Strong local ties are needed in Senators' deal

The lack of a local connection matters because the hockey team's new owners have the power to make a consequential decision that will reshape Ottawa. Will the team build a new rink on Lebreton Flats, or possibly at city-owned Bayview Yards? Randall Denley

We don't know yet who the winning bidders for the Ottawa Senators will be, but we know who the new majority owners won't be: people who live here and care about our team and our city.

The billionaires and singers bidding to buy the team have no visible, meaningful connection to Ottawa. The closest to that was actor Ryan Reynolds, but the group he was associated with has pulled out of the ownership race.

Whoever wins the bidding will be another Mr. Big from somewhere else, most likely Toronto. At least that will be familiar for Senators' fans, who have been treated to the lovable Eugene Melnyk dropping in on our little town from time to time.

Out-of-town ownership is not the norm for Canadian teams in the NHL; quite the opposite. Every other team has local ownership. The one arguable exception is the Maple Leafs. The team is owned by Rogers and Telus, but at least Rogers is a Toronto-based company.

The lack of a local connection matters because the hockey team's new owners have the power to make a consequential decision that will reshape Ottawa. Will the team build a new rink on Lebreton Flats, or possibly at cityowned Bayview Yards?

Bayview is arguably the better location. The parcel available for development is larger and it has a better transit connection because it is at the junction of the north-south and east-west lines. There isn't anything we'd miss terribly on the site now and the city is likely to be easier to deal with than the rules-bound National Capital Commission.

If the rink did go to Bayview, it would open up, yet again, the question of a central attraction for Lebreton, a problem that has perplexed Ottawans for generations.

Either of those moves would be consequential for Kanata, home of the Canadian Tire Centre. What would become of the rink and the land that surrounds it?

This is a business deal, not a popularity contest.

It would certainly be better if the people making those decisions knew more about Ottawa than where to find it on a map. Ottawa's chance at significant local control over the new arena and what surrounds it was lost in 2018 when the partnership between Melnyk and Ottawa developer John Ruddy fell apart. With it went a made-in-ottawa plan for entertainment, residential and commercial development on Lebreton.

Despite the future uncertainty, Ottawans have been a bit giddy about the prospect of billionaires and actual celebrities wanting to own something here. While it might have made us feel special for a few minutes, don't take it personally. This is a business deal, not a popularity contest.

For that business deal to make sense, it will have to entail far more than buying the team and building a rink. It's not possible to spend $1 billion buying the Senators and up to $800 million building a rink, then make money, without something else going on.

Melnyk's experience demonstrates that. Twenty years ago, Melnyk bought the team and the arena for just under US$100 million. If it sells now for US$1 billion, it will seem like one heck of an investment, but the Senators' organization is believed to owe between $300 million and $450 million. The net capital gain will still be impressive, but the challenge is to make money operating an NHL team in a small market.

Melnyk struggled to cover the Senators' operating expenses because he didn't have other revenue streams. That's why a new rink in Ottawa will have to rely on money from surrounding development, unless the new owner simply doesn't care about incurring losses. While there is an ego component to owning a pro sports team, one doesn't become a billionaire by losing money.

All this is a reminder of just how unimportant local fans are in the whole NHL ownership equation. We think of the Senators as our team, but of course, they're not. We're just the people who have supported the team by buying tickets and showing up at games for the last 30 years.