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  #2481  
Old Posted Dec 7, 2018, 3:01 PM
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Originally Posted by phil235 View Post

Secondly, no one can definitively state that the Senators have never made money. The team's financials are not public. An owner crying poor is pretty weak evidence that the team isn't making money. There are many ways to move profit to associated businesses to minimize tax. Even if you take him at his word, the article you linked says this:
They also structured the related businesses (like Capital Tickets, when that was still a thing, and the stadium management, etc.) independently from the team, which positions the Senators as a lost leader, while making money e.g., from tickets and rentals for a concert or the circus coming to town.
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  #2482  
Old Posted Dec 7, 2018, 3:37 PM
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Originally Posted by Horus View Post
Disagree. This week alone has shown that there is incentive to spend massively to enter the NHL. The Seattle group has just committed to $650 Million in expansion franchise fees and $850 Million in arena renovations to join the NHL. Any prospective Ottawa buyer could get in for probably half of that.
But why would they want to build a new arena, or sink more money into things like player salaries? The value of the team is primarily in that it is an NHL franchise. Whatever increase in gate you might get from a downtown move is going to be dwarfed by the capital costs, which is why hardly any small market team in any sport in North America plays in a stadium/arena funded by the team.
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  #2483  
Old Posted Dec 7, 2018, 3:45 PM
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Originally Posted by acottawa View Post
But why would they want to build a new arena, or sink more money into things like player salaries? The value of the team is primarily in that it is an NHL franchise. Whatever increase in gate you might get from a downtown move is going to be dwarfed by the capital costs, which is why hardly any small market team in any sport in North America plays in a stadium/arena funded by the team.
Agree on the capital cost. In terms of players' salaries, the owners are already operating within a relatively small range (roughly $20 million from highest to lowest), and there is arguably a much closer corelation between payroll and performance. Better performance leads to increased revenues in markets with elastic attendance. That and most of them want to win.
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  #2484  
Old Posted Dec 7, 2018, 3:56 PM
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Originally Posted by acottawa View Post
First of all the Senators have never made money. Melnyk bought the team out of bankruptcy and he has lost money on the team pretty much since day one.
http://www.ottawacitizen.com/sports/unde...ors+have+lost+million/8799118/story.html

I think some people confuse “operating income” (which Forbes lists) with profit, but those are not the same thing. But if someone rents out a condo out for $1000, pays $200 in condo fees, $200 in taxes and $800 in mortgage interest, their operating income is $800 a month, but the are taking a loss of $200 a month.

Yes the capital asset has appreciated (which has happened across the league, mainly because broadcasters are currently overpaying for rights), but that is not the same as making money.

It is possible another owner may be willing to take a loss on the team in hopes capital appreciation exceeds the annual loss on the team, or in hopes of a future relocation, but such an owner has zero incentive to build a new arena.
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Originally Posted by McC View Post
They also structured the related businesses (like Capital Tickets, when that was still a thing, and the stadium management, etc.) independently from the team, which positions the Senators as a lost leader, while making money e.g., from tickets and rentals for a concert or the circus coming to town.
+1 on this comment!
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  #2485  
Old Posted Dec 7, 2018, 8:33 PM
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Originally Posted by acottawa View Post
But why would they want to build a new arena, or sink more money into things like player salaries? The value of the team is primarily in that it is an NHL franchise. Whatever increase in gate you might get from a downtown move is going to be dwarfed by the capital costs, which is why hardly any small market team in any sport in North America plays in a stadium/arena funded by the team.
You could argue that an arena is an investment in future valuation of the franchise. The recently released Forbes valuation list showed that only 2 NHL teams decreased in valuation from the previous survey. Those teams were Arizona and Florida. Is it purely coincidence that those are also the two teams with the worst arena locations, the lowest attendance, and have frequently been among the lowest spending on player salaries?

Your statement about the small market arenas rarely being funded by the team is true, but I would categorize that to be more a result of the teams politicking hard to squeeze money out of their host cities via their slanted "economic spinoff studies" and manipulative extortion threats.

If there was no value in a new arena, why is virtually every NHL team playing in an arena that is 25 years old or newer?
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  #2486  
Old Posted Dec 7, 2018, 9:30 PM
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Originally Posted by Horus View Post
If there was no value in a new arena, why is virtually every NHL team playing in an arena that is 25 years old or newer?
Arenas built around 1992 and later have luxury suites, arenas built before then did not. This is the main reason behind the arena and stadium boom of the past 25 years. The CTC is still a modern arena, the only thing going against it is location.
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  #2487  
Old Posted Dec 8, 2018, 6:52 AM
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Most NHL franchises are not profitable. This is probably true of sports franchises more generally. A good piece of evidence for this is the fact that so few are corporate-owned. And those that are tend to be the most lucrative (Leafs, Rangers, Blue Jays). Instead, most teams are privately owned by (wealthy) individuals. Because a sports franchise is as much a status good as it is a business enterprise. (NB: status good does not imply "emotional" purchase). Probably more so. This means that we shouldn't look to the discounted stream of expected future profits to do our asset pricing exercise.
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  #2488  
Old Posted Dec 8, 2018, 12:50 PM
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Originally Posted by phil235 View Post
Agree on the capital cost. In terms of players' salaries, the owners are already operating within a relatively small range (roughly $20 million from highest to lowest), and there is arguably a much closer corelation between payroll and performance. Better performance leads to increased revenues in markets with elastic attendance. That and most of them want to win.
There is a pretty weak correlation in hockey between results and payroll. There are a whole bunch of top 10 payroll teams that are out of the playoffs and several bottom 10 teams in payroll contention. Quality free agents rarely hit the open market and when they do they rarely go to the highest bidder.

