A downtown arena is 4-6 years away.

It is not the CTC that keeps acts and other events away.. are you kidding? Everyone here has a car up his behind and another in his driveway. Getting to the CTC is not an issue!!! Plus 6-8 months are spring/summer/fall and so no real winter threat to worry about. We are not Iqaluit!!!

years 1-5 will be harsh, by years 6-10, you may have incurred such a debt that you will be doing nothing but paying interest.... The Euge went through this. What f'ed him? by year 10 at the helm ~ 2013... his interest payments mushroomed and the team stopped being in the playoffs. Now he was f'ed.

New owners may be far wiser business people than you think. And may realize that salary expenditure in the 70 M and 5-10 M shaving off of operating cost is wisest.

Early euphoria may just come head on with reality by year 2 or 3.

Melnyk was narcissist and an idiot. He shit the bed with Biovail and was lucky to stay out of jail in 2011. He only got banned from being a part of publicly held companies by the SEC.

He tried to get the land deal done but couldn't because a. His personality defects and b. He is not a land developer.

He was also cash poor and had financial difficulties that would limit his ability to raise capital and had a personality that didn't lend itself to partnerships.

However, the Sens ended up being a great investment for him! With all his flaws.

You literally didn't address the meat of my comments.

What about non-hockey revenue? That alone likely wipes out all loses the hockey team has.

What about the land in Kanata?

What about the positive balance sheet from appreciation of the hockey assets?

What about the probability that the ownership group will be cash rich and more than able ride out the first couple years. Years that the Sens will likely have better attendance due to being a good team not owned by a pariah.

What about the landsdown real estate?

If you cannot see how a downtown arena would increase hockey revenue...Well I don't know what to say.

This is a situation of someone who has no business or finance knowledge weighing into subjects way above their head.

As many as 10 groups are seriously considering spending huge amounts of money to aquire the team, but you know better...

 

[Adele Dazeem]

You guys are failing to realize something important in all of this.
The revenue generated by a sports team is crap (actually anti-business) compared to other ventures. Billionaires don't buy sports team so that they can make profit of jersey sales...lol
The purchase is of the land - the real estate value of the surrounding - those will always hold up and will only be worth more when it's time to sell.
So, operating at millions at a loss is a normal happening, and one that these billionaires don't pay attention too - because they know that the losses they are taking (cents to dollars) will be meaningless when they sell the team for a large profit.

 

[Golden_Jet]

You guys are failing to realize something important in all of this.
The revenue generated by a sports team is crap (actually anti-business) compared to other ventures. Billionaires don't buy sports team so that they can make profit of jersey sales...lol
The purchase is of the land - the real estate value of the surrounding - those will always hold up and will only be worth more when it's time to sell.
So, operating at millions at a loss is a normal happening, and one that these billionaires don't pay attention too - because they know that the losses they are taking (cents to dollars) will be meaningless when they sell the team for a large profit.

While I agree there is not a lot of profit forking out a billion for an arena.

 

[Micklebot]

It is not the CTC that keeps acts and other events away.. are you kidding? Everyone here has a car up his behind and another in his driveway. Getting to the CTC is not an issue!!! Plus 6-8 months are spring/summer/fall and so no real winter threat to worry about. We are not Iqaluit!!!

Idk if it's still the case, but the promoters I knew and worked with back in the mid 2000's told me that the arenas location definately played into how many acts we could attract. Maybe it's better now, idk, my connections to that world are long gone, but acts didn't like coming here to play out in Kanata, just like NHL players don't care for coming to Ottawa, having a half hour drive to the hotel, then being out in Kanata after the game instead of more central.

 

[Silky Johnson]

You guys are failing to realize something important in all of this.
The revenue generated by a sports team is crap (actually anti-business) compared to other ventures. Billionaires don't buy sports team so that they can make profit of jersey sales...lol
The purchase is of the land - the real estate value of the surrounding - those will always hold up and will only be worth more when it's time to sell.
So, operating at millions at a loss is a normal happening, and one that these billionaires don't pay attention too - because they know that the losses they are taking (cents to dollars) will be meaningless when they sell the team for a large profit.

That is exactly what I am saying about the balance sheet. The appreciation of the asset is a huge part of the equation.

In this case the real estate value has the potencial for impact sooner. The land in Kanata could be redeveloped once an other arena is built, say five years.

If they can leverage more land as part of Lebreton, that can have a even quicker financial impact.

This particular deal has greater than usual potencial for additional benefit.

Some sports teams however are good investments from a cash perspective. Toronto ML, Rangers, Habs, some baseball clubs and alot of NFL teams have huge EBITDA. They generate tonnes of cash while appreciating like crazy. They are great businesses by any perspective.

 

[Silky Johnson]

Idk if it's still the case, but the promoters I knew and worked with back in the mid 2000's told me that the arenas location definately played into how many acts we could attract. Maybe it's better now, idk, my connections to that world are long gone, but acts didn't like coming here to play out in Kanata, just like NHL players don't care for coming to Ottawa, having a half hour drive to the hotel, then being out in Kanata after the game instead of more central.

