Speculation: Sens, Lebreton, and the NCC part II

[BloodRedArmy]

It's like this board is a microcosm of the Sens.

When there is talk of a sale, rumors, gossip, vague/ ominous clues from semi-reliable posters, it's exciting and I come back often.

When ding-dongs squabble about who's fault the attendance issues are, it's boring and I stop coming.

Excitement brings people in! It's that simple.

 

[coladin]

Fans want this team ran like a proper NHL franchise. If a owner can't afford to do that they should not own a NHL franchise. Pro sports franchises are not for penny pinchers and run the franchise on Skelton budgets and staff.

Fans won't throw their hard earned dollars down the drain when they see a mismanaged franchise continously degrading its product and brand.

EM has been running this team into the ground, he does not care about the fans or the longevity of the brand.His mismanangement , poor decision makng and health of this franchise makes me question if he really is even interested in running a pro sports franchise.

Owning a NHL franchise is a privilege that not many people get a chance to do but at the same time if you can't afford to be in this business time sell and move on.EM needs the move on.

You are so right. You have described this city's fans perfectly. If they want a big league team, well, act like it. Won't buy cheap, tarped seats to watch Karlsson but let's cry a river of tears that he may be going? And give him 12 million while you are at it , Eugene. Sniff.

Is Melnyk running the franchise into the ground...or is he trying to keep it afloat?

I don't think I have thrown my hard earned dollars down the drain. This season was a disaster, yes. But overall I have been blessed to have the experiences and memories that this team has given me, my family, and many others. Can anyone grow a pair and ride this out or shall they all abandon ship?

I think for someone in Melnyk's position, btw, I think his money was hard earned as well. If you see it as a privilege to lose millions, well, that type of attitude may be part of the problem around here. This is professional sports run by billionaires and performed by millionaires. It costs a lot of money and fan support in this league, unfortunately for everyone here, is still paramount.

Melnyk is not a good owner for a variety of reasons. But I will not abandon this team over it. I am big enough to separate the two and not petty enough to abandon ship.

 

[coladin]

Ummm... what about Chicago? Pittsburgh? Washington? Tampa? ALL examples of teams that struggled to fill the building when their product was complete trash. Look at Vancouver... they had like 1800000 sellouts in a row in their Bertuzzi/ Naslund/ Sedins heyday, and now?

Also, Ottawa has less than 1/6th the population of the GTA. That's 6 million potential customers vs. 1 million. Pretty significant, no? Plus, Toronto is stacked with corporate enterprises, whereas Ottawa's lifeline is a massive entity that is legally prohibited from sponsoring/ engaging in business with a sports franchise.

Then we have the Phoenix pay debacle. If you honestly think this has no part of what's going on with the Sens attendance woes, you're out to lunch.

Then add to that the location of the arena.

Oh, and by the way... when the pizza line was in full stride and the Sens were a powerhouse, how were the attendance numbers then?

Papered. Freebies.

So many excuses...

 

[Smash88]

You are so right. You have described this city's fans perfectly. If they want a big league team, well, act like it. Won't buy cheap, tarped seats to watch Karlsson but let's cry a river of tears that he may be going? And give him 12 million while you are at it , Eugene. Sniff.

Is Melnyk running the franchise into the ground...or is he trying to keep it afloat?

I don't think I have thrown my hard earned dollars down the drain. This season was a disaster, yes. But overall I have been blessed to have the experiences and memories that this team has given me, my family, and many others. Can anyone grow a pair and ride this out or shall they all abandon ship?

I think for someone in Melnyk's position, btw, I think his money was hard earned as well. If you see it as a privilege to lose millions, well, that type of attitude may be part of the problem around here. This is professional sports run by billionaires and performed by millionaires. It costs a lot of money and can support in this league, unfortunately for everyone here, is still paramount.

Melnyk is not a good owner for a variety of reasons. But I will not abandon this team over it. I am big enough to separate the two and not pretty enough to abandon ship.

Melnyk is not losing money.

 

[Take a Bath Son]

Looking at this from the outside...

Is this prospective family/investors looking to partner the same party that made the rejected offer mentioned earlier this summer?

