The current bidding war for the Senators highlights how pro sports franchises have become less of a vanity purchase and more akin to buying fine wine or rare art
“We have seen nearly 50 years now of pro sports franchises just exponentially getting more and more valuable and it doesn’t seem to be showing any sign of slowing down,” said Simon Darnell, director of the University of Toronto’s Centre for Sport Policy Studies.
“That is another reason why these high-profile, relatively powerful people want to be associated with professional sports: It is a great place to park your money.” Since 1996, the average National Hockey League team’s value has increased by 1,112 per cent, according to data from the trade publication Sportico. That is nearly double the 580-per-cent growth delivered by the S&P 500 over the same period.
“If the Senators sell for US$1-billion, which it looks like they are going to, that is crazy compared to how much that franchise was worth when it first came into the league,” Mr. Darnell said. Mr. Melnyk paid US$92-million for the Senators in 2003. That would make for a 20-year return on investment of more than 1,000 per cent if the billion-dollar sale price is achieved.rankingThere are two other reasons why celebrities likely see money-making potential in owning the Senators specifically, Mr. Darnell said. One is that having a strong personal brand helps attract corporate sponsorships, which are often a key source of revenue.
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