News Article: Forbes NHL Valuations - Sens ranked 26th at $445 mil

[Micklebot]

NHL’s Most Valuable Teams 2019: Though Buried In Standings, New York Rangers Remain On Top

The Business Of Hockey

Ottawa Senators on the Forbes The Business of Hockey List

Ottawa revenue somehow went up compared to the previous year for the 2018-19 season.

Got to admit, I expected a drop in revenues given we saw attendance drop ~7% or so, I guess maybe refinancing of the debts might be considered (they say revenue and OI are the net of rev sharing and arena debt servicing, but I've never been clear on what they count as arena debt servicing).

Click to read more...

 

[thinkwild]

That is somewhat unexpected that the valuation went up last year. Perhaps it has something to do with staggered revenues on the tv deal or increased revenue sharing. When Melnyk bought the team, my memory is that Ottawa was 3rd from the bottom in value. And he bought the team for a $90 mil value or so? And it is now $445? Not bad. Better rate than my craptastic investments have done. But I guess that’s tracking close to the stock market indices? And yet im sure we will be spared no reprieve from more woe is me cries from owners around the league.

 

[supsens]

NHL’s Most Valuable Teams 2019: Though Buried In Standings, New York Rangers Remain On Top

The Business Of Hockey

Ottawa Senators on the Forbes The Business of Hockey List

Ottawa revenue somehow went up compared to the previous year for the 2018-19 season.

Got to admit, I expected a drop in revenues given we saw attendance drop ~7% or so, I guess maybe refinancing of the debts might be considered (they say revenue and OI are the net of rev sharing and arena debt servicing, but I've never been clear on what they count as arena debt servicing).

I think I read his TV deal increased over time when it was signed, that could help with makin bacon

 

[slamigo]

ooof, those gate receipts look low. But holy moly, look how bad it is in Florida. Why do they have a team?

 

[Senscore]

ooof, those gate receipts look low. But holy moly, look how bad it is in Florida. Why do they have a team?

Loss leader to sell box seats for the arena.


Anything they pull in from the team is effectively a bonus.

 

[Do Make Say Think]

Less than an expansion fee

 

[Gil Gunderson]

Less than an expansion fee

That goes for most of the league.

 

[GCK]

NHL’s Most Valuable Teams 2019: Though Buried In Standings, New York Rangers Remain On Top

The Business Of Hockey

Ottawa Senators on the Forbes The Business of Hockey List

Ottawa revenue somehow went up compared to the previous year for the 2018-19 season.

Got to admit, I expected a drop in revenues given we saw attendance drop ~7% or so, I guess maybe refinancing of the debts might be considered (they say revenue and OI are the net of rev sharing and arena debt servicing, but I've never been clear on what they count as arena debt servicing).

This is excellent news if accurate.

1. With Lebreton being toast it resets the franchise value. Melnyk and the league can no longer expect 600M USD. 450-475M USD should do it.

2. There is 20M in gate less than Winnipeg with same revenues. Lots of revenue growth, although that also lowers revenue sharing piece.

3. Confirms what I heard about Melnyk not losing money. This is key as he wants to tie payroll to revenue. We can run near the floor with a half empty building. This shows us that there is potential to get to the cap.

 

[Gil Gunderson]

This is excellent news if accurate.

1. With Lebreton being toast it resets the franchise value. Melnyk and the league can no longer expect 600M USD. 450-475M USD should do it.

2. There is 20M in gate less than Winnipeg with same revenues. Lots of revenue growth, although that also lowers revenue sharing piece.

3. Confirms what I heard about Melnyk not losing money. This is key as he wants to tie payroll to revenue. We can run near the floor with a half empty building. This shows us that there is potential to get to the cap.

The team itself is losing money though. I don’t think the he operating income includes debt expenses, which are mostly his fault.

 

[GCK]

I promise he is not losing money.

 

[Sens]

No way he’s losing money... his tsn deal covers player expenses

 

[TheDebater]

That is somewhat unexpected that the valuation went up last year. Perhaps it has something to do with staggered revenues on the tv deal or increased revenue sharing. When Melnyk bought the team, my memory is that Ottawa was 3rd from the bottom in value. And he bought the team for a $90 mil value or so? And it is now $445? Not bad. Better rate than my craptastic investments have done. But I guess that’s tracking close to the stock market indices? And yet im sure we will be spared no reprieve from more woe is me cries from owners around the league.

Just going by memory but I recall he purchased both the team and the arena for $130 million?

 

[Micklebot]

This is excellent news if accurate.

1. With Lebreton being toast it resets the franchise value. Melnyk and the league can no longer expect 600M USD. 450-475M USD should do it.

2. There is 20M in gate less than Winnipeg with same revenues. Lots of revenue growth, although that also lowers revenue sharing piece.

3. Confirms what I heard about Melnyk not losing money. This is key as he wants to tie payroll to revenue. We can run near the floor with a half empty building. This shows us that there is potential to get to the cap.

The difference between us a winnipeg is our regional tv deal. Odds are they will get a better deal when they renew and ours is coming up and we are unlikely to get as good of a deal this time around, at least not relative to what other team are getting.

The big lesson to me is valuations are pretty resistant to the kind of turmoil we are currently going through. If the league is healthy so will be our valuation

 

[Do Make Say Think]

That goes for most of the league.

Probably should have clicked the link

 

[thinkwild]

Just going by memory but I recall he purchased both the team and the arena for $130 million?

