A group led by Canadian businessman Michael Andlauer has reached an agreement in principle to buy the NHL’s Ottawa Senators – and close observers of the sale process say the winning bid’s strong local flavour should give comfort to fans and sponsors alike.
The team announced Tuesday that Andlauer and his group will purchase 90 per cent of the club from the Melnyk family. The deal is reportedly worth nearly $1 billion, which is “give or take” what Commissioner Gary Bettman expected the team to sell for.
“Michael represents everything we could have hoped to find coming into this process – a passionate owner who is committed to Ottawa,” Senators chairman and governor Sheldon Plener said in a statement announcing the sale. “We believe it is a momentous day for the National Capital Region.”
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Anna and Olivia Melnyk, daughters of late former owner Eugene Melnyk, will retain 10 per cent interest. Melnyk died of an undisclosed illness in March 2022 at age 62.
Andlauer, 57, is the founder and CEO of a health-care group with transportation options for that sector and started a private equity company based in Toronto. He owned the American Hockey League’s Hamilton Bulldogs from 2004-2015, then purchased the Ontario Hockey League’s Belleville Bulls and moved them to Hamilton.
Andlauer’s group will have a strong local component.
Sources confirmed to OBJ that the Malhotra family, owners of real estate development giant Claridge Homes, are part of the new ownership team. Meanwhile, Farm Boy co-CEO Jeff York told CTV Ottawa that he is also involved in the group.
Bruce Firestone, who founded the modern Senators franchise more than 30 years ago, said it was a smart move for Andlauer to bring on investors with a proven track record in the city.
“Having local ownership involved and major business owners like (the Malhotras and York), I think it does make a difference,” he told OBJ on Tuesday.
Andlauer and his partners will now be tasked with finding a potential downtown site for a new arena to replace the Canadian Tire Centre in Kanata, which has been the Senators’ home since 1996.
Aron Darmody, a marketing professor at Carleton University’s Sprott School of Business, said the Malhotras’ decades of real estate development experience will be invaluable when it comes to getting the new arena project off the ground.
‘Almost incumbent’ to get arena deal done
“It’s almost incumbent on them to get some deal done for a new place to play,” said Darmody, who previously taught at Boston’s Suffolk University and saw how TD Garden, the home of the NHL’s Bruins and the NBA’s Celtics, helped spur new development in that city’s West End district.
“I think from the team’s perspective, I think it is very important having people with those connections, with the experience of working through the many layers that any bid like this is going to entail in terms of getting the property, being able to develop the property.”
Former Senators president Cyril Leeder said he hopes that with a new ownership group finally in place, the club can now begin the process of securing an arena site in Ottawa’s central core.
“I’ve been racking my brain for years on this, and I couldn’t think of another economic generator that could do more for revitalizing downtown than an NHL arena,” said Leeder, who’s now CEO of the Myers Automotive Group.
“This will be Lansdowne times 10. That’s good for downtown. Having people live downtown is important, and I can’t think of something that would do more of that than an arena.”
Firestone said he wouldn’t be surprised if Andlauer looks to negotiate with the National Capital Commission to free up more development land at LeBreton Flats than the roughly seven acres that have been earmarked for a “major events centre” in the NCC’s master plan.
“They need more acreage, and certainly that would be one area I would investigate,” he said.
Andlauer has been alternate governor for the rival Montreal Canadiens since purchasing a share of the storied franchise in 2009. Andlauer must sell his interest in the Canadiens before his purchase of the Senators is complete, a process that also includes being approved by the NHL’s Board of Governors.
“I believe that the Senators’ fan base is one of the most passionate in the league, and I’m excited to take the franchise’s success both on and off the ice to the next level,” Andlauer said. “The short- and long-term future of the team is incredibly bright, and I look forward to getting to know the team, the fanbase and the community.”
Firestone said Andlauer, a former beer league goalie whose connection to the game runs deep, likely won’t waste any time trying to strengthen the club’s bond with Ottawa fans and businesses.
“He knows the game, he loves the game, he loves the league,” Firestone said. “He’ll make it a priority to have good relationships not just with the business community, but with the fans and the political community, which is an important part of our city. I’m very optimistic.”
Time to ‘rebuild’ connections
Leeder agreed that Andlauer needs to make re-establishing strong ties to the local business community a top priority.
“I think the local business community will obviously welcome a new owner,” he said. “It’ll be up to the new owner to make those connections and bring back the local business community.
“If you look at the golden years in the 2000s, I think the local business support in Ottawa was outstanding for the (Senators). We were kind of the envy of the league – we were punching way above our weight for the size of the market. The real strength was the fact that the local business community was all in on the Senators, and I think when you get a new owner, there’s an opportunity to rebuild that.”
Forbes values the Senators at $800 million, 24th out of the NHL’s 30 teams.
“I’ve always felt that we’ve been undervalued, so this, to me, is just an affirmation that our franchises are more valuable than Forbes or Sportico or many investment bankers have said,” Bettman said recently. “While people focus on the revenue side, the system we have that gives every team an opportunity to compete is something that we don’t think, historically, we’ve been given enough credit for on the value proposition.
“Our competitive balance is extraordinary, and that should somehow be equating to higher values. I think you’re beginning to see that.”
The Senators sale garnered plenty of interest, including competing bids from the likes of movie star Ryan Reynolds, Canadian R&B singer The Weeknd and rapper Snoop Dogg.
While Andlauer’s group isn’t as flashy as some of the more celebrity-laden bids, Darmody said that’s not necessarily a bad thing.
The veteran entrepreneur has “shown his bona fides as a very successful businessman and a successful team owner,” Darmody noted, and he was savvy enough to surround himself with high-powered local partners – a move that should assuage any concerns that Andlauer is an “absentee landlord” who views the team as just another asset in his portfolio.
“It does seem like there’s a fairly well-balanced group that’s been put together,” Darmody said. “I think with an ownership group like this, this excitement is going to come on the ice.”
– With additional reporting from the Canadian Press
