Ottawa Senators bidding war about more than sale price
NHL team could be sold near $1B with multiple groups submitting their bids
As competitors jockeyed to get an edge over their rivals in the final hours before the Monday bidding deadline — all for the crown jewel of owning the Ottawa Senators — the team's original owner says the race has blown wide open.
Bruce Firestone, whose group bought the Sens 33 years ago as an expansion franchise for $50 million, guessed last week that the team would end up selling for $1.1 billion.
News then broke that a bid connected to actor Ryan Reynolds reportedly fell through, upending predictions and making Firestone cut back his forecast.
"Now I'm going to reduce that to a round number like a billion, simply because Mr. Reynolds and the Remington Group have dropped out," said Firestone.
"That may moderate the price."
The bidding groups connected with rapper Snoop Dogg, musician the Weeknd and various billionaires and real-estate moguls are no doubt weighing the implications and adjusting their numbers. There are reportedly six bids in total, each playing for more than money, according to Firestone.
It's also about prestige.
"If you understand the psychology of billionaires, they don't like losing and they don't like being shown up," he said. "Their competitive instincts are aroused. They hate losing."
What it takes to win
In the end, any prospective owner is unlikely to score the team without the go-ahead from NHL commissioner Gary Bettman, who Firestone expects is keeping a "scorecard" to rank the bids.
"Pretty much nothing happens in the NHL without Mr. Bettman being onside," said Firestone.
In his view, Bettman's scorecard will rank the bids on financial depth, business acumen and real estate chops, but also on less tangible measures like trust, reputation and celebrity buzz.
"He will be looking for somebody who's not going to embarrass the national league," said Firestone. "They're looking for a cultural fit."
Moshe Lander, a sports economist at Concordia University and a die-hard Sabres and Flames fan, thinks the celebrity bids have a definite edge over opponents who can't possibly generate the same amount of enthusiasm from fans.
"The other four are probably an irrelevance. Otherwise they would recognize the value in trying to build their own hype," he said. "They haven't built the fan interest."
Still, they could win if they put up a considerably bigger number. Forbes recently valued the Senators at $800 million, but news of the pending sale has raised expectations for a sale about the $1 billion mark.
According to Lander, that comes from taking the $900-million deal for the Pittsburgh Penguins in 2021, in a similar hockey market, and factoring in inflation. Speaking before the news of the dropped bid, he guessed the final number will be $1.2 billion.
The current owners of the team, the daughters of late owner Eugene Melnyk, are no doubt focused on that bottom line. But Lander agreed with Firestone that much more is at play when the league decides whether to approve the deal.
"Money is a major consideration, but it's not the only consideration," he said.
According to Lander, the bidders will have to show they can come up with more than $1 billion, and explain where it is coming from. They will need another $800 million or so to finance a new arena, and enough to cover day-to-day operations.
They will also have to prove they're in this for the long haul.
"What you don't want is an ownership group that comes in and then within a year is saying, 'We can't make it work in this market; we want out of here,'" Lander said.
"What you want then is to make sure that they have some kind of link to the local community."
Celebrities could be 'the cherry on top'
Mayor Mark Sutcliffe said he has met with six or seven different interested parties, and called the level of interest "a tremendous vote of confidence for the City of Ottawa."
Despite those meetings, Lander said the city's influence on the decision will be minimal.
Fan interest could help tip the scales, though. For Tandy Thomas, an associate professor of marketing at Queen's University's Smith School of Business, the celebrity connections are the "cherry on top" for the bids associated with the Weeknd and Snoop Dogg.
If the numbers are close, the marketing advantages of a star could make the difference.
But not all celebrities are created equal. She said the league will want to strike a balance between someone who appeals to the existing fan base while also attracting new audiences to get excited about hockey.
It's a delicate balance, since hockey fans aren't just normal customers.
"This isn't the same as buying toothpaste or just really liking a brand. For a lot of the loyal Senators fans this is part of their identity," she said. "They don't view the team as just something someone else owns. This is their team, this is who they are, this is who their family is."
Thomas thought Reynolds seemed like the obvious choice on that score, given his childhood ties with Ottawa. Aimee Deziel, who was the chief marketing officer for the Senators from 2018 to 2019, agrees. She said he "checks all the boxes."
If she were still in her old role, she would have been secretly hoping for the Reynolds bid to succeed.
"Having someone like Ryan Reynolds come on board is essentially being given a gift and that gift is a rainbow unicorn," she said.
"He's a perfect little package in terms of being Canadian, being highly likable, having tremendous business acumen and the fact that he's got a connection to the actual market."
By contrast, the other bids aren't so obvious. Snoop Dogg, in particular, would cause her "some trepidation." He might work well in Los Angeles or Chicago, but the Ottawa hockey market is more conservative in her view.
"Snoop Dogg probably has the most uneven reputational report card," she said, adding his song lyrics and his association with drug culture would make her worry.
[The sale] will happen very, very fast.- Moshe Lander, Concordia University
He's also American, and the bid with Los Angeles-based Neko Sparks feels like an American bid. That could be a hurdle for him to appeal to Canadian fans who view hockey as a sacred national symbol.
The Scarborough, Ont.-born Weeknd, even without clear Ottawa connections, doesn't face the same challenge.
The NHL has also prioritized appealing to more diverse audiences, she noted, and either celebrity would be an invaluable megaphone to reach them.
"The cool thing about Snoop and the Weeknd is they potentially have the opportunity to expose hockey to groups who aren't necessarily associated with hockey, or don't necessarily grow up having hockey as part of their culture," she said.
Decision expected quickly
Lander expects the competitors to have spent the final days before the deadline in contact with the NHL office, lobbying for their bid and trying to sound out Bettman and the governors for hints about where they should set their offers.
He expects the decision on the winning bid should come soon, given all of the tasks that will be awaiting the new owners. There are free agents to worry about and the NHL draft is mere weeks away.
"It needs to happen right away," Lander said of the decision. "You can't hamstring the franchise by letting all of these players walk or not signing anyone ... because nobody knows who is running the show.
"It will happen very, very fast."
Corrections
- A previous version of this story said Lander was a Blues fan. He is, in fact, a Sabres fan.May 15, 2023 3:35 PM EDT
ABOUT THE AUTHOR