In Ottawa there is an even weaker correlation between attendance and results. Attendance started dropping off in 2013 when they were consistently fielding above-average teams. Their biggest drop in attendance was the year they went to the conference final.
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  #2489  
Old Posted Dec 8, 2018, 12:53 PM
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Originally Posted by shawkr View Post
Most NHL franchises are not profitable. This is probably true of sports franchises more generally. A good piece of evidence for this is the fact that so few are corporate-owned. And those that are tend to be the most lucrative (Leafs, Rangers, Blue Jays). Instead, most teams are privately owned by (wealthy) individuals. Because a sports franchise is as much a status good as it is a business enterprise. (NB: status good does not imply "emotional" purchase). Probably more so. This means that we shouldn't look to the discounted stream of expected future profits to do our asset pricing exercise.
The value for owners is in the total valuation. If you buy in at $200M and can sell at $450M ten years later then a few years of losses in between doesn't make that much of a difference in the long run.

We can all harp on Arizona and Florida losing money but at the end of the day they're worth more today than five or ten years ago.
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  #2490  
Old Posted Dec 8, 2018, 4:57 PM
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Originally Posted by JHikka View Post
The value for owners is in the total valuation. If you buy in at $200M and can sell at $450M ten years later then a few years of losses in between doesn't make that much of a difference in the long run.

We can all harp on Arizona and Florida losing money but at the end of the day they're worth more today than five or ten years ago.
This guy gets it.
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  #2491  
Old Posted Dec 8, 2018, 8:17 PM
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And what if you purchased the team and a modern NHL arena for $130M that is now valued at over $400M. I think the fans thought a fire sale like that would result in an owner willing to do what is best for the franchise's future. This has been a boon for Melnyk and he continues to talk and act as if he is bleeding money and doing us a favour by keeping the team in Ottawa. Time for him to cash out his chips for $400M to OSEG or Laliberte and his gang so that we can move on from the Melnyk years. We appreciated him bailing out the team, but it wasn't out of a love of Canadian hockey, it was out of a love of money. Time for him to take his money and go play with his horses.
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  #2492  
Old Posted Dec 8, 2018, 9:25 PM
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Originally Posted by acottawa View Post
In Ottawa there is an even weaker correlation between attendance and results. Attendance started dropping off in 2013 when they were consistently fielding above-average teams. Their biggest drop in attendance was the year they went to the conference final.
You consistently use the 2016-17 season as an example, but what you fail to mention is that while they were 2nd in the Atlantic, they were only 4 points away from not making the playoffs but they won 3 of their last 4 regular season games, propelling them into the playoffs on a hot streak.
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  #2493  
Old Posted Dec 8, 2018, 10:25 PM
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Originally Posted by roger1818 View Post
You consistently use the 2016-17 season as an example, but what you fail to mention is that while they were 2nd in the Atlantic, they were only 4 points away from not making the playoffs but they won 3 of their last 4 regular season games, propelling them into the playoffs on a hot streak.
So fans should only go to games if their team is a lock to make the playoffs? That is what, maybe a half dozen teams any given year.
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  #2494  
Old Posted Dec 15, 2018, 4:19 AM
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LeBreton Flats becomes Tobi Nussbaum's problem

Jon Willing, Ottawa Citizen
Updated: December 14, 2018


LeBreton Flats, and all the baggage weighing down the redevelopment project, is now Tobi Nussbaum’s problem.

The Ottawa city councillor, who will take over as CEO of the National Capital Commission on Feb. 4, says the historic transformation of the decrepit federal land will be at the top of the briefing pile as he moves offices four blocks up Elgin Street.

“Clearly we’re at a point now where decisions have to be made about the future of that site. It’s going to be very, very important for me to get briefed up on those details,” Nussbaum said in an interview Friday.

“I share the objective that everybody has in the City of Ottawa, that we want this file to move forward as expeditiously as possible and whatever that process allows. I don’t enter into it with some preconceived idea of what should happen.”

The NCC’s development partner, RendezVous LeBreton Group, is imploding as Ottawa Senators owner Eugene Melnyk sues Trinity Developments founder John Ruddy over a LeBreton-area, Trinity-involved residential development.

Meanwhile, Devcore Canderel DLS, the runner-up bid in the NCC’s LeBreton Flats design competition, has confirmed all of its business partners are unified and their financing is rock solid, should the NCC call.

DCDLS, however, is still waiting by the phone.

The executive transition between current CEO Mark Kristmanson and Nussbaum comes at a sensitive time since the NCC board is scheduled to make a critical decision on LeBreton Flats during a meeting in January, just days before Nussbaum takes over the agency. It’s at that meeting where the board is expected to decide if the NCC should cut ties with RendezVous.

