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Melnyk Says He Can’t Invest Much More In The Senators

from David Reevely of the Ottawa Citizen,

Slapped by an overwhelming city hall vote against his plans to build a casino at his Kanata hockey arena, Ottawa Senators owner Eugene Melnyk said he won’t be able to invest any more deeply in the team or in the city.

He’s already been stymied in his effort to turn the newly rechristened Canadian Tire Centre into a hub for major-league soccer as well as hockey. With a 10-1 vote by city council’s finance committee to end his casino dream by telling the provincial government that Ottawa only wants a new casino at the Rideau Carleton Raceway on Albion Road, Melnyk’s been thwarted a second time.

“There is no Plan C,” Melnyk said just before the vote. He flew to Ottawa Tuesday morning and pulled up to City Hall in a black Cadillac Escalade, Senators president Cyril Leeder and right-hand man Ken Villazor at his side, to make his unsuccessful pitch.

The Senators lose money as a hockey operation, Melnyk said (“If you heard a number, it would be staggering,” he said); although his Ottawa entertainment empire makes some money off concerts as well, that’s not the business it used to be. He’s set a $50-million cap on player salaries and can’t afford to spend more, retooling the team into a young, inexpensive one that’ll need some luck to win consistently.

continued

Filed in: NHL Teams, Ottawa Senators, | KK Hockey | Permalink
 

Comments

Evilpens's avatar

Well Maybe if he divested himself of the CSI Ottawa group he would have more Money LOL

Posted by Evilpens on 07/10/13 at 12:15 PM ET

Evilpens's avatar

OHH also it really helps your Poormouth case by pulling up in a Cadillac Escalade

Posted by Evilpens on 07/10/13 at 12:16 PM ET

awould's avatar

Yeah. He should’ve driven a beat up Chevy Cobalt so people would really know he couldn’t afford to spend more than $50MM on his roster payroll.

Posted by awould on 07/10/13 at 12:25 PM ET

Dakkster's avatar

He’s just throwing a hissy fit because he didn’t get his casino.

Posted by Dakkster from Southern Sweden on 07/10/13 at 12:44 PM ET

mrfluffy's avatar

OHH also it really helps your Poormouth case by pulling up in a Cadillac Escalade

Posted by Evilpens on 07/10/13 at 01:16 PM ET

An Escalade?

*laughs.

Puhleeze.

If he pulled up in a 700 series BMW or a Bentley then we’d talk.

Posted by mrfluffy from A wide spot on I-90 in Montana on 07/10/13 at 12:51 PM ET

Primis's avatar

Nope, this all had NOTHING to do with Alfredsson leaving, never…

Posted by Primis on 07/10/13 at 01:15 PM ET

Avatar

Nope, this all had NOTHING to do with Alfredsson leaving, never…

Care to elaborate?

Posted by Chris M on 07/10/13 at 01:18 PM ET

mrfluffy's avatar

Care to elaborate?

Posted by Chris M on 07/10/13 at 02:18 PM ET

You don’t think Alfredsson saw the writing on the wall?

Posted by mrfluffy from A wide spot on I-90 in Montana on 07/10/13 at 01:20 PM ET

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You don’t think Alfredsson saw the writing on the wall?

Oh, I don’t discount that he did, nor do I believe Gene-o when he says that he has no financial issues. There has been a whole lot of evidence presented that suggests otherwise. I also, as a resident of Ottawa and a Sens fan, don’t really appreciate him using thinly veiled threats like this. Nor do I understand why, on the one hand he says he’s losing so much $ on the team yet is insistent that he will never sell the club, kind of a mixed message.

But I can’t see why it had anything to do with Alfie leaving. He wasn’t looking to make a long term commitment to the team, he insists this will be his last season. What does it matter if the team’s owner is in financial peril?

Posted by Chris M on 07/10/13 at 01:24 PM ET

Hootinani's avatar

he insists this will be his last season

Not that it has anything to do with the topic at hand, but I haven’t seen Alfie state anywhere that this is for sure his last season.  Every quote that I have read since his dscision to move has been “this year, and then we’ll see.”

But if Alfie had any inkling at all that the team was going to be run with an internal budget cap which might hinder his last bid(s) to win a Cup, don’t you think that it might influence his decision?

Posted by Hootinani on 07/10/13 at 01:33 PM ET

Avatar

But if Alfie had any inkling at all that the team was going to be run with an internal budget cap which might hinder his last bid(s) to win a Cup, don’t you think that it might influence his decision?

Perhaps you’re right. But they haven’t been a cap team for a few seasons now, this isn’t a new phenomenon. It was always laid out in the public to be the case, and Alfredsson said as recently as last season that he couldn’t imagine trying to win a Cup elsewhere.

I just think he believes Detroit is a better team than Ottawa this season.

Posted by Chris M on 07/10/13 at 01:36 PM ET

Hank1974's avatar

Being Canadian, this may be blasphemous for me to say, but I’ve always wondered if there should be a team in Ottawa.

