MASARYK UNIVERSITY OF BRNO

COURSE IN STRATEGIC MANAGEMENT

PROFESSOR: TUCK MACRAE

CASE STUDY: OTTAWA SENATORS HOCKEY TEAM

February, Sunday 24th

Main strategies taken to try and save the team

 Purchase stadium was about 50 million $

 Advanced season ticket sales, merchandising, local investment were not
enough to support the fee  a major investor was required
 Odgen corp invested 10 million $ to pay the balance of franchise fee for
the stadium.
 New financial plan put by both owners of the hockey and palladium corp
but no one financial institute lend the money needed  investors had to
sell out due to financial difficulties
 Palladium decided to get a new guarantos  Bryden (most investor)
gave to Ogden corp the role to be a guarantor and check the financial
plan
 Palladium Rights Guarantee  new financial plan set up by Ogden Corp
in orde to cover fee
Also ogden made a direct investment of 50 million $ (return in 30y)
 May 1997, Bryden hired a investment banking firm (Nesbitt Burns) to
seek new investors in the hockey team
 Banking firm just spent 6 months trying to find new investors to buy some
or all the team, but the effort completely failed
 October 1997, after that a meeting with all investors, CM Bank agreed to
cover the club’s financial needs.
New proposal of financial restructuring plan would attack the debt byt
turning most of it into equity in the hands of shareholders  new
corporate structure and preffered shares for the new ones.
 Big match was to convince corps to make a good living off the debt
turned into stock where someday will generate dividends and rise in
value.
 Dec 1997, Ottawa Senators tap into Ontario Provincial Government
Distress Preferred Shares program  restructuration of part of deb

FUTURE OF THE TEAM

To help Canadian team, 3 things must happen:
1. Institution of salary cap and a revenue sharing plan
2. reduce the gap between Canadian and US dollar
3. Public investments must be used to raise new arenas and help teams
with fees and taxes.