Nussbaum, the councillor for Rideau-Rockcliffe ward, doesn’t plan to file his formal resignation notice with the city clerk until later in January but he hasn’t picked a specific date. He wants to spend a lot of time at city hall making sure his office constituency files are in order before leaving for the NCC.

“I’m focused over the next few weeks on just really working on a smooth transition plan, making sure I’m ensuring service to residents, making sure we know how we’re going to be managing these types of files moving forward,” Nussbaum said.

The municipal election was Oct. 22 and Dec. 1 marked the start of the four-year council term. A byelection will need to be organized to fill Nussbaum’s seat. The clerk’s office has estimated a byelection for a mid-sized ward like Rideau-Rockcliffe would cost as much as $500,000.

Ontario cabinet minister and Nepean MPP Lisa MacLeod criticized Nussbaum for taking the NCC job and “sending the wrong message in politics” to residents.

“I don’t think people expect you are going to put your name on a ballot and then within two weeks of being sworn in that you are going to resign for a job – a plum political post,” MacLeod said.

Nussbaum said he applied for the NCC job after he was re-elected. He said he was focused on winning the election and he knocked on thousands of doors during the campaign, but after the election, at the end of November, residents referred him to the NCC job posting when it was clear the government hadn’t decided what to do about the CEO position.

“People who encouraged me in my ward, who felt my unique blend of federal public service and municipal experience could make a positive contribution to the organization, felt that was a position that could fit well with my experience,” Nussbaum said.

Before he was first elected in 2014, Nussbaum was a diplomat and a senior bureaucrat, climbing the ranks of the federal government, working at Global Affairs and the Privy Council Office.

He’ll begin a four-year term at the NCC, just two months after being sworn in as councillor for a four-year term.

“There’s no question the timing is unfortunate and I wish I could have done something about that,” Nussbaum said.

“There was an opportunity to potentially play an important role in contributing to the future of our region in a leadership position and I took that potential responsibility very seriously. Of course, Rideau-Rockcliffe residents are also residents of the National Capital Region, so I’m absolutely grateful that the job I will be moving into is continuing to have that role, to advance the public good.”

Come February, Nussbaum and Mayor Jim Watson will have a much different working relationship, both as advocates for different organizations, while both steering the future of the NCC, since Watson is a non-voting member of the NCC board.

Nussbaum said his relationship with Watson is overblown as being acrimonious. There were times when they voted differently but it’s been a respectful relationship, he said.

“I can work very, very well with Mayor Watson and look forward to doing that,” Nussbaum said.

Nussbaum was left off almost all of city council’s standing committees in Watson’s recent membership selections, but the councillor said it wasn’t a factor this week in deciding to leave city hall.

What really knocked him off kilter was news leaking about his pending appointment to the NCC.

“It caught me totally off guard,” Nussbaum said. “This isn’t the first time there’s been a leak in the public service, but it certainly put me in an awkward position because in that situation you want to communicate clearly to residents about what’s happening, and that, of course, made it difficult for me to communicate with residents as to what was happening.”

— with files from Elizabeth Payne

[email protected]
twitter.com/JonathanWilling

https://ottawacitizen.com/news/local-news/lebreton-flats-becomes-tobi-nussbaums-problem
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  #2495  
Old Posted Dec 15, 2018, 12:46 PM
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Hopefully he will bring a more realistic approach than his predecessor.
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  #2496  
Old Posted Dec 15, 2018, 3:10 PM
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Whatever happens is probably going to take decades. To me the first priority should be to get a grocery store into the neighbourhood. Preferably a superstore type setting where you could also buy durable goods, and preferably with underground parking. It would help the surrounding neighbourhoods (which is pretty much a food desert) and make any residential developments more attractive.
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  #2497  
Old Posted Dec 15, 2018, 5:00 PM
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Whatever happens is probably going to take decades. To me the first priority should be to get a grocery store into the neighbourhood. Preferably a superstore type setting where you could also buy durable goods, and preferably with underground parking. It would help the surrounding neighbourhoods (which is pretty much a food desert) and make any residential developments more attractive.
Chicken and Egg. Without the density of the new development, a grocery store won’t go there. The IGA on Booth closed for a reason.
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  #2498  
Old Posted Dec 15, 2018, 5:56 PM
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There was an IGA on Booth?

Claridge Land could certainly support a grocery store, especially if it was added to the next tower nearest Pimisi.
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  #2499  
Old Posted Dec 15, 2018, 8:30 PM
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We need the Trinity development, at the VERY LEAST, to get the density required to start seeing commercial development in this area. There just aren't enough residents currently to justify it.
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  #2500  
Old Posted Dec 15, 2018, 10:01 PM
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Originally Posted by O-Town Hockey View Post
We need the Trinity development, at the VERY LEAST, to get the density required to start seeing commercial development in this area. There just aren't enough residents currently to justify it.
And the Claridge East Flats project going. TBH, if Trinity and East Flats get going there will be plenty of residents nearby to support more commercial...
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