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

[Micklebot]

How many dates that weren’t Sens games, prior to Covid did the arena get booked.

We had 36 non hockey events in 2019, typically we'd get in around high 30s or low 40s.

I can't find it but I seem to recall back when the sens won the original bid, they were projecting 70+ events with the new venue downtown.

 

[Relapsing]

I have never heard of anything Neko Sparks has produced, directed, written, etc. Definitely not like the Kraken bringing in Jerry Bruckheimer. Honestly he seems like a more flash than substance tech entrepreneurial type. But I'm paywalled on the Mendes article and don't care enough to search more in depth, so I guess we'll see what happens if his group becomes a real contender for this.

I think it's safe to say bruckheimer was brought in due to his billion dollar worth vs his.... Movie production and direction credentials.

Or maybe it's because of Pirates of the Caribbean and the clear synergy of owning a team that's close to water.

Or maybe it's because he produces the amazing national treasure television series.

 

[SPF6ty9]

I think it's safe to say bruckheimer was brought in due to his billion dollar worth vs his.... Movie production and direction credentials.

Or maybe it's because of Pirates of the Caribbean and the clear synergy of owning a team that's close to water.

Or maybe it's because he produces the amazing national treasure television series.

For sure. And ya, Bruckheimer can do no wrong in my eyes after producing Top Gun, The Rock, Beverly Hills Cop, etc. Even Lone Ranger can be forgiven

 

[Relapsing]

For sure. And ya, Bruckheimer can do no wrong in my eyes after producing Top Gun, The Rock, Beverly Hills Cop, etc. Even Lone Ranger can be forgiven

Woah there.. Lone ranger was unforgivable trash. Ugh.

Man, forgot about the rock. What a movie! And maverick was an outstanding return to that franchise. The flight scenes are unreal

 

[Emerica]

Apparently they are 15 investors,. Seems like a bunch of millionaires getting together to play with the billionaires

I think the only similar sized group were the former owners in Nashville. Will be interesting to read who is all part of that group and if there are any big hitters

 

[Silky Johnson]

because mega bands do not want to be embarrassed by small attendance.

a band sends the roadies in on Thursday to set up. they arrive Thursday night to their hotel..
Friday morning, they are at the venue to rehearse and sound check..
Friday night is teh concert.
back to the hotel. Saturday, at the airport and gone

who cares where it is, what matters? 20 K screaming fans.

Will we get 20 K screaming fans 12-24 times..

an arena needs 3 nights a week of activity. 1 or 2 is the hockey team. That leaves 1 or 2 for other.. 75-80 dates of other...

I hope so...

I hoe everyone is right Mick. otherwise, the Euphorbia we feel now, will be replaced by Melnykian reality...

No. For 90% of Arena shows the tour arrives the morning of the event. Rigging goes in first, say 6am with local crew and puts in the motor points. Lighting, video and PA hangs happen next. Stage goes in before or after depending if tour is carrying.

Mid-afternoon audio/video/lighting operators are updating presets and ringing out the room. Late afternoon sound check, then a show. All gone in about 2 hours to do it again the next day.

Stadium shows are different as they often have huge sets that take days to set up. U2 once had 3 separate versions of their set leapfrogging to keep up the touring pace.

But we are talking about arena tours and they rarely big enough to require more then 20 hours in venue. Sometimes they have riggers leap frogging but that is usually only for longer drives.

There are also events like Disney on Ice, Superdogs, Cirque du Soliel, Broadway Tours ect. That set up for multi-day/week runs.

Ottawa is a decent market with a great geographical location for touring events.

The revenue for these events (rent & consession), in Kanata is already significant and will rise with a better location.

You will see from the below link that the Senators do not in fact lose Cash. They have historically a positive EBITDA.

Ottawa Senators operating income 2023 | Statista

The operating income of the Ottawa Senators franchise of the National Hockey League fluctuated between 2006 and 2023.

www.statista.com

That does not include non-hockey revenue which could easily be 15-30 million in EBITDA per year. Particularly in a better Arena.

Add the extra attendance and price increase revenue from a MUCH better location say 10% and you have a well above even Hockey Team.

Maybe the team will also get to have the marketing benefit of Ryan Renolds. Ask AC Wrexham what that is worth.

NOW HERE IS THE IMPORTANT PART.

The land in Kanata, that the organisation owns, can be redeveloped for a profit of hundreds of million of dollars.

The new owners will ask for additional land in Lebreton to redevelope (and will likely get it) for a potencial profit of 100s of millions more.

That is why so many real estate developers are in the bid.

At the same time, the value of the team is expected to continue to grow faster then inflation or interest rates.

It's also a vanity purchase for billionaires. It's cool and fun to own a pro sports franchise. Especially when the financials aren't that bad.

That is why smart and experienced people are interested in buying the team.

But you clearly know better..

 

[Silky Johnson]

keep it growing.

where where you when I needed you? When I ran this territory for a construction company... these numbers where so much less.

Hey Rod Bryden...tell me again about the Ottawa boom.. and how you declared bankruptcy a few months later..