Not sure if anyone is even allowed to answer that but this does seem promising...fingers crossed it works out.

Here's the list of canada's richest 100:

Canada’s Richest People: The Complete Top 100 Ranking

From Ottawa or with ties to Ottawa (I've included Guy Laliberte because he may have made an offer + he bid on lebreton):

Desmarais family Power Corp 8.38 Billion
Peter Gilgan Mattamy 3 billion
Guy Laliberte Cirque 2.14 billion
Terry Matthews Wesley Clover 2.12 billion
Greenberg Family Minto 1.57 billion
Tobias Lukte Shopify 1.17 billion
Eugene Melnyk 1.15 billion

If the pockets are really really deep, its one of them. My guess would be terry matthews, he's been branching out and has had good success with Brookstreet, supplier to the Sens right now. Any new hotel on lebreton would be his with this investment.

If the pockets are slightly less deep, I'd say its a construction family-Tomlinson etc...

Alternatively, it could be a red herring to get Laliberte to up his bid.

 

[DrunkUncleDenis]

Hope this worked. This is for my favorite mod on HF Sens. This is a picture of the area where I am vacationing for the month in southern Italy. I have included a picture of my watch which is the local time. See people, no lies . And this is in the region of Calabria. Amazing beach towns in some of the best beaches in Italy.

Yo this is absolutely epic

well done.

 

[NorthCoast]

Papered. Freebies.

So many excuses...

Lol...yeah, like the Senators invented papering. Or do you seriously believe that this does not happen to some degree in every small/mid-sized market? Half the teams in the league have had playoff/reg season attendance issue at one point or another.

I'm not one of the unrealistic fans that expect the team to pay more on player salaries than the market can handle. The sens are middle of the pack in terms of revenue, and my expectation is that they will be middle of the pack on team payroll.

Do you believe that, considering the size of the market, the fanbase can realistically support a cap team perpetually (ie: compete with large markets), through better attendance alone?

Ticket revenues account for approx. 35% of revenue, or approx. 40 mil. So if you want to spend to the cap lets say you need another 15-20 mil, because we won't always have contracts with higher cap value than real cost.

So basically ticket prices would have to increase by 1.5X across the board. Keep in mind that this is a fanbase that already spends 3-4 times more than Leaf fans per capita on tickets. (Likely much, much more if corp. tickets were factored in)


Not saying that provided the team does a better job with the product, that the market can't be better than the last couple years. However, this is not really what is going to make/break the team spend to the cap.

- More profit from facility (Lebreton - Check)
- Better media deal (Already have TSN - Check)
- Improved Canadian dollar (out of team control)
- Improved revenue sharing (Hopefully as TV because larger piece of revenue sharing will increase. Team should be more vocal about this)
- Close state tax loopholes (Probably only 1-2%, but could easily be done through rev sharing. )
- Change government rules on buying tickets (They have to find a way to do more on this front)
- Eliminate team debt (Wouldn't it be nice for the team to not have to cover 10 mil debt interest every year. Minority owner could resolve this. vinic wiped out TB debt when he bought the team, just sayin)
- Increase rev split for owners (Yay! another lockout...but 60% share without increase cap would help team spend more)

Even if all the above happen, revenue sharing is really the only way you can guarantee team payroll parity in my opinion. Without it you will never spend at the same level as TO or NY.

 

[BankStreetParade]

Melnyk is not losing money.

How do you even know that? Please show us some proof so we can all end this stupid debate once and for all.

 

[Tuna99]

How do you even know that? Please show us some proof so we can all end this stupid debate once and for all.

