News Article: Karlsson and Dorion/Melnyk didn't talk after November

[Sensung]

There's a much larger number of private Corporate businesses to draw from in Edmonton, and Ottawas' largest employer is the Federal Government, which by law, buys zero tickets/private boxes.

Does this need to explained to you, again?

From 2013 to 2016 the Oilers revenue was 434 M
Over the same period the Sens revenue was 437 M

 

[Tnuoc Alucard]

Likely a loan, the NHL has a low interest line of credit which teams can use. Assuming regular payments and a 2% interest rate (that's the last I read for the NHL line of credit) the borrowing cost for a 10 mil loan over one season is about 110k , then they'd take out another loan for the next signing bonus.

If Ottawa can't secure financing for players bonuses, or isn't willing to pay a 100k to service a short term loan to secure the best dman in the game, then Melnyk is in a bigger financial crisis, or cheaper than we thought.

The more likely reason for resisting bonuses is about what happens if there is a lockout or the player is traded after the bonus paid, but that's less of a market issue and more of an desire to increase leverage for future CBA negotiations.

You tried this before, but again I'll point to the same article that states ...

"The NHL's legal team, which is based in the United States, failed to ensure that the league's now-$2-billion (U.S.) line of credit complied with Canadian government regulations when it was launched in October, 2014.

As a result, none of the seven Canadian-based NHL teams can take advantage of the low-interest credit facility, which is managed by Citi, the vast New York-based financial services company."

NHL’s low-interest line of credit ruled offside in Canada

Published January 20, 2015 Updated May 12, 2018


When I brought this article to your attention the last time (with the last ten days or so) I asked if there was something you knew, that I did not, and I never heard from you about it.

Therefore we have to assume the Canadian based teams are still not able to access the NHL Line of credit .......... and that means the 13 Million dollar signing bonus that Connor McDavid recieved this July came from somewhere else.

 

[Tnuoc Alucard]

From 2013 to 2016 the Oilers revenue was 434 M
Over the same period the Sens revenue was 437 M

What were their expenses?

 

[Micklebot]

When I brought this article to your attention the last time (with the last ten days or so) I asked if there was something you knew, that I did not, and I never heard from you about it.

Maybe if you read the response I made at the time, instead of ignoring it and claiming I never responded...

Here's the article about the NHL bringing Canadian teams into the fold.

NHL welcomes Canadian teams to loan pool

And here's Bill Daly talking about Canadian teams being included now

“The issue when we launched the credit facility was that we had some issues with the Canadian government, with respect to including our Canadian teams and giving them access to the credit facility,” said Bill Daly, NHL deputy commissioner. “That’s what we’ve been working on the past year, and that’s really the change in the credit facility: that Canadian clubs can now participate.”

 

[Sensung]

What were their expenses?

The Sens have had a positive operating income since 2011.

The expenses to run an NHL team would be similar, with the Oilers spending more for their travel.

If Melnyk has choosen a debt financing business model that is putting him at a disadvantage, the problem is his, not the fans.

 

[Sens of Anarchy]

Do these NHL team revenue and finance discussions really belong here? You have a Sens Finance/Melnyk thread already

 

[Micklebot]

What were their expenses?

He was responding to your claim about revenue streams (less corporate support, gov't can't buy tickets) was the difference between the two markets. If revenue was similar, then the lower corporate support and Gov't inability to buy tickets wasn't enough to justify an inability to pay players.

You might be right that expenses are the difference, but you're moving the goalposts by abandoning your earlier position.

 

[Sensung]

Do these NHL team revenue and finance discussions really belong here? You have a Sens Finance/Melnyk thread already

In the context of why the Sens didn't offer Karlsson a market level deal, yes I think they are germane to the thread.

 

[Sensung]

He was responding to your claim about revenue streams (less corporate support, gov't can't buy tickets) was the difference between the two markets. If revenue was similar, then the lower corporate support and Gov't inability to buy tickets wasn't enough to justify an inability to pay players.

You might be right that expenses are the difference, but you're moving the goalposts by abandoning your earlier position.

Yup, but it us fun watching him squirm.

And the ONLY major difference in expenditures would be servicing the debt.

When he gets there, we'll see what rational he can come up with that puts the responsibility on fans for that choice. Should be good for a laugh.