NO.. it ain't. Unless every small town has doubled..

You likely are confused again.

Maybe you are thinking about Metro Ottawa with a population of 1.5 million.

He said Eastern Ontario (pop. 1.6M) and Western Quebec (pop. 0.4M) which most definitely has a population above 2 Million.

Google is a thing.

 

[Alfie11]

Apparently they are 15 investors,. Seems like a bunch of millionaires getting together to play with the billionaires

I think the only similar sized group were the former owners in Nashville. Will be interesting to read who is all part of that group and if there are any big hitters

Yeah not a big fan of a bunch of smaller investors teaming up. That is/was my concern with the Farm Boy people.

NHL is a big enough sport that you need real money and the ability to occasionally absorb some big losses to make it work.

 

[Silky Johnson]

That intuition or because you have experience in the industry?

I have a ton of experience in the industry. Albeit not in Canada recently.

Most big tours these days are bought out by Live Nation who acts as the promoter, ticket seller and often venue manager.

"Buying out" a tour means the promoter pays the band a set amount of money and they play a certain number of shows at the discretion of the promoter.

This can be done for large number of shows right down to one.

Very few bands self promote.

There are smart promoters and dumb promoters. Live Nation are a near monopoly because they are very smart.

Ottawa has a very good geographical location, say compared to othe Canadian and non-coastal American cities. Overnight bus ride from New York, Montreal, Toronto, Boston.

A promoter may want to squeeze in some extra revenue while in one of these markets and Ottawa could make logistical sense.

Ottawa is also the 44th largest metro market in Canada/USA so it is not insignificant. Comparables: Milwaukee, Raleigh and Memphis.

This is already happening now with the current Ottawa venues.

If the venue is better located and can draw more people, more dependably then more shows will be brought in.

The current largest indoor venue is in the middle of nowhere and is a negative draw relative. That definitely changes the profitability equation.

 

[Silky Johnson]

I know, but someone found it hilarious.

Anyways, they need to build this arena for access to legally tax free money...

It's not really tax free money, or at least in the way you implying.

Building the stadium is an actual input cost ie. Cost of Sale. Carrying forward capital loses in this case is normal and proper.

Think of it this way. If it costs you 50 dollars to build a widget and you sell it for 100 earning you 50.

Would you expect to pay tax on the 50 or 100? Of coarse its the 50.

The thing is a stadium plays out over a longer time frame and you dont realise your gains in the same period as your costs. That is why you can carry forward the capital loses. It is only fair.

It is essentially the same as any other Cost of Sale transaction.

Nobody spending any unnecessary amount of money building or repairing assets because of this. That would literally lose you the amount of cost that is unnecessary.

However, it can get dodgy when people...cough, cough...Donald Trump...manufacture "Paper losses" through techniques like Transfer Pricing or debt that is forgiven to some extent in the future, to carry forward the credit.

That is different because less money was actually spent then is being carried forward.

 

[Silencio]

Are developers really going to be lining up to pay $100 million for what will essentially be a bunch of parking lots on the edge of Kanata?

 

[Samboni]

I'm fine with Sparks and his group owning the team, as long as Reynolds is involved.

Reynolds must be involved in any group that wins. If not, big miss by the NHL.

This is Ottawa… where professional sports team ownership is always messy. There’s a good chance that you end up with Horn Chen v2, and Reynolds get shut out but signs on with another team.

 

[Nac Mac Feegle]

I think what people are missing why the new arena is critical to the sale of this team is the tax shelters that are inherent in that type of purchase.

If that arena costs 1B, they are going to deduct $40M plus a year from their bottom line. That, friends, is a lot. If the team makes 10-12M, they are keeping all of it and throwing those tax losses to another year. The owners will not pay tax for some time.

And don't be fooled about the viability of CTC, and it is at the end of its life blah blah blah. The end of the life after 40 years is because ...you guessed it...there is nothing left to write off! They will be paying tax as they are probably writing off a couple hundred grand per year, which is why they need to make capital improvements to create some expenses. That arena , that roof, etc...all that crap will be good for another 40 years, but it doesn't generate anything tax-wise for them

How is this kind of thing legal?

Feels like the super rich get a completely different set of rules from us little people.

 

[Nac Mac Feegle]

I have a ton of experience in the industry. Albeit not in Canada recently.

Most big tours these days are bought out by Live Nation who acts as the promoter, ticket seller and often venue manager.

"Buying out" a tour means the promoter pays the band a set amount of money and they play a certain number of shows at the discretion of the promoter.

This can be done for large number of shows right down to one.

Very few bands self promote.

There are smart promoters and dumb promoters. Live Nation are a near monopoly because they are very smart.

Ottawa has a very good geographical location, say compared to othe Canadian and non-coastal American cities. Overnight bus ride from New York, Montreal, Toronto, Boston.

A promoter may want to squeeze in some extra revenue while in one of these markets and Ottawa could make logistical sense.