The franchise is valued at $500 million. I’m not a business expert but if you buy something for $100 million and 15 years later it is worth $500 million (or $25-30 million value increase per year) then there’s a good bet it’s a profitable business - again, I’m not a business expert but I think that’s how things work

 

[NorthCoast]

has this city ever in its history regularly filled the building at average league ticket prices? no. ticket giveaways were huge and prices were low by league standards. people saying "an owner spends and we'll spend" are making noise. this market has never worked this way. TV deals have gone crazy and that's driven salaries crazy. The cap coming out of the 04 lockout was 39. Today it knocks on 80. That's a double in 14 years. Have salaries doubled? nope. have ticket prices doubled? nope. the team spent and was run properly for 10 + years under melnyk. but in those years it was never able to consistently fill the building at average prices or better. saying otherwise is simply not true. so whose fault is it that we cannot sell? arguably everyone's. so many factors in play. corporate season tickets aren't where they need to be because businesses selling to the feds cannot entertain their clients. compounding on that is the NHL's own survey noting this market has the smallest potential corporate base to sell in to. as far as joe fan goes we do well however this market is very much a place where people end up for employment as opposed to being from here and in this crazy country that means people arrive with their hockey prejudices in tact. a lot of people with money aren't Sens fans, they are fans of where they are from. the population is growing...but are they Sens fans?

this argument about the team needing to spend in a show me kind of way is simplistic and off base.

there is a problem in this market where the market itself struggles to generate revenue in order to spend where some here think we should. that is a very simple mathematical reality.

there are only 2 ways around it
1. increase revenue thru increased gates (can't increase tv deals because they are locked for another 8 years or so)
2. an ownership group prepared to spend at a level that revenue doesn't support

some combo of both works and is likely the solution. maybe lebreton resolves point 1. but in order to get there there is the small matter of needing 500M + to build a new facility and that is going to cause a tightening of the belt

sorry to rant.....but I don't buy at all the argument of you spend and we'll spend. I think it is a convenient mask that people hide behind

Ottawa and Tampa Bay generate approx the same annual revenue. Why are they cup contenders trying to acquire Karlsson to add to its 3-4 superstars, and Ottawa is having to sell-off our 1 superstar?

Seriously curious what your take is on this?

 

[BankStreetParade]

The franchise is valued at $500 million. I’m not a business expert but if you buy something for $100 million and 15 years later it is worth $500 million (or $25-30 million value increase per year) then there’s a good bet it’s a profitable business - again, I’m not a business expert but I think that’s how things work

The increase in value is not specifically correlated to the success of the Ottawa franchise. The value is derived artificially. There were increases due to renegotiating the national TV deals as well as the universal inflation of team values to account for expansion teams wanting to do business.

In a vacuum, the Senators franchise would barely be worth half of what you're suggesting because of the limitations of the market.

So no, increase in value does not equate to profitability.

But again if you can provide us the financial documents that can prove with finality what the fiscal health of this franchise is like that would be amazing.

 

[Micklebot]

The increase in value is not specifically correlated to the success of the Ottawa franchise. The value is derived artificially. There were increases due to renegotiating the national TV deals as well as the universal inflation of team values to account for expansion teams wanting to do business.

In a vacuum, the Senators franchise would barely be worth half of what you're suggesting because of the limitations of the market.

So no, increase in value does not equate to profitability.

But again if you can provide us the financial documents that can prove with finality what the fiscal health of this franchise is like that would be amazing.

Step 1: Demands somebody provide proof of their claim.
Step 2: make completely unverifiable claim
Step 3: Profit

 

[BankStreetParade]

Ottawa and Tampa Bay generate approx the same annual revenue. Why are they cup contenders trying to acquire Karlsson to add to its 3-4 superstars, and Ottawa is having to sell-off our 1 superstar?

Seriously curious what your take is on this?

Ottawa and Colorado, Buffalo, New York Islanders, Calgary, New Jersey, Minnesota, Dallas and Detroit generate approx the same annual revenue. Why is Ottawa supposed to be a cup contender when so many other teams in the same revenue bracket are not?

 

[RealSpartan]

I'm mostly a lurker here but I just felt like saying that I find it curious to read someone asking someone else for proof of financial documentation to support a claim two sentences after making a similar claim without any said proof.

Edit: Micklebot beat me to it.

 

[Tuna99]

The increase in value is not specifically correlated to the success of the Ottawa franchise. The value is derived artificially. There were increases due to renegotiating the national TV deals as well as the universal inflation of team values to account for expansion teams wanting to do business.

In a vacuum, the Senators franchise would barely be worth half of what you're suggesting because of the limitations of the market.

So no, increase in value does not equate to profitability.

