'Rock solid' arena deal key to keeping Sens in Ottawa, sports observer says

Amid reports that the owners of the Ottawa Senators are considering a sale, one sports observer says a "rock solid" plan to build a new arena at Lebreton Flats is needed to ensure the Sens stay put in Ottawa.

"That's the danger at this point. The Lebreton deal looks good, but it's not completely done yet," said Moshe Lander, an economics professor at Concordia University in Montreal.

Speculation about the future of the Senators began the moment the public learned owner Eugene Melnyk died in March at the age of 62 and his two daughters, Anna and Olivia, inherited the franchise.

Three months later, the National Capital Commission (NCC) announced it had signed a memorandum of understanding (MOU) with Capital Sports Development Inc., a group led by the Senators, to develop an NHL hockey arena and events venue surrounded by mixed-use development on Albert Street between Preston Street and City Centre Avenue.

The group's concept was still in the very early stages, the NCC stressed, with a goal of fall 2023 set for signing a long-term lease agreement.

On Wednesday, a spokesperson for the commission said its board expects to get an update on the project in January.

No appetite for setbacks

Lander said the MOU promises "stability" as a potential owner would be more likely to stay in Ottawa if there was a plan to move downtown, rather than buy a team in the suburbs "with no real direction."

He's hopeful local Ottawa groups will express interest in the team.

But things need to progress well beyond an MOU, and proceed smoothly, to attract serious suitors, he added.

"Anybody who's seeing this as an investment is not going to be able to pressure the NCC .... but they are certainly going to say, 'We're not putting up $700 million to find out that this thing is gonna fall through on some technicality or to find out that there's some sort of environmental impact assessment that says that the Lebreton Flats is dangerous,'" Lander said.

Ottawans know arena deals can fall apart, as they learned with the failed play for a Lebreton Flats arena back in 2018.

Calgary is a recent example of a city where a new arena project looked ready to go only to turn into a more protracted affair, Lander said.

"They're back to square one," he said.

"So it can drag and, depending on what ownership group comes forward, that itself could start posing some potential issues, especially if the ownership group is not from Ottawa."

Arena as public funding bargaining chip

Arena projects often see the proponents asking the city to chip in, and with Lebreton Flats falling on Crown land, the federal government, alongside the City of Ottawa, may be asked to help pay for a new Senators home — which will put further pressure on Ottawa to maintain its grip on the team, Lander said.

"Usually what the ownership groups will do is effectively blackmail, leverage, scare-tactic their way into getting that money by saying, 'If you don't give it, I bet you Houston would,'" he said.

"Quebec City has been sitting with an empty arena ready made for an NHL team for about a decade and they'd love nothing more than to jump in at the last minute and grab the Sens."

LISTEN | Sports economist Moshe Lander says the timing of ownership change would make sense

Ottawa's mayor-elect, Mark Sutcliffe, said in an emailed statement Wednesday that he does not support taxpayer money going toward the construction of a new arena, "regardless of its location."

Sutcliffe added that, like many Ottawa residents and Senators fans, he expects the NHL "to ensure any prospective new owner keeps our Senators in Ottawa."

The team's founder, Bruce Firestone, agreed.

"So as long as Gary Bettman is the [NHL] commissioner, in my opinion, the Senators are not going anywhere," Firestone said in an interview.

"When the senators went bankrupt, Gary went to bat for Ottawa; he wanted to keep a National Hockey League team in Canada's capital city. He's gone to bat for the Arizona Coyotes. He does not believe, and I agree with him, that franchises in any major league sports should be on roller skates. They should stay where they are."

In his statement, Sutcliffe said he supports relocating the Senators arena to Lebreton Flats from its current home at the Canadian Tire Centre in Kanata, "provided there is a strong plan to support local Kanata businesses that may be impacted by the move."

Firestone pointed to the repurposing of Toronto's Maple Leaf Gardens, the former home of the Toronto Maple Leafs, as an example of what can be done to help.

"It's got a Loblaws superstore in there [now]. There's the Mattamy Athletic Centre. There was a very good reuse of the arena," he said.

Who can afford the team? 

Sportico, a U.S. news outlet, reported on Tuesday that the Sens have hired Galatioto Sports Partners (GSP), a sport banking firm that acts as an arranger in sales of professional sports teams.

Late last year, Forbes Magazine estimated the team to be worth $525 million, up 22 per cent from a year before.

When the cost of a new arena is added, an incoming owner is easily looking at a total investment north of $1 billion, Firestone said.

That's why there will likely to be "a whole bunch of people [who] are going to have their hands all over the deal, to basically lend the ownership group the money to finance the purchase of the team," Lander said.

The pool of potential owners is "a very elite club," he added.

Firestone, who won the Senators franchise in 1990, said the days of an entrepreneur like him being involved in a major sports league are probably over.

"You need somebody who has resources and has other businesses that will support the team," he said.

Firestone said he believes there are some people in the Ottawa-Gatineau area who would quality as buyers.

"But it's not as a long list as you would find in Toronto," he conceded.