 

[Micklebot]

Do these NHL team revenue and finance discussions really belong here? You have a Sens Finance/Melnyk thread already

In that they are related to the ability to offer Karlsson signing bonuses, sure, but I think you're right that they shouldn't stray from that. Also, I don't really think they belong in the boycott Melnyk thread or the could we loss the team thread. Might be worth having a Sens attendance, and finances discussion thread though if people want to discuss beyond just the ability to re-sign Karlsson specifically.

So to rehash, we have the argument that
1. the sens offered a competitive contract, but without signing bonuses
2. the sens can't afford to offer signing bonuses, so that's why one wasn't offered.

Counterpoints:
1. similar revenue markets (edmonton for a period of time) had no problem offering bonus money to their stars.
2. the cost of borrowing is about 100k for each year with a 10 mil signing bonus (assuming access to the league credit facility at 2%, but heck, go ahead and double it and it's still reasonable).

Not sure we really need to go much further than that here, so make sure any future finance talk has a direct tie to Karlsson if you want it to be in this thread please, it's ok to refute the above so long as it stays tied to the intent of the thread.

 

[coladin]

The Sens have had a positive operating income since 2011.

The expenses to run an NHL team would be similar, with the Oilers spending more for their travel.

If Melnyk has choosen a debt financing business model that is putting him at a disadvantage, the problem is his, not the fans.

Operating income means nothing lol. How many times are you going to ignore this. You are out of your element dude

 

[Sensung]

Operating income means nothing lol. How many times are you going to ignore this. You are out of your element dude

Operating income means something.

The fact that the data is collected proves this fact

 

[Tuna99]

There's a much larger number of private Corporate businesses to draw from in Edmonton, and Ottawas' largest employer is the Federal Government, which by law, buys zero tickets/private boxes.

Does this need to explained to you, again?

Yes, please explain it again and give us the breakdown of what Ottawa can afford while you are at it - they can afford Bobby Ryan but not Erik Karlsson, they can’t afford Alfie but can afford Kovakev - it’s so confusing. Can they afford Stone and Duchesne?

 

[Multigrain]

The #Ottawarising is probably the worst marketing idea of all time. Appears to be more of a revolt than a positive rebuild. I can't imagine what will happen to this team. the Karlsson saga, The Hoffman trade, Smith waivers. Shedding major salaries. Is the end in sight?

 

[Tnuoc Alucard]

Maybe if you read the response I made at the time, instead of ignoring it and claiming I never responded...

Here's the article about the NHL bringing Canadian teams into the fold.

NHL welcomes Canadian teams to loan pool

And here's Bill Daly talking about Canadian teams being included now

To be honest with you, I never saw your reply ........ and thank you for this article.

However I do notice that it is dated Jan of 2016, while the G&M article was updated in May of this year, and makes no mention of the Canadian based teams being included.

So I'm not sure how you can explain that.


The paragraph that jumped out at me was as follows ..


NHL teams can borrow up to $100 million from the credit facility, which is backed by national media contracts. That amount means that for now, if teams were to borrow to the maximum amount, no more than three of the NHL’s seven Canadian teams could borrow from the credit facility.

So it seems to suggest that there are some limitations on the number of teams that have use to the fund, and I would suggest that the larger market teams are more apt to use it, and thereby making it redundant to the smaller market teams.

 

[Tnuoc Alucard]

If Melnyk has choosen a debt financing business model that is putting him at a disadvantage, the problem is his, not the fans.

So you know, like everyone else, that the Senators carry a lot of debt, and that puts the Senators at a distinct disadvantage it terms of having the cash on hand to pay out huge bonuses, like the ones discussed.


If you cannot accept this as a reality of how the Senators are operated, then that is your problem, and to constantly compare apples to oranges to some how cast more negativity on the Senator franchise, the owner and GM, is really disingenuous.

 

[Micklebot]

To be honest with you, I never saw your reply ........ and thank you for this article.

However I do notice that it is dated Jan of 2016, while the G&M article was updated in May of this year, and makes no mention of the Canadian based teams being included.

So I'm not sure how you can explain that.


The paragraph that jumped out at me was as follows ..


NHL teams can borrow up to $100 million from the credit facility, which is backed by national media contracts. That amount means that for now, if teams were to borrow to the maximum amount, no more than three of the NHL’s seven Canadian teams could borrow from the credit facility.

