Tuesday October 3, 2023

Ottawa Senators Fetch Record For NHL Franchise of Nearly $1B

  • The Senators went on the market in November, months after death of owner Eugene Melnyk.
  • In the weeks ahead, the NHL will review the agreement before an ownership vote.
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The Ottawa Senators have a new owner after seven months on the market. 

Montreal Canadiens part-owner Michael Andlauer came to a final agreement to purchase the Senators, Front Office Sports has confirmed.

A deal is now expected to be announced imminently by the NHL, the estate of late team owner Eugene Melnyk, and Galatioto Sports Partners, the New York-based firm running the sale.

The sale price, which is nearly $1 billion, is a new record for an NHL franchise sale, topping the $900 million paid by Fenway Sports Group in 2021 for the Pittsburgh Penguins.

Three groups were left in the running entering the week — a process that had gone too slowly for fans of the franchise and frustrated even some of the bidders. Toronto businessman Steve Apostolopoulos was the most recent bidder to exit last week.

Neko Sparks’ bid to become the league’s first Black majority owner fell short. The Los Angeles businessman’s contingent includes rapper Snoop Dogg, and Canadian Olympic gold medalist Donovan Bailey among others, who are part of an ownership group that is about 75% people of color. 

“I think there needs to be a recognition that buying a billion-dollar asset isn’t like buying a new car. It takes a little more due diligence and work,” NHL Commissioner Gary Bettman told reporters on June 3. “I also think, most times when a franchise is being sold, we don’t know about it until it gets to the end.

“Eugene Melnyk’s untimely passing sort of began the clock running. That’s why, in some quarters, there is fatigue covering this. There shouldn’t be.”

Melnyk purchased the Sens and the team’s home arena in suburban Ottawa, the Canadian Tire Centre, for $92 million in 2003. Under, Melnyk, the Senators made it to the Stanley Cup Final once — a series won by Anaheim Ducks in 2007 — and its financial issues continued. 

Near the time of Melnyk’s death in March 2022, the team’s debt was estimated to be around $250 million due to regular operating losses.

Melnyk’s daughters, Olivia and Anna, hired Galatioto Sports Partners to handle the sale, and the New York-based firm put the team on the market in November. Melnyk had sought to build a new arena in downtown Ottawa, an effort that will now fall to the new owners of the club. 

The sale drew plenty of interest in the coming weeks, including bids from 16 groups — including some star power. 

The Remington Group — backed by real estate mogul Christopher Bratty — was the focus of Senators fans for weeks since it had Vancouver actor Ryan Reynolds on board. But the group dropped out of contention in May when Galatioto Sports Partners rebuffed a request for a 30-day exclusive negotiating period to acquire land for an arena in downtown Ottawa. 

About a month later, Apostolopoulos withdrew over what the Ottawa Sun reported were frustrations with the pace of the sale. He had entered a bid of around $1 billion. 

A source with knowledge of the process cast doubt that Apostolopoulos pulled out over the length of the transaction, and told FOS that — like Apostolopoulos’ attempt to purchase the Washington Commanders — there were questions about the financial viability of the bid. 

Apostolopoulos put in a $6 billion bid for the Commanders before owner Dan Snyder came to a final agreement with Josh Harris for $6.05 billion on May 12. Harris had been the frontrunner for weeks before Harris’ bid was accepted, as sources told FOS that no other bidder for the Commanders had the resources to back a bid of close to $6 billion. 

With the finalization of the purchase agreement, the application for new ownership will head to the NHL. As laid out in the NHL’s constitution, the league will conduct an investigation — which typically includes vetting the financial resources and a look into the backgrounds of each member of the ownership group.

Once that process has concluded, Bettman will submit the application to the Board of Governors — comprised of the majority owner of each NHL franchise — for a vote this offseason. It requires a vote of at least three-fourths (24 or more) to approve a new owner. 

The Ottawa Sun was the first to report the news.

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