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The Ottawa Senators are sitting pretty, even if the National Capital Commission ultimately chooses a competing plan for a new downtown arena instead of the NHL team’s proposal, say experts in the business of sports.
“I think the Senators are probably in the catbird seat here,” said Anthony Church, director of the School of Sports Administration at Laurentian University. “I think the arena needs the Sens more than the Sens need a new arena.”
Only two of four private-sector teams submitted development proposals for 9.3 hectares of land on LeBreton Flats – Rendez Vous LeBreton, which includes Senators Sports & Entertainment, and the DCDLS Group, led by Gatineau-based Devore.
Unexpectedly, both proposals include NHL-sized arenas along with supporting residential and commercial development, raising questions about whether the economics would line up if the Senators had to play in a downtown arena they didn’t own.
The team owns its current building, the 19-year-old Canadian Tire Centre, which provides a stream of non-hockey revenues that likely wouldn’t be available to them as tenants.
No problem, say experts approached by the Citizen. The Senators are in a strong position to negotiate favourable terms if the DCDLS Group wins the competition. (The NCC is not obliged to accept either bid.)
“The Senators would definitely have leverage in any negotiation with the eventual owner,” Church said. “They don’t have to worry about a downtown arena being filled by someone else.”
The arena is only viable if it has a major tenant, noted Brent Dowdall, a Conference Board of Canada executive who has studied the economics of professional sports. In Ottawa, that would have to be the Senators, he said. “I can’t fathom anything else.”
Brad Humphreys, an expert in the economics of sports who formerly taught at the University of Alberta, said it’s possible the Senators could make as much money as tenants as they would as owners.
“It depends on what kind of sweetheart lease you can get,” said Humphreys, now an economics professor at West Virginia University. “It’s possible that you can get a very, very lucrative lease arrangement. They’d have a lot of bargaining power with (DCDLS Group) because they need them.”
Having to negotiate with another owner wouldn’t necessarily be a deal-breaker, agreed Dan Mason, a professor of sports management at the University of Alberta.
“Obviously, their preference would be to do themselves,” Mason said. “But it would really depend on the nature of the arrangement between the parties.”
If the Senators were able to strike a contractual relationship with the DCDLS Group that secured their long-term viability as a franchise, they may not need to own the arena or participate in the development of the surrounding lands on LeBreton Flats, he said.
It’s not unheard of for a team to be a tenant in a facility operated by another for-profit company, Humphreys said. “It just introduces complications. Teams want to have input on what these facilities look like in the design process.”
Being a tenant rather than an owner “would mean the team would not have full control over what that arena looks like,” he said. If the Senators are serious about moving downtown, “I would imagine that the team is not very happy about a competing proposal.”
According to Dowdall, related real estate development – something the LeBreton project offers – has become a key element in the financing of new arenas and stadiums.
That sort of development helped pay for the makeover of TD Place at Lansdowne Park, the Winnipeg Blue Bombers’ new stadium and the new home of the Edmonton Oilers, now under construction.
“Ownership of the arena itself is important for a franchise, but ownership, or at least the ability to tap into, the surrounding real estate development is even more crucial,” Dowdall said. “That’s definitely a trend we’re seeing, that it’s about the real estate and the location.”
“In a perfect world,” said Mason, “you’d have a privately financed facility where the private sector would be reaping the benefits associated with the surrounding development. That’s where they would be making the money. So the anchor tenant could almost be like a loss leader.”
Consider the deal struck by the New York Islanders when the NHL team moved this year to the new Barclays Center in Brooklyn, Mason said. The arena is part of a large real estate development known as Pacific Park on 8.9 hectares of land – approximately the same size as the parcel on LeBreton Flats.
Rather than paying rent to play at the Barclays Center, the Islanders are receiving a flat fee – reportedly $50 million a year – from the project’s developer. In return, the Barclays Center gets all the revenue from the sale of tickets and suites, sponsorships, marketing and promotions.
It makes sense for the Senators to move to a new downtown arena, said Humphreys. About 15 years ago, there was a revolution in the way architects designed arenas, including features that are difficult to add to an existing arena. Those new design features make modern arenas “cash cows compared to a 20-year-old arena,” he said.
All other things being equal, Ottawa is better off with the Senators, and the Senators would be better off playing downtown, Mason said.
“If there’s a way to leverage that fact to develop some lands in the downtown that have not been developed, there’s an opportunity for a win-win across the board here.”
dbutler@postmedia.com
twitter.com/ButlerDon
查看原文...