So it seems to suggest that there are some limitations on the number of teams that have use to the fund, and I would suggest that the larger market teams are more apt to use it, and thereby making it redundant to the smaller market teams.

1st, what they suggested was if the other 23 non Canadian teams had already maxed out their 100 mil in availability, there would only be enough credit left for 3 of the Canadian teams remaining (assuming they also were maxing out their 100 mil). The reality is not every team is taking advantage, Forbes estimates had 6 of the American clubs with zero debt. Teams like Toronto and Mtl don't need low interest lines of credit.

It's highly unlikely that the credit facility is maxed out. It's also highly unlikely that there isn't 10 mil in credit available for the sens to use for a bonus payment. Even in the event that the credit facility were maxed out, it wouldn't affect the point I made, that the cost of borrowing is a pittance in the grand scheme of things, double the 100k cost of financing if you want, and it's still a reasonable 200k to finance that 10 mil bonus. Pretty sure they'll lose more than that in revenues by not having Karlsson around.

I'm also not sure why you think large market teams would be more apt to dipping into the credit facility. That makes zero sense whatsoever...
In fact, from the 2015 article

NHL insiders say the league's credit facility is not drawing full participation even from teams that have access to it. The wealthier teams do not need it because they have their own sources of money at equally low interest rates

forgot to comment on why the older article wasn't updated to include the new info: Updates don't typically change the content of the article, at the time, canadian clubs were not able to use the facility. That remains true, at that time they weren't. They may have updated an inaccuracy at the time, we don't know. There would be little value in updating a 2015 article with new info, because nobody would go back to read it. Rather, updates are typically corrections when something incorrect was stated, or typos. Daly very clearly stated the facility was open to Canadian clubs. I'll take his word on this one

 

[Sensung]

So you know, like everyone else, that the Senators carry a lot of debt, and that puts the Senators at a distinct disadvantage it terms of having the cash on hand to pay out huge bonuses, like the ones discussed.


If you cannot accept this as a reality of how the Senators are operated, then that is your problem, and to constantly compare apples to oranges to some how cast more negativity on the Senator franchise, the owner and GM, is really disingenuous.

It's not disingenuous in the least to point out that THE CHOICES MELNYK HAS MADE ARE THE REASON THIS TEAM IS HAVING TROUBLE COMPETING.

Disingenuous would be pretending that 1) that is the ONLY way to run this franchise. 2) that Sens fans should foot the bill to make HIS business model work for him. 3) that the team doesn't generate enough revenue to compete.

You can choose to bend over and take it...I'll choose to fight for a better outcome for hhe team I love.

 

[Tnuoc Alucard]

It's not disingenuous in the least to point out that THE CHOICES MELNYK HAS MADE ARE THE REASON THIS TEAM IS HAVING TROUBLE COMPETING.

Disingenuous would be pretending that 1) that is the ONLY way to run this franchise. 2) that Sens fans should foot the bill to make HIS business model work for him. 3) that the team doesn't generate enough revenue to compete.

Again, you will not accept the reality of how this Owner, has decided to operate this franchise.

He relies on the revenues generated, by the team, to operate the team, and finance the debt etc etc .. he has clearly stated, on numerous occasions, that this is how he's operating his franchise. You and I don't have to like it, we just have to accept it, and try to understand the decisions that are made with this reality in mind.


You constantly point to the "operating income" as reported to Forbes, and reminding everyone about the HUGE TV deal the Senators, and the rest of the Canadian based teams signed ..............and you don't take into account the vast differences in the Markets, when you compare teams.

BTW, the HUGE TV deal has not as much impact as you would have us believe.

Remember that it is paid in Canadian dollars, and the vast majority of expenses the Senators have, are paid in US dollars, and since the TV deal was signed, the exchange rate has dropped, and in terms of US dollars it worth 30%. less than it was at inception.

 

[Micklebot]

Again, you will not accept the reality of how this Owner, has decided to operate this franchise.

He relies on the revenues generated, by the team, to operate the team, and finance the debt etc etc .. he has clearly stated, on numerous occasions, that this is how he's operating his franchise. You and I don't have to like it, we just have to accept it, and try to understand the decisions that are made with this reality in mind.


