No LeBreton News Does Not Quell the Optimism Moving Forward
The NCC held a meeting yesterday to update its board of directors on the request for interest to develop a major attraction on some dedicated acreage at LeBreton Flats.
After the request for submissions on February 28th, this was the first formal meeting where information would hopefully be disclosed, but yesterday’s events did not provide much insight into the process.
All that was revealed was that the NCC is doing its due diligence and is in the process of finalizing its list of preferred candidates. Once it has its list of finalists, the entity will have 60 days to negotiate with these groups.
The process calls for the NCC to sign a letter of intent with the preferred proponent. The board of directors and the public will then be informed of the decision in June.
Until that time, getting any kind of confirmation of which groups are involved is going to be difficult. The NCC has threatened to potentially disqualify any candidate that leaks information to the media.
With so much interest in the development of an arena for the Ottawa Senators at LeBreton Flats, yesterday’s lack of information is disappointing.
"It's not that we're trying to be secretive. It's really that we're trying to give this process the best chance of success moving forward," NCC CEO Tobi Nussbaum told reporters.
After the RendezVous group was named the preferred proponent in the last request for proposals and everyone watched the dissolution of the relationship between that group’s partners, who could blame the NCC for exercising more caution this time around?
It stands to reason that the Senators would have done the bare minimum and submitted a bid to keep the door open and at least ensure the possibility of developing a downtown rink.
The good news is that through the 2019 public consultations, an NCC report recognized that the majority of people want to see an arena on the site.
"The most frequently cited examples of a potential major attraction were a new hockey arena or major event centre. While there is not unanimous support for such a facility, it was the most frequently discussed topic."
Although most people in this city believe the Senators will eventually have a home downtown, the wrinkle is that there is uncertainty as to how to make that a reality.
There is no appetite for a publicly subsidized rink. While it is understood that the organization has most likely submitted a bid, as former RendezVous partner John Ruddy expressed in his countersuit against the late Eugene Melnyk, the assumption is that because the organization does not have the financial wherewithal to build its own rink, it wants to leverage the hockey club to any developer who will build the rink for them.
The problem right now is that with Melnyk’s passing, no one really knows how the uncertainty regarding the organization’s ownership situation can or will affect things moving forward.
Would prospective buyers submit bids of their own? Has the NHL held discussions with the NCC regarding the future use of the site? Will Melnyk’s daughters try and hold onto the team?
There are plenty of rumours out there in regards to how much debt the organization has accumulated and how prospective buyers are buying up the team’s debt. Bloomberg recently acknowledged that Ares Management “invested more than $1 billion in sports-related properties during the first half of last year” — including lending money to the Ottawa Senators.
If a lot of the debt is being refinanced at crazy interest rates, how long can the organization continue to operate as it currently is? If the daughters can be convinced to sell, they will probably want to ensure that the debt does not continue to swell. The smaller amount of debt that needs to be paid off, the greater return the daughters would receive.
To help boost that franchise value, the daughters (or any prospective buyer) will want to ensure that a new downtown arena is on the horizon.
In Forbes’ 2021 NHL Franchise Valuations, the publication believed that the Senators’ enterprise value was $525 million based on the current arena deal.
The legitimacy of Forbes’ figures has been called into question before, but it does not change the fact that from a franchise value perspective, a downtown arena would add a significant amount of value to the team.
In two months, we should have more insight into the organization’s future outlook. For the first time in a while, the optimism surrounding this team’s off-ice outlook is beginning to mirror the performance of this team’s young core. Thanks to Daniel Alfredsson’s return to the Canadian Tire Centre, the prospect of a new downtown home for the Ottawa Senators, and new ownership, the momentum is shifting.
For everything Senators fans have endured over the better part of the last 15 years, they deserve it.