What are the three most important things in real estate? Location, location, location. This definitely applies here as well.

All the most successful live event locations have great locations. Why do you think they don't do Bluesfest in a field in Almonte? It would be much cheaper.

I know lots of people at Live Nation through work. I could confirm this by comparing rents for downtown vs suburban venues. However it would be a huge waste of time because it is so obviously true.

Your promoter friend was completely right.

 

[Golden_Jet]

That is exactly what I am saying about the balance sheet. The appreciation of the asset is a huge part of the equation.

In this case the real estate value has the potencial for impact sooner. The land in Kanata could be redeveloped once an other arena is built, say five years.

If they can leverage more land as part of Lebreton, that can have a even quicker financial impact.

This particular deal has greater than usual potencial for additional benefit.

Some sports teams however are good investments from a cash perspective. Toronto ML, Rangers, Habs, some baseball clubs and alot of NFL teams have huge EBITDA. They generate tonnes of cash while appreciating like crazy. They are great businesses by any perspective.

Ya NFL is for sure , when TV money is more than the salary cap.

 

[Sun God Nika]

I am fairly confident if we had a stadium downtown rather than Kanata more big names would visit ottawa more frequently , it might be the weekday stop between Montreal and Toronto shows

 

[Silky Johnson]

Ya NFL is for sure , when TV money is more than the salary cap.

Yeah. Most owner friendly league in the world by miles.

Leafs, Habs & Rangers are very healthy businesses as well.

 

[Beech]

Idk if it's still the case, but the promoters I knew and worked with back in the mid 2000's told me that the arenas location definately played into how many acts we could attract. Maybe it's better now, idk, my connections to that world are long gone, but acts didn't like coming here to play out in Kanata, just like NHL players don't care for coming to Ottawa, having a half hour drive to the hotel, then being out in Kanata after the game instead of more central.

Mick,

basic math: Eastern Ontario/north western Quebec... 1,5 million people.. Those of Franco heritage and live East of Ottawa, will opt for Montreal. I have ties to Cornwall, most Cornwall residents see Montreal as their "going out option".

We are talking 1,1 M left.

dismiss younger than 14.. they are not about to go to a Maroon 5 concert..not without Mom or Dad... Now dismiss 75 and over... at the risk of causing a shit storm, lets be real.

so out goes 30%..add the injured, the handicapped...knock off a further 5%

net total ~ 700,000 people, hale and in the 15-75 age group.

now the hard analysis: $200 a ticket for a concert...$20-$30 to park, $20-$50 inside on stuff. we are talking a $600 outing... How many people can afford that... 50% of society.

so ~ 350,000 people.

Now account for taste, for activity (concert versus theatre, versus a boat show, versus a circus, versus the ice capades)... in a big picture sense you can divide that number in 5 to 6 to account for global interest.

350,000 becomes 60,00-70,000

so a concert will have 60,000 to 70,000 possible fans... needing 15,000 to 20,000 to fill a place....means 1 in 3 to 1 in 3 1/2 people. so imagine a rock concert a month... you are asking that 70,000 to attend 3 concerts a year...each...at $600 a pop.. or ~ $1800.

By comparison, Montreal, Toronto and Vancouver are in the 1:10 to 1:20... you now ask a concert goer to attend 1/2 to 1 concert a year at $600....

 

[Beech]

That is exactly what I am saying about the balance sheet. The appreciation of the asset is a huge part of the equation.

In this case the real estate value has the potencial for impact sooner. The land in Kanata could be redeveloped once an other arena is built, say five years.

If they can leverage more land as part of Lebreton, that can have a even quicker financial impact.

This particular deal has greater than usual potencial for additional benefit.

Some sports teams however are good investments from a cash perspective. Toronto ML, Rangers, Habs, some baseball clubs and alot of NFL teams have huge EBITDA. They generate tonnes of cash while appreciating like crazy. They are great businesses by any perspective.

did you see the stuff Elliot Freedman was putting out this weekend.

Early bids and early numbers being floated about by perspective buyers where way lower than the 1 billion.

Someone pulled a Cleveland Browns and Desawn Watson on then and skyrocketed the number!!!

The Melnyk girls' are going to love them for it... Let see everyone lese... Ask Baltimore and Lamar Jackson.

 

[Crosside]

did you see the stuff Elliot Freedman was putting out this weekend.

Early bids and early numbers being floated about by perspective buyers where way lower than the 1 billion.

Someone pulled a Cleveland Browns and Desawn Watson on then and skyrocketed the number!!!

The Melnyk girls' are going to love them for it... Let see everyone lese... Ask Baltimore and Lamar Jackson.

Friedman said one bid around 925 m Close to 1b for me

 

[Micklebot]

Friedman said one bid around 925 m Close to 1b for me

I think he was referring to way back at the start of the process before it was even confirmed they'd be selling, speculation had a sale pegged in the 600-700 range, it's since skyrocketed