You constantly point to the "operating income" as reported to Forbes, and reminding everyone about the HUGE TV deal the Senators, and the rest of the Canadian based teams signed ..............and you don't take into account the vast differences in the Markets, when you compare teams.

BTW, the HUGE TV deal has not as much impact as you would have us believe.

Remember that it is paid in Canadian dollars, and the vast majority of expenses the Senators have, are paid in US dollars, and since the TV deal was signed, the exchange rate has dropped, and in terms of US dollars it worth 30%. less than it was at inception.

Operating income numbers already account for the local tv deal being in canadian dollars and the changing rate of excjange. The tv deal is a big part of why operatin imcome is in the positive despite the rate of exchange

 

[DaveMatthew]

Good article on Karlsson, although yet another depressing one for Sens fans:

His heart still in Ottawa, Karlsson focused on the Cup in San Jose

Simmering under all of this heartbreak was the uncertainty over his future with the Senators and, in turn, his family's future in Ottawa, a city where they met, got engaged -- Erik hid her ring inside of a pizza box -- and where they were married in 2016, at the National Gallery of Canada. To say goodbye to all of this was, frankly, overwhelming for the couple.

Karlsson hadn't spoken to Melnyk nor Dorion for over 10 months before the trade. "No, we never discussed it. Obviously, I figured out which way they were going. It was fine by me. But we really didn't get into those discussions," Karlsson said. "They tried to move me from January on. I kinda figured I wouldn't be a part of it."

But there's a nagging disconnect between Dorion's and Karlsson's version of the breakup. The Ottawa general manager claims he wasn't sure Karlsson was out on a rebuild until after July 1, when the player ghosted the team after a contract offer.

Would Karlsson have been a part of a rebuild in Ottawa or not? The defenseman remains cagey about it.
"I never got the opportunity to get to that point. So, there's no reason to speculate if that would have been the case or not, because we never got to that. I'm sitting here [in San Jose] right now. And I'm excited about it," he said.

Wherever the Karlssons end up, Erik has made it clear in the aftermath of this dramatic trade: There is the place where they'll live, and then there's home. "To all the fans, to all the people that live [there] ... Ottawa is a city that I will set my roots in and forever stay in," he said. "Even though I'm not going to represent [the Senators] anymore, it's always going to be my home."

 

[Sensung]

Hey @Jtown, I thought Carkyk was going to win and then sue the Sens, the NHL, the NHLPA, and the Karlsson's.

 

[ReginKarlssonLehner]

Lol is that a pic of EK when he was 21 or something

 

[great1]

Lol is that a pic of EK when he was 21 or something

It was from a day or two after the Eastern Conference Finals defeat, Erik shaved his goatee.

 

[Sensung]

Again, you will not accept the reality of how this Owner, has decided to operate this franchise. He relies on the revenues generated, by the team, to operate the team, and finance the debt etc etc .. he has clearly stated, on numerous occasions, that this is how he's operating his franchise. You and I don't have to like it, we just have to accept it, and try to understand the decisions that are made with this reality in mind.

Why do I, or any Sens fan, have to accept it?

Why would you want to accept it?

The whole point of boycotting the team is to reject his business model and continued ownership.

I'm doing what I can to fight back. You are saying we should not only bend over take it, but empty our bank accounts to pay for the privilege if making that POS rich.

You constantly point to the "operating income" as reported to Forbes, and reminding everyone about the HUGE TV deal the Senators, and the rest of the Canadian based teams signed ..............and you don't take into account the vast differences in the Markets, when you compare teams.

BTW, the HUGE TV deal has not as much impact as you would have us believe.

Remember that it is paid in Canadian dollars, and the vast majority of expenses the Senators have, are paid in US dollars, and since the TV deal was signed, the exchange rate has dropped, and in terms of US dollars it worth 30%. less than it was at inception.

Speaking of disingenuous, why do you constantly introduce this red herring?

The TV deal and all source of revenue and expenses are converted to US dollars in the Forbes calculations.

You bring up McDavid with regards to star players bonus money, yet ignore the fact that Ottawa is a bigger city with similar revenue streams. Edmonton also faces the same currency issues YOU claim is such a problem for Melnyk.

Unless you have a financial incentive to support Eugene I can't see why you would so vehemently defend the undefendabe.

#Melnykout