Senators have lost $94 million dollars under Melnyk

[sureLoss]

http://www.ottawacitizen.com/sports/...118/story.html

How much are the Senators costing him? It’s impossible to be definitive because, despite its high public profile, the team is a private company. Not only that, the NHL regularly warns the 30 franchise owners not to divulge details about their operations. Nevertheless, Melnyk and two of his long serving senior executives — Leeder and chief financial officer Erin Crowe — offered some insight into the team’s finances.


On Melnyk’s decade-long watch, they say, the team has generated a grand total of just $6 million on operations — that is, total revenues minus the costs associated with paying and moving the players, advertising and managing the arena. After subtracting items unrelated to operations — such as interest on the team’s debt and capital expenditures to keep the arena up-to-date — Melnyk has had to absorb cumulative cash losses of $94 million. In short, he is losing an average of $9 million to $10 million a year. And this excludes the additional interest and fees related to the debt extensions.


Again, without seeing the books, it’s difficult to know if these numbers exaggerate the team’s financial condition or not. But they do seem to line up with Melnyk’s behaviour during the past couple of years: his drive to secure a casino in Ottawa; his determination to keep the Senators’ salary capped at $51 million annually; and the new, more lucrative naming deal for the Senators’ arena, called Canadian Tire Centre as of last month.

[transplant99]

Move em to a Canadian.....ummm......damn Bettman......ummm....errrr...its all the Leafs fault!!

[SebC]

I wonder how much it costs them every year that their arena's location is the Ottawa-equivalent of "North of Airdrie".

[TheDebaser]

That's kind of sad. I hope the Sens get their #### together quick. I'd love to see what the group of guys who are already there +1 or 2 stars could do.

[カナダ人です]

I find this report dubious at best, based mainly on my default position to take what millionaires/billionaires/corporations say with an enormous grain of salt.

Especially if it is unsolicited.

[byronkentgraham]

Originally Posted by TheDebaser

That's kind of sad. I hope the Sens get their #### together quick. I'd love to see what the group of guys who are already there +1 or 2 stars could do.

+1-2 stars like spezza and alferedsson?
Or Ryan, spezza and karlssson?

Not sure what is wrong with that team but its sure not a lack of top end talent.

[moon]

Perhaps he should get some forensic investigators to look into it.

I don't believe much when it comes to sports teams and the losses they claim and even less from a scumbag like Melnyk but if true it couldn't happen to a more deserving guy.

[theinfinitejar]

I wonder how much of that is from his yearly forensics budget?

[Northendzone]

Surprising given thier building seems full.

I thought I read something to suggest that mean gene is having some non-hockey related business issues.......

[JD]

That's only a cash-flow analysis. It's not a balance sheet view which should take into account assets like the value of the building and the franchise, of which I assume have increased since Melnyk bought them. I wonder if that's Melnyk buttering up the fans for a significant increase in ticket prices next year?

[LIP MAN]

Originally Posted by SebC

I wonder how much it costs them every year that their arena's location is the Ottawa-equivalent of "North of Airdrie".

Hence why I'm glad where our stadium is located. We'll probably see it remain on the grounds here (Big 4 building). It's close to a train line, dense population, and ample parking. And part of the cities skyline. It appears a lot of the struggling franchises in sport have a problem with lack of access, and proximity to their cities as it pertains to their stadiums.

[Heavy Jack]

[sworkhard]

Originally Posted by カナダ人です

I find this report dubious at best, based mainly on my default position to take what millionaires/billionaires/corporations say with an enormous grain of salt.

Especially if it is unsolicited.

Sent from my SGH-I747 using Tapatalk 4

[TurnedTheCorner]

I like this thread, because on the front of the forum it looks like the Senators have lost $94. Then I think I can just give them a bus pass and call it a day.

[H2SO4(aq)]

need to bring back studs like Peter Schaeffer

[Husky]

Originally Posted by JD

That's only a cash-flow analysis. It's not a balance sheet view which should take into account assets like the value of the building and the franchise, of which I assume have increased since Melnyk bought them. I wonder if that's Melnyk buttering up the fans for a significant increase in ticket prices next year?

The chances of a building increasing in value is slim to none. It's a depreciating asset. The land the building sits on is a totally different story.

[Nehkara]

Originally Posted by LIP MAN

Hence why I'm glad where our stadium is located. We'll probably see it remain on the grounds here (Big 4 building). It's close to a train line, dense population, and ample parking. And part of the cities skyline. It appears a lot of the struggling franchises in sport have a problem with lack of access, and proximity to their cities as it pertains to their stadiums.

I don't want to derail the thread but I thought I should just mention that the Stampede Grounds have been ruled out as a location for a new arena.

[The Original FFIV]

I've said it before and I'll say it again. The Capital area is a crappy sports market. How many times do you have to blame crappy teams or crappy owners? They've lost their football team twice and almost lost the Sens before Melnyk stepped up. When the federal government is your largest employer and you have a limited corporate base, that does not bode well for revenues. Should have never been awarded an expansion franchise, only got it because Tampa and Ottawa were the only ones to pony up the full expansion fee.

[FlamesAddiction]

Originally Posted by JD

That's only a cash-flow analysis. It's not a balance sheet view which should take into account assets like the value of the building and the franchise, of which I assume have increased since Melnyk bought them. I wonder if that's Melnyk buttering up the fans for a significant increase in ticket prices next year?

Not too many club owners buy teams to make money off the team, and quite often they run them at a deficit. They are a money losing component of a larger enterprise that makes money (or increases in value) as a whole. I agree that a simple cash flow analysis doesn't tell the full story.

Or for some, they are just a hobby of someone so filthy rich, that they don't mind taking a loss. An average of $9-10 million per year isn't a huge deal to some of these guys if they are enjoying what they are doing.

[savemedrzaius]

The guy owns the building. Plus he owns the parking lot area surrounding "Canadian Tire Centre"..basically everyone must drive to the games, he must make a killing alone off that!

I think this has more to do with Melnyk making some crappy business decisions.

http://www.ottawacitizen.com/sports/...252/story.html