Gary Bettman tried to warn us.
“We’re not on the clock, the goal is to get it right. And if it takes a little longer, it takes a little longer,” Bettman said on March 27. “So everybody take a deep breath. Sit back and we’ll get through this process and we’re going to come out of it on the other side with a really good, strong new owner.”
But almost two months after the NHL commissioner made those comments, it seems like many Ottawa fans have run out of patience with the sale process for the Senators. We’re closing in on the month of June without any resolution on the new ownership in Ottawa. There is a chance we could know the two finalists for the Stanley Cup before the identity of the new owner for the Senators is revealed.
Over the past 48 hours, I have communicated with a number of sources directly connected to the sale process. Even though it was a long weekend in Canada, it was evident there were feverish negotiations and conversations between bidders and Galatioto Sports Partners (GSP), the New York-based firm in charge of handling the sale, over the past 72 hours.
I want to stress that everything you read in this column is subject to change, considering this is an extremely fluid situation. We may suddenly see GSP render a decision and issue a press release, rendering the bulk of this column useless. But given the interest in this subject, I thought it was imperative to give our readers an update on where things are at heading into yet another crucial week in the sales process.
A preferred bidder has not been selected just yet
I know there has been a lot of rumour and conjecture out there suggesting Michael Andlauer has already been tabbed as the new owner of the Senators. As of this writing, that is not something I can confirm with any degree of accuracy. Could that happen at a moment’s notice? Absolutely.
But right now, I firmly believe that multiple groups are still in the running. And the feeling I get is that this isn’t just a two-horse race between Andlauer and the Kimel family. I believe at least one of the other groups — either headed by Steve Apostolopoulos or Neko Sparks — is still a legitimate contender. There is even a scenario where I think both of them are still in play because I’m not sure anybody has been explicitly told they’re out of the running. It sounds to me like these bids have been thorough, comprehensive and competitive.
If one of the bids truly stood ahead of the rest, I believe we would have seen closure by now.
Apostolopoulos is an interesting one to me, because his bid has really been wrapped in mystery. Externally, nobody seems to have a firm grasp on who is partnered with him on this bid. There was even some debate as to whether or not he would even submit a bid before last Monday’s deadline, but I wouldn’t be entirely shocked if his bid was the one that eclipsed the $1 billion mark.
It’s been very hard to get a handle on things, because I think the NHL, GSP and the Melnyk family estate has done a very good job of keeping these negotiations in a vault since the final bids were submitted on May 15. If you’ll notice, there haven’t been too many leaks over the past few days in this process.
If there is a frontrunner or lead horse, those three parties — the NHL, GSP and the Melnyk estate — are the only ones aware of it. The rest of us are just playing a very educated guessing game.
The Sparks bid appears to be alive right now
One of the wild cards in this process is the bid fronted by Sparks.
Over the weekend, there were a handful of announcements related to their bid. On Friday, track star Donovan Bailey announced he was a partner with the Sparks bid. On Saturday, comedian Russell Peters followed suit. And then at 5:45 p.m. ET on Victoria Day Monday — a strange time for news to be revealed — a press release was distributed announcing that the investors from the television show “Dragon’s Den” had also joined the Sparks bid.
At the very least, I can confirm the Sparks group are very much in the running as of Tuesday afternoon. Again, I think it’s a pointless exercise to deem anybody favourites or say they are exuding confidence at this point.
But I’ll simply pass along that the Sparks bid now feels like they’re being taken seriously in this process.
I have seen the collective eyeball roll amongst Senators fans on social media when the Sparks group adds another prominent name to its mix. And I know there are a lot of people who believe there are far too many investors for their liking with the Sparks group.
When Bettman came to town back in March, this was a specific concern I addressed with him. One of the things I had gleaned back in March was that the Sparks group could have a complicated structure, filled with numerous investors. If nothing else, that perception has only intensified in recent weeks.
So I asked Bettman directly on March 27, “Does the league or the board of governors have a preference in terms of ownership structure? Are you OK if there is a consortium with multiple people or would you prefer a singular voice?