But again if you can provide us the financial documents that can prove with finality what the fiscal health of this franchise is like that would be amazing.

That’s like saying that the Macdonalds restaurant is only profitable and increase its value every year because it’s part of the Macdianlds empire, if it was just a truck stop burger diner it wouldn’t be worth the same as a Macdonalds franchise.

I cannot provide you with Ottawa Senators accounting documents to show anything, so instead of assuming The Sens are losing money as you do, I look at the value of the franchises league wide increasing, the money generated from TV revenue, listen to the commissionaire saying The ottawa franchise is secure and stable, rumours of multiple bids for the franchise and assume the franchise is making a profit - but who cares if Melnyck is maki by a profit or not, I think we can agree he’s done a horrid job increasing the value of the franchise and a horrid job of engaging his fanbase - and yet the franchise value increase.

That’s how billet proof an NHL franchise is, the owner can literally berate and offend his fanbase and it still turns a profit. One of the reasons for Melnycks arrogance to Ottawa is because he probably is making a ton of money and sees a city council and the fan base that criticized him as a nuisance.

If Ottawa was losing money Melnyck would have an entirely different tone and relationship with the fans.

 

[Smash88]

How do you even know that? Please show us some proof so we can all end this stupid debate once and for all.

Why is he so hellbent on keeping the team and passing it on to his daughter and such, if it's such a bad deal?

I can't prove anything, I can only go by assumptions just like everyone else, but I'm not stupid.

Just him owning the building and getting it for a rock bottom price, would ensure he will always make money.

 

[BankStreetParade]

Step 1: Demands somebody provide proof of there claim.
Step 2: make completely unverifiable claim
Step 3: Profit

1. Yeah if someone makes a statement like "Melnyk is not losing money" I would expect that person should be able to back it up with actual proof. Or do we not do that anymore these days? We all get to say whatever the hell we want with absolutely no onus to provide evidence to support our position?
2. There's lots of ways to calculate business value. How much would you value a business that generates about $120 million per year and might generate a 5-8% operating income? Remember, you're calculating this value in a vacuum of the Ottawa Senators existing as a standalone business. It's just not worth anywhere near $500 million or more.

 

[mysens]

You must not be following this franchise for very long or are new to the city. Its one of the two.

However to save yourself the embarrassment go review the attendance figures from the last 20 years. Its not very hard to find.

The irony of you calling out other people for having a sense of entitlement is just incredible.

Wrong in both accounts. I have been a season ticket holder since the building opened in 1996. Yes, I know all issues associated with poor attendance. I have been there through the droughts and when it is at capacity. What I also know is the constant whining of the fans on this form, blaming parking, food, the non existent traffic this year, the temperature of the water and of course the owner. It’s rather pathetic, they want the best players in the world here and to resign, all the while not attending the games. Not going to happen. But apparently the fans here have the sense of entitlement on all of the above.

 

[Micklebot]

That’s like saying that the Macdonalds restaurant is only profitable and increase its value every year because it’s part of the Macdianlds empire, if it was just a truck stop burger diner it wouldn’t be worth the same as a Macdonalds franchise.

I cannot provide you with Ottawa Senators accounting documents to show anything, so instead of assuming The Sens are losing money as you do, I look at the value of the franchises league wide increasing, the money generated from TV revenue, listen to the commissionaire saying The ottawa franchise is secure and stable, rumours of multiple bids for the franchise and assume the franchise is making a profit - but who cares if Melnyck is maki by a profit or not, I think we can agree he’s done a horrid job increasing the value of the franchise and a horrid job of engaging his fanbase - and yet the franchise value increase.

That’s how billet proof an NHL franchise is, the owner can literally berate and offend his fanbase and it still turns a profit. One of the reasons for Melnycks arrogance to Ottawa is because he probably is making a ton of money and sees a city council and the fan base that criticized him as a nuisance.

If Ottawa was losing money Melnyck would have an entirely different tone and relationship with the fans.