Ottawa is also the 44th largest metro market in Canada/USA so it is not insignificant. Comparables: Milwaukee, Raleigh and Memphis.

This is already happening now with the current Ottawa venues.

If the venue is better located and can draw more people, more dependably then more shows will be brought in.

The current largest indoor venue is in the middle of nowhere and is a negative draw relative. That definitely changes the profitability equation.

What about high end hotels/motels in the area?

Iirc, that was supposed to be a factor several years ago regarding big name acts avoiding the city. That still true today?

 

[Micklebot]

Are developers really going to be lining up to pay $100 million for what will essentially be a bunch of parking lots on the edge of Kanata?

People who are connected, like Bruce Firestone, seem to think so.

I doubt they have any issues with the current land.

 

[coladin]

It's not really tax free money, or at least in the way you implying.

Building the stadium is an actual input cost ie. Cost of Sale. Carrying forward capital loses in this case is normal and proper.

Think of it this way. If it costs you 50 dollars to build a widget and you sell it for 100 earning you 50.

Would you expect to pay tax on the 50 or 100? Of coarse its the 50.

The thing is a stadium plays out over a longer time frame and you dont realise your gains in the same period as your costs. That is why you can carry forward the capital loses. It is only fair.

It is essentially the same as any other Cost of Sale transaction.

Nobody spending any unnecessary amount of money building or repairing assets because of this. That would literally lose you the amount of cost that is unnecessary.

However, it can get dodgy when people...cough, cough...Donald Trump...manufacture "Paper losses" through techniques like Transfer Pricing or debt that is forgiven to some extent in the future, to carry forward the credit.

That is different because less money was actually spent then is being carried forward.

Well , it actually is. Bottom line is, if the arena makes $30M CAD, they will have a depreciation expense that will wipe out the potential taxes owing, for a very long time. CTC has been expensed to the end of its "shelf life", because there is nothing wrong with the building. tax-wise, there is.

 

[coladin]

Are developers really going to be lining up to pay $100 million for what will essentially be a bunch of parking lots on the edge of Kanata?

Yes. They are not making new land!

 

[coladin]

How is this kind of thing legal?

Feels like the super rich get a completely different set of rules from us little people.

Think of it this way, the item or lcation that your purchased, is being used, and there is a cost to that. The asphalt. The roof. The floors. There is a cost to all that in the tax system. This isn't your home, it is a place of business.

 

[Masked]

Think of it this way, the item or lcation that your purchased, is being used, and there is a cost to that. The asphalt. The roof. The floors. There is a cost to all that in the tax system. This isn't your home, it is a place of business.

Plus depreciating assets over a fixed time period encourages businesses to invest in spending money to replace those assets.

Assen na yo!

 

[Golden_Jet]

Well , it actually is. Bottom line is, if the arena makes $30M CAD, they will have a depreciation expense that will wipe out the potential taxes owing, for a very long time. CTC has been expensed to the end of its "shelf life", because there is nothing wrong with the building. tax-wise, there is.

I’d disagree, sure some millions will come back after EBITDA. Plus any savings goes into new ice plant, roof, etc

But there will also be 30 million in interest a year to build the building to start.

 

[PoutineSp00nZ]

How is this kind of thing legal?

Feels like the super rich get a completely different set of rules from us little people.

Thats cause they do. The game is rigged

 

[coladin]

Thats cause they do. The game is rigged

Lol

 

[Mingus Dew]

Exhibit A: Housing supply is extremely limited and new development is not at the level it needs to be. Housing crisis no one can afford anything!

Exhibit B: Those rich developers get too many tax breaks that incentivize new construction. The game is rigged fix the tax system!

Make it make sense.

 

[Silky Johnson]

What about high end hotels/motels in the area?

Iirc, that was supposed to be a factor several years ago regarding big name acts avoiding the city. That still true today?

I'm not sure how that would be a factor. The Fairmont is a pretty nice hotel.

Most acts wouldn't be staying here anyways. If its a bus tour, they are staying on the bus a getting out of town immediately after strike.

If they are a huge act, they are flying out after the show.

 

[Silky Johnson]

Well , it actually is. Bottom line is, if the arena makes $30M CAD, they will have a depreciation expense that will wipe out the potential taxes owing, for a very long time. CTC has been expensed to the end of its "shelf life", because there is nothing wrong with the building. tax-wise, there is.

They will have depreciation expense until they exhaust the ACTUAL DEPRECIATION ammount.

They have to had paid that money in the first place. There is no benefit beyond not being charged tax on cost of sale, which no one is charged

If the venue paid back fully on the input costs plus 100million dollars in the first year - do you think they would be sad because they are paying taxes? Of course not! That would mean they made a profit.

Carrying forward losses only lasts as long as the losses - it is ultimately better to make profit.

There is no net gain as long as the losses are real.

You are probably thinking about how Trump carried forward losses to huge benefit.

He borrowed money, had huge losses, went bankrupt, had the dept from the loan mostly forgiven but still carried forward those huge losses to use against actually profitable enterprise. He only had a net gain because his dept was forgiven in the that scenario.