“I think the Senators are probably in the catbird seat here,” said Anthony Church, director of the School of Sports Administration at Laurentian University. “I think the arena needs the Sens more than the Sens need a new arena.”
Only two of four private-sector teams submitted development proposals for 9.3 hectares of land on LeBreton Flats – Rendez Vous LeBreton, which includes Senators Sports & Entertainment, and the DCDLS Group, led by Gatineau-based Devore.
Unexpectedly, both proposals include NHL-sized arenas along with supporting residential and commercial development, raising questions about whether the economics would line up if the Senators had to play in a downtown arena they didn’t own.
The team owns its current building, the 19-year-old Canadian Tire Centre, which provides a stream of non-hockey revenues that likely wouldn’t be available to them as tenants.
No problem, say experts approached by the Citizen. The Senators are in a strong position to negotiate favourable terms if the DCDLS Group wins the competition. (The NCC is not obliged to accept either bid.)
“The Senators would definitely have leverage in any negotiation with the eventual owner,” Church said. “They don’t have to worry about a downtown arena being filled by someone else.”
The arena is only viable if it has a major tenant, noted Brent Dowdall, a Conference Board of Canada executive who has studied the economics of professional sports. In Ottawa, that would have to be the Senators, he said. “I can’t fathom anything else.”
Brad Humphreys, an expert in the economics of sports who formerly taught at the University of Alberta, said it’s possible the Senators could make as much money as tenants as they would as owners.
“It depends on what kind of sweetheart lease you can get,” said Humphreys, now an economics professor at West Virginia University. “It’s possible that you can get a very, very lucrative lease arrangement. They’d have a lot of bargaining power with (DCDLS Group) because they need them.”
Having to negotiate with another owner wouldn’t necessarily be a deal-breaker, agreed Dan Mason, a professor of sports management at the University of Alberta.
“Obviously, their preference would be to do themselves,” Mason said. “But it would really depend on the nature of the arrangement between the parties.”
If the Senators were able to strike a contractual relationship with the DCDLS Group that secured their long-term viability as a franchise, they may not need to own the arena or participate in the development of the surrounding lands on LeBreton Flats, he said.
It’s not unheard of for a team to be a tenant in a facility operated by another for-profit company, Humphreys said. “It just introduces complications. Teams want to have input on what these facilities look like in the design process.”
Being a tenant rather than an owner “would mean the team would not have full control over what that arena looks like,” he said. If the Senators are serious about moving downtown, “I would imagine that the team is not very happy about a competing proposal.”
According to Dowdall, related real estate development – something the LeBreton project offers – has become a key element in the financing of new arenas and stadiums.
That sort of development helped pay for the makeover of TD Place at Lansdowne Park, the Winnipeg Blue Bombers’ new stadium and the new home of the Edmonton Oilers, now under construction.
“Ownership of the arena itself is important for a franchise, but ownership, or at least the ability to tap into, the surrounding real estate development is even more crucial,” Dowdall said. “That’s definitely a trend we’re seeing, that it’s about the real estate and the location.”
“In a perfect world,” said Mason, “you’d have a privately financed facility where the private sector would be reaping the benefits associated with the surrounding development. That’s where they would be making the money. So the anchor tenant could almost be like a loss leader.”
Consider the deal struck by the New York Islanders when the NHL team moved this year to the new Barclays Center in Brooklyn, Mason said. The arena is part of a large real estate development known as Pacific Park on 8.9 hectares of land – approximately the same size as the parcel on LeBreton Flats.
Rather than paying rent to play at the Barclays Center, the Islanders are receiving a flat fee – reportedly $50 million a year – from the project’s developer. In return, the Barclays Center gets all the revenue from the sale of tickets and suites, sponsorships, marketing and promotions.
It makes sense for the Senators to move to a new downtown arena, said Humphreys. About 15 years ago, there was a revolution in the way architects designed arenas, including features that are difficult to add to an existing arena. Those new design features make modern arenas “cash cows compared to a 20-year-old arena,” he said.
All other things being equal, Ottawa is better off with the Senators, and the Senators would be better off playing downtown, Mason said.
“If there’s a way to leverage that fact to develop some lands in the downtown that have not been developed, there’s an opportunity for a win-win across the board here.”
dbutler@postmedia.com
twitter.com/ButlerDon
查看原文...