The franchise itself may very well not be making a profit, and heck, even if you're more intellectually honest, and consider ulterior or secondary revenue streams like the arena which wouldn't really exist without the franchise, they may not always be profitable without the growth of franchise value considered. The cost of ownership could exceed the value growth and income while you own it, but that's not the sole value these things hold; it's a bit of a status symbol to the rich, so that can boost the "franchise value" too. There's also value in potential; just because Melnyk is presumably doing a poor job running the franchise, doesn't mean another rich dude doesn't see potential to turn things around and make a profit.

 

[Micklebot]

1. Yeah if someone makes a statement like "Melnyk is not losing money" I would expect that person should be able to back it up with actual proof. Or do we not do that anymore these days? We all get to say whatever the hell we want with absolutely no onus to provide evidence to support our position?
2. There's lots of ways to calculate business value. How much would you value a business that generates about $120 million per year and might generate a 5-8% operating income? Remember, you're calculating this value in a vacuum of the Ottawa Senators existing as a standalone business. It's just not worth anywhere near $500 million or more.

You don't seem to be addressing my point. I have no issues with stating the fact that we don't have access to the required info to determine if the team makes or loses money. I do have an issue with admonishing people for taking assumptions as facts, and then doing the exact same thing themselves one sentence later.

 

[Micklebot]

, the non existent traffic this year,

Of course there was no traffic this year; barely anybody showed up

 

[mysens]

If the family coming in has the same opinion of the people in this city as you apparently do, they should probably stay away. I wouldn't think it a good business practice to get into a market where you already have an adversarial relationship with your clients...

What is good business practice in this world of sports? Sign big money players while the fans opt out to not support the team by placing their butts in the seats? They justify it to themselves for a number of silly reasons to not show up to see the best player in the world on their team? Where is this money coming from. This family who is honing in on this partnership is not in it to lose money. That will be made very clear from the beginning, or should they come straight out and tell everyone it’s ok to stay home, don’t spend your money to support us, we just sold off and liquidated 35% of our holdings. If we lose it, oh well, shucks. I am not sure about the business practice you are eluding to.

 

[BatherSeason]

What I also know is the constant whining of the fans on this form, blaming parking, food, the non existent traffic this year, the temperature of the water and of course the owner. It’s rather pathetic, they want the best players in the world here and to resign, all the while not attending the games. Not going to happen. But apparently the fans here have the sense of entitlement on all of the above.

My favorite argument that these Melnyk's supporters continue to assert is that these complains are only happening on HFBoards. Its utterly mindboggling that you guys think that this is the only place where people run to complain about Melnyk. Go to Reddit, read some blogs, go on Twitter, ask people around the city how they feel about your Supreme Commander.

 

[mysens]

Of course there was no traffic this year; barely anybody showed up

Good one.

 

[Ice-Tray]

There are no EM supporters or apologists. We really should try and stop trying to force this divisiveness. This simplistic 'us vs them' way of trying to single out groups on the boards is pretty lame, and it's generally the same three guys doing it.

It reminds me of the great Fisher debates. What happens is that some posters goes to the ultimate extreme with their arguments against someone, and other posters who hold a more moderate view feel compelled to try and reign in such fans so as not to have their view be the dominant voice in the thread. They end up arguing seemingly in favour of a person that they don't necessarily support, when really they just don't feel as extreme and are just arguing a less extreme version of the same position.

The reality here is that no one is happy with the ownership situation, and no one is a fan of EM around here. People are concerned though that some of the loudest voices are being disingenuous when looking at the attendance and budget issues and not accepting that the fan base also has to take some responsibility if things are to be turned around. It's not enough for new ownership to come in and spend more, there will be an expectation that fans will have to spend more as well, especially if people want/expect a cap team. Flamingo in the only poster I can recall who has actively committed to spending more if the ownership situation is sorted out.

We can all understand that EM has alienated the fanbase, but the fix is not likely to be a super rich owner that's ok losing money every year to fund a cap team while charging the cheapest ticket prices in Canada and dealing with less than full arenas. It's more likely to be a properly funded organization that runs a budget team that reflects the markets ability to spend on the team. The more you spend the more you get.

Fans need to be committed and ownership has to be committed, pretty simple, it's common sense really. So let's try and leave the EM apologist/defender stuff in the trash where it belongs, it's lowest common denominator stuff and makes us all look bad.