Tuesday, Sportico surprised many in the Ottawa market when they reported that the Senators had hired a company with the intention of selling the NHL franchise.
After years of speculation about the property situation in Ottawa, it finally seemed like tangible news on an elusive topic.
In the hours that followed, Athleticism spoke to three people with direct knowledge of the situation, who requested anonymity as they are not authorized to share details of this process. All three confirmed that an outside firm had been retained to assess the value of the Senators franchise and explore the possibility of the team being sold.
When contacted for a response to this story, the Ottawa Senators declined to comment on Tuesday.
But this is clearly a story with significant traction.
Where is the sales process at the moment?
A source summarized the situation using a very simple real estate analogy.
Although the “For Sale” sign is not officially on the lawn of the Canadian Tire Centre, the Senators essentially ask a real estate agent to actively appraise the value of their home. And they’ve quietly let some potential buyers know that their home will hit the market soon.
Multiple sources said a more formal public announcement that the Senators are officially for sale is expected to take place this month. And at that time, the team will officially be on the market.
Who oversees this process?
The Senators have reached an agreement with a New York-based firm to assess the value of the franchise and explore a potential sale.
The Galatioto Sports Partners website notes that the firm has overseen “engagements in more than 100 transactions in major U.S. professional sports leagues as financial advisor, arranger and agent.” The Ottawa Senators are listed as one of their top clients.
Will the team stay in Ottawa?
Whenever there are rumors about the sale of a Canadian franchise, there will be rumors about a possible relocation to other markets.
Two of the sources who spoke to Athleticism says there are “several” groups willing to buy the Senators franchise and keep them in Ottawa. Both sources said potential buyers are extremely interested in the prospect of a downtown arena on LeBreton Flats.
In the spring, we quoted a source close to those ownership groups as saying there was “no scenario” where he could imagine the club leaving Ottawa. This same sentiment is true today.
The only time the NHL would consider moving is in a situation where no investors have stepped in to keep the team in Ottawa. And that’s certainly not the case in Ottawa.
Who are the potential new owners?
At this stage, potential ownership groups want to stay in the shadows as much as possible. In the past, Bettman has frowned on potential owners who start leaking information and speaking to the media before being officially vetted as an owner. Jim Balsillie — the brash, outspoken businessman who tried to buy the Coyotes and relocate them to Hamilton — serves as a cautionary tale for would-be new owners.
Roger Greenberg, executive chairman of the Minto Group and Ottawa real estate magnate, has publicly stated that his group would throw its name in the hat if the Senators were ever in the market.
“So yeah, we would probably participate, if it’s feasible, when the time comes,” Greenberg told CTV Ottawa in April when asked about his interest in buying the Senators.
Plus, there are several other groups — including one based in the Toronto area and others in the United States — that should be serious bidders once the process officially opens.
What is the potential sale price?
In his most recent NHL franchise ratings this week, Sportico listed the Senators with a value of US$655 million. That’s a jump of 21% from the publication’s previous valuation of the Senators — which was the biggest increase for any NHL team.
The Pittsburgh Penguins sold for $900 million in 2021.
If there’s a small bidding war for the Senators, it’s possible the price could be higher than many people had initially speculated.
There are outstanding debts that need to be repaid, but Melnyk’s estate should make a nice profit if he sells a majority stake in the franchise. Eugene Melnyk bought the Senators — and the club’s arena — for just under $130 million in 2003.
How is the LeBreton lawsuit considered?
There is still an outstanding legal wrinkle that could play a role in selling the franchise.
Eugene Melnyk, through his company Capital Sports Management, sued Trinity Development Group for $700 million over the failed arena project at LeBreton Flats in 2018. Trinity turned around and sued -suit for $1 billion and both sides engaged in a legal battle. from.
The next court date in this case is scheduled for January 3, 2023.
A new group of owners would no doubt like to have clarification on this situation before moving forward.
What is a realistic timeline for this to be completed?
The January 3 court date should not be viewed as a hard or fast deadline for the sale of the franchise.
It is believed that a realistic time frame for making a sale is between six and nine months. There’s a possible scenario where they agree in principle to sell the team sooner than that – but by the time all the paperwork is done, we’re probably looking at a spring or summer deal.
There are often invisible obstacles and red tape to clear in financial transactions of this magnitude, and the fact that Melnyk passed away in March – leaving his estate to handle the business – adds another layer of complexity to this situation.
—Athleticism‘s Katie Strang contributed to this story
(Photo: André Ringuette/NHLI via Getty Images)
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