His response was rather short, but he said, “The devil is in the details. We’ll look at it when it comes, but speculation doesn’t help.”
So we’re at the point where the league is looking over those details with a fine-tooth comb. If their ownership structure is too risky or volatile, I cannot see them proceeding with the Sparks group. The league does not want a situation where they find the Ottawa Senators in financial peril in 24 to 36 months. This has to be a stable, deeply funded venture. It cannot be built on a house of cards, because the NHL cannot have a franchise sell for around $1 billion U.S. only to have it turn around and file for bankruptcy a short time later.
This will also need to pass the board of governors’ approval at some point in the weeks ahead and the league cannot afford the PR blunder of taking a vote to the board only to have a bid rejected.
Translation: If the Sparks group does somehow emerge victorious, it will be with a dependable business plan that receives Bettman’s stamp of approval.
They want to get this right.
So one source suggested to me that the longer we go without an official announcement, the more inclined he is to think the Sparks group is receiving serious consideration.
Is there still a chance for a merger?
One idea I mentioned in my column last week, that still seems to have legs, is that there could be a marrying of two bidders together. Specifically, there is still some chatter about a merger between the Andlauer and Kimel groups.
Personally, I don’t see the benefit for either party.
Andlauer is currently a minority investor in the Montreal Canadiens, while the Kimel family previously had a small stake in the Pittsburgh Penguins. Ostensibly, they wanted to have their own bids for the Senators because they crave complete control of an NHL franchise for the first time in their lives. It would seem counterintuitive for Andlauer to sell his share of the Montreal Canadiens only to become a part-owner of the Ottawa Senators.
But as of Tuesday afternoon, this is still an idea being floated around by several sources. One person suggested we could see a similar structure to how MLSE — parent company of the Toronto Maple Leafs — is laid out.
In the Ottawa scenario, perhaps Andlauer and Kimel each own 37.5 per cent of the team. Local investors and partners own 15 per cent, while the Melnyk family retains 10 per cent. This structure wouldn’t be overly complicated and would technically give Andlauer and Kimel more power than they’ve seen inside an NHL boardroom in the past. They would be listed as co-owners and a lot of the major decision making would be made in tandem, likely through the creation of a board of governors.
The Kimels have some knowledge and expertise in real estate, while Andlauer has a keen interest in the hockey side. So maybe this could be a very natural and successful partnership. (Though I’ve been told if the Kimel group wins this bid outright, they would come to the table with a very robust hockey operations and analytics department. And they’ve got some unique ideas about growing the game and diversifying the sport too).
I still think the best scenario for each of these groups is to secure the bid on their own.
But if the league truly wants them as owners, perhaps this is a workaround solution that would enable them to both own significant piece of the team. I believe this is a long shot scenario, but I don’t think it’s totally dead just yet.
And I do wonder how the Apostolopoulos and Sparks groups would react to a plot twist like this at the eleventh hour. Would they throw a challenge flag and object to the process?
When will will see closure?
I still think there is a chance this sale could push the $1 billion U.S. mark, which is mind-boggling when you consider the Senators are a small-market Canadian club. And maybe that’s the magic number for GSP to make this work. Can they get a group to present a stable, reliable plan that meets a $1 billion price tag?
If nothing else, I think GSP has used this past week to help squeeze just a little bit more out of the final price. Those binding offers had some degree of flexibility and there have likely been some negotiations on the sale price over the past seven days.
But there is some frustration starting to creep into the process for the bidders, who want to see some closure here after being on an emotional roller coaster for several weeks. If you think you’ve been drained by this as a Senators fan, just imagine being part of the group that has poured thousands of dollars and hours into this process.
I think everybody involved in the process believes we are now reaching the end game. Getting a resolution by Wednesday might be a tad optimistic, but I do think everything points towards an announcement at some point before Friday of this week.
But it’s important to remind Ottawa fans that will only establish a conditional sale of the franchise.
We still likely have several weeks of an approval process on the horizon, which means a full transfer of ownership may not happen until just around the NHL Draft in Nashville at the earliest.
(Photo: André Ringuette / NHLI via Getty Images)