Yeah that sounds about right. So Melnyk got a $190 mil arena out of bankruptcy for about $30 some mil. I think the team itself, using Forbes' numbers at that time, was valued around $90 some mil down in the bottom 3 with Cal and Edm i think it was. So relatively speaking this remains one of the least valuable franchises. The laments from ownership remain constant. The battle for season ticket sales continues. Valuations continue to rise like a good stock market investment.

 

[Spartachat]

Just going by memory but I recall he purchased both the team and the arena for $130 million?

The arena is apparently quite profitable as well.

 

[Beville]

He won’t be selling soon then...

 

[GCK]

He won’t be selling soon then...

Don’t be so sure. It’s a matter of picking the optimum time and having offers.

 

[Micklebot]

Yeah that sounds about right. So Melnyk got a $190 mil arena out of bankruptcy for about $30 some mil. I think the team itself, using Forbes' numbers at that time, was valued around $90 some mil down in the bottom 3 with Cal and Edm i think it was. So relatively speaking this remains one of the least valuable franchises. The laments from ownership remain constant. The battle for season ticket sales continues. Valuations continue to rise like a good stock market investment.

I looked up the 2003 forbes numbers an oh how times change... edmonton was the least valuable franchise in the league ottawa was a ways up (this was probably the year after the one you are thinking as they were up to 117 m a gain of 23% after melnyk purchased them. Calgary was low on the list and had that terrible horse logo and the preds logo looked like it was drawn by a 3rd grader

 

[Xspyrit]

I don't see why this is good news, Melnyk turned down higher offers from Quebec people. I don't remember the numbers but was he not looking for 700 M$? Yeah we're screwed

The difference between us a winnipeg is our regional tv deal. Odds are they will get a better deal when they renew and ours is coming up and we are unlikely to get as good of a deal this time around, at least not relative to what other team are getting.

The big lesson to me is valuations are pretty resistant to the kind of turmoil we are currently going through. If the league is healthy so will be our valuation

Yeah, well that's why I was insisting last year that this "not attending games" movement was just going to be "un coup d'épée dans l'eau". Actually, I'm kinda convinced that Melnyk just lowered his salary expenditure even more to avoid the effect of the attendance decrease since it was to be expected when you trade your stars for futures

 

[Micklebot]

Yeah, well that's why I was insisting last year that this "not attending games" movement was just going to be "un coup d'épée dans l'eau". Actually, I'm kinda convinced that Melnyk just lowered his salary expenditure even more to avoid the effect of the attendance decrease since it was to be expected when you trade your stars for futures

Lowered attendance probably will impact negotiations with sponsors. That will take time to have an impact. The 8 mil or so difference thar 13k vs 17k average attendace makes is easy enough to mitigate short term with adjusting player expenses, but i doubt runnunig the buisiness that way long term in this market is sustainable

 

[GCK]

I don't see why this is good news, Melnyk turned down higher offers from Quebec people. I don't remember the numbers but was he not looking for 700 M$? Yeah we're screwed



Yeah, well that's why I was insisting last year that this "not attending games" movement was just going to be "un coup d'épée dans l'eau". Actually, I'm kinda convinced that Melnyk just lowered his salary expenditure even more to avoid the effect of the attendance decrease since it was to be expected when you trade your stars for futures

The only reported offer was the one he told to the BoG which was rumoured to be in the 400s.

 

[GCK]

Lowered attendance probably will impact negotiations with sponsors. That will take time to have an impact. The 8 mil or so difference thar 13k vs 17k average attendace makes is easy enough to mitigate short term with adjusting player expenses, but i doubt runnunig the buisiness that way long term in this market is sustainable

I personally know of 3 spinners who pulled out this summer. 1 was medium sized, the other 2 were modest. They say they weren’t the only ones. Another company I know renegotiated their quid pro quo agreement with the team. They were providing a service to the team and receiving suite/tickets as payment. The agreement lasted for years but this deal was reworked as the value of the in house ads is much less at 11K per game than the 17K from years ago.

 

[Micklebot]

I personally know of 3 spinners who pulled out this summer. 1 was medium sized, the other 2 were modest. They say they weren’t the only ones. Another company I know renegotiated their quid pro quo agreement with the team. They were providing a service to the team and receiving suite/tickets as payment. The agreement lasted for years but this deal was reworked as the value of the in house ads is much less at 11K per game than the 17K from years ago.

Yep, those sponsors pulling out should show up on next year's Forbes estimates.

 

[Xspyrit]

Lowered attendance probably will impact negotiations with sponsors. That will take time to have an impact. The 8 mil or so difference thar 13k vs 17k average attendace makes is easy enough to mitigate short term with adjusting player expenses, but i doubt runnunig the buisiness that way long term in this market is sustainable

Of course, at this point I have absolutely no idea what Melnyk wants to do. He wants to sell high but his asset is not worth that actually. His plan is probably to clear debt, get an arena downtown while rebuilding with a new (cheaper) core of young players and then sell when the team is on the rise. However, doesn't look like his plan is going well.

The only reported offer was the one he told to the BoG which was rumoured to be in the 400s.

Frankly I don't even remember that clearly (I guess age is catching up on memory lol) but rumours here from Montreal were at least 2 offers of 450 M$+. Hard to know when it's rumors but some pretty credible sources talked about it. Anyway, don't care much about rumors, team still isn't sold.