I don’t doubt the passion of the fans there, but it seems every owner has had problems making money with the Sens - something I don’t believe would happen in either Hamilton or Toronto.

P.S. Read a book once about the Ottawa/TB expansion decision and it was quite laughable how both franchises received an expansion team.
They and TB were the only teams, out of several, that didn’t have a problem shelling out the $50M in expansion fee’s. That was it.

Posted by Hank1974 on 07/10/13 at 01:43 PM ET

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Being Canadian, this may be blasphemous for me to say, but I’ve always wondered if there should be a team in Ottawa.

There should be a team in Ottawa, they just shouldn’t play 30 minutes outside the city in the boondocks. But if you read the aforementioned book, they lay out pretty well why the arena was located there in the first place…

Posted by Chris M on 07/10/13 at 01:49 PM ET

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Not that it has anything to do with the topic at hand, but I haven’t seen Alfie state anywhere that this is for sure his last season.  Every quote that I have read since his dscision to move has been “this year, and then we’ll see.”

I dont know how accurate it is, but I’ve read that in early negotiations he was looking for a two-year deal in Ottawa, so I can’t imagine he’s definitely thinking this year is his last…

Posted by Garth on 07/10/13 at 01:54 PM ET

Hank1974's avatar

There should be a team in Ottawa, they just shouldn’t play 30 minutes outside the city in the boondocks. But if you read the aforementioned book, they lay out pretty well why the arena was located there in the first place…

Very true.
And didn’t the owners have to pay for the on-ramp that leads to the arena?
I can’t remember if that was mentioned in the book.

Still, there are people that travel huge distances to get to Leaf games.
I would hope that Ottawa citizens would be more than happy to make the same trek.

Posted by Hank1974 on 07/10/13 at 01:54 PM ET

Avatar

Still, there are people that travel huge distances to get to Leaf games.
I would hope that Ottawa citizens would be more than happy to make the same trek.

They were 6th in attendance this past season and operated at 101.3% capacity. Lots of people go to the games. That’s never been an issue in Ottawa.

But by putting an arena so far from the city, they basically eliminated whatever walk up crowd potential they had, seeing as the largest employer in the city, the federal government, has most of their offices downtown.

Posted by Chris M on 07/10/13 at 01:57 PM ET

Hank1974's avatar

So is the issue with corporate support?
You would think at 100+% capacity, they’d be rolling in dough.
Are ticket prices under valued?

Posted by Hank1974 on 07/10/13 at 02:00 PM ET

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Corporate sponsorship is definitely an issue because, again, the $ in this city is government, and they don’t buy boxes, packages, etc.

Ticket prices might be undervalued, not sure what the appetite of the city would be to pay for when they have to trek out there for so long on the highway and then pay $15 for parking, etc.

Not making excuses, it’s something all fans in a semi healthy hockey market have to deal with, just pointing out the obvious.

Also, I don’t necessarily believe the team is losing as much $ as Melnyk suggests. He owns the team, the building, and even the ticket vendor. I’d LOVE to see the books. A few years ago, a team rep said their gross was in the $120 million a year range. Are we to believe they’re spending upwards of $80 million on non-player expenditures?

Posted by Chris M on 07/10/13 at 02:06 PM ET

Hank1974's avatar

Also, I don’t necessarily believe the team is losing as much $ as Melnyk suggests. He owns the team, the building, and even the ticket vendor. I’d LOVE to see the books. A few years ago, a team rep said their gross was in the $120 million a year range. Are we to believe they’re spending upwards of $80 million on non-player expenditures?

LOL! I hear you.
Phil Esposito said that when he owned the Lightning their idea of ‘losing money’ was how much money you estimated to earn that season against how much you actually earned.
So they count on a sold-out building every night, with all parking spaces used, as well as a rough estimate on concession sales.
So they would estimate to grosse $100M that year.
But if they only made $80M, they’d proclaim a $20M loss, even if they only spent $60M in operating costs.

I’m sure Melnyk isn’t being truthful as to how much he’s making or losing.

P.S. Thanks for the info on the dynamic there in Ottawa. Very helpful. Thanks!

Posted by Hank1974 on 07/10/13 at 02:11 PM ET

Primis's avatar

yet is insistent that he will never sell the club, kind of a mixed message.

Posted by Chris M on 07/10/13 at 02:24 PM ET

He also swore up and down he would never sell his junior club.

He sold his junior club.

He’s a liar.  Just a plain old liar, trying to hold things together for as long as possible until it all falls apart.

Posted by Primis on 07/10/13 at 02:34 PM ET

Hootinani's avatar

I’m sure Melnyk isn’t being truthful as to how much he’s making or losing.

P.S. Thanks for the info on the dynamic there in Ottawa. Very helpful. Thanks!

Posted by Hank1974 on 07/10/13 at 03:11 PM ET

Melnyk and every other team owner.  We had a whole lockout over it and I still don’t think anybody in the NHLPA can tell you with a straight face what any NHL team considers revenue.

Posted by Hootinani on 07/10/13 at 06:38 PM ET

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