#Melnykout/The Melnyk problem

[Sens of Anarchy]

Haven't the #MelnykOut billboards already had their 15 minutes?

 

[Cosmix]

I wanted a phone like that, but they don't make them any more.

Good point, though. The team needs to be better. The game night production needs to be better. It costs a lot to go to a game, and customers deserve better. Invest, Mr. M., invest.

Yes, the team needs to be better, make the playoffs and win a round or two, while playing exciting goal-scoring hockey, not defensive low scoring games.

Yes, the game experience must be improved. It has gotten tired, stale and repetitive. The between periods entertainment must be improved and made more interesting. Reward people for coming to the games. Have some draws for prizes that fans would like such as Senators clothing and other merchandise. Have some bands playing in the concourses (jazz, Dixieland, pipes and drums, etc.). Make it fun. Have theme nights.

 

[harrisb]

I think all of Ottawa's problems could be solved if they put blockchain in their name.

Can’t with Dorion and Melnyk at the helm...Dorion doesn’t deal in “smart contracts” and Melnyk doesn’t believe in a trust relationship and has proven to not use currency of any value. Sorry this one was too easy, thanks for the softball

 

[2CHAINZ]

Can’t with Dorion and Melnyk at the helm...Dorion doesn’t deal in “smart contracts” and Melnyk doesn’t believe in a trust relationship and has proven to not use currency of any value. Sorry this one was too easy, thanks for the softball

I agree with you however I believe if they put blockchain in their name the senators become worth at least 4x it' current price.

 

[topshelf15]

It's just insane.

Would any other team unload a 28 year old who's a top 5 player in the game and pretty much already a lock for the HOF?

If you can't keep a player like that, you shouldn't be in the hockey business.

Because EM only cares about himself and what he can gain.....There is a reason why the team carries so much debt,its because he pulled out his money already...And uses the team to pay it down

 

[topshelf15]

The debt is also another huge reason as to why he wont sell,even if he get 500 mil for the team....That debt will eat a very large chunk of that money.....

 

[Canadian Time]

The debt is also another huge reason as to why he wont sell,even if he get 500 mil for the team....That debt will eat a very large chunk of that money.....

Sorry but this makes zero sense. Plenty of businesses and individuals have debt, it doesn't stop selling even a little bit. Melnyk will sell when the team is at it's peak in value, that will be once the Lebretton project is underway.

I'm still fairly confident that Karlsson and Duschene will re-sign, the issue will be surrounding them with enough talent to compete.

 

[topshelf15]

Sorry but this makes zero sense. Plenty of businesses and individuals have debt, it doesn't stop selling even a little bit. Melnyk will sell when the team is at it's peak in value, that will be once the Lebretton project is underway.

I'm still fairly confident that Karlsson and Duschene will re-sign, the issue will be surrounding them with enough talent to compete.

You sure ???Why would anyone carry so much debt,usually its to better your buisness that you borrow money....Why do we need to be 100,s of millions in debt??

 

[JD1]

You sure ???Why would anyone carry so much debt,usually its to better your buisness that you borrow money....Why do we need to be 100,s of millions in debt??

what makes you think that the debt is from borrowing money?

the most likely explanation for the teams debt from an accounting and legal perspective is he increased the debt to pay himself back for covering losses.

we'e in debt because for years we lost money

 

[topshelf15]

what makes you think that the debt is from borrowing money?

the most likely explanation for the teams debt from an accounting and legal perspective is he increased the debt to pay himself back for covering losses.

we'e in debt because for years we lost money

According to whom??EM??

 

[JD1]

According to whom??EM??

according to multiple reports written over the first 10 years of his ownership the team ran at an operating loss. That's real money and it has to be paid out. Where did that money come from? The sum total of those operating losses would have been covered by Melnyk. The increase in debt most likely results from refinancing to repay the operating loans.

If you've got a better explanation that makes sense from an accounting and corporate law perspective. ... let's hear it

 

[topshelf15]

I'm talking years back....many CBAs since then. we had a 2nd level box and they sat directly beneath us in the 2nd level. Carol Alt was a fav in those days.

Yep and the previous owner went under.......He had not much money to begin with,but to say we have lost 100,s of millions without any proof other than our owners say so ....Yeah nobody is buying that sorry

 

[Micklebot]

Teams carrying debt is fine. What's important is that they are in a position to be able to pay it down. Mtl has millions in debt too, but they can pay it off at any time. Dallas carries a similar debt load to us as well, but nobody complains about it. Debt is fine if you have the revenue to match it.

 

[Mingus Dew]

Teams carrying debt is fine. What's important is that they are in a position to be able to pay it down. Mtl has millions in debt too, but they can pay it off at any time. Dallas carries a similar debt load to us as well, but nobody complains about it. Debt is fine if you have the revenue to match it.

The more leverage you have the better your returns are. It’s a financial tautology.

Unfortunately leverage also bumps up risk, but YOLO.

 

[Gil Gunderson]

Teams carrying debt is fine. What's important is that they are in a position to be able to pay it down. Mtl has millions in debt too, but they can pay it off at any time. Dallas carries a similar debt load to us as well, but nobody complains about it. Debt is fine if you have the revenue to match it.

Minnesota has a very similar debt structure and comparable revenues to us. Tampa too I

Their ownership is committed to winning.

 

[Nac Mac Feegle]

Because EM only cares about himself and what he can gain.....There is a reason why the team carries so much debt,its because he pulled out his money already...And uses the team to pay it down

It's not like he put much into the team. He got it or next to nothing, then immediately piled a bunch of debt onto it. He's been using the team like a personal credit card.

 

[harrisb]

It's not like he put much into the team. He got it or next to nothing, then immediately piled a bunch of debt onto it. He's been using the team like a personal credit card.

This right here, he has more debt than the cost for the team, arena, surrounding land, the ticketing company and all the sensplexes that existed. He piles debt on the team while the others entities make massive profits, it's really not that difficult to understand what he is doing from an accounting perspective. This way he can claim poor and the team loses money while charging ridiculous rent, concessions, fees, etc where those profits are booked by the other entities, meanwhile the sens show a debt.

Anyone with accounting 101 knows what he is doing, the problem is that he is FOS and separates the team from the other entities when talking meanwhile using them as a debt bucket. If you want to do this it is totally fine and legal however don't lie to the fanbase and tell us the team loses money when you purposely structured it to always lose money. Personally I find it insulting to my intelligence and if you don't then well.....I guess you don't get it.

Another example, I'd bet the naming rights money for the rink went in to Sens Sports and Entertainment rather than the team, without the team nobody is shelling out that kind of coin for naming and no team. It's just an accounting game that some can't seem to see or perhaps refuse to see.

 

[Sensung]

This right here, he has more debt than the cost for the team, arena, surrounding land, the ticketing company and all the sensplexes that existed. He piles debt on the team while the others entities make massive profits, it's really not that difficult to understand what he is doing from an accounting perspective. This way he can claim poor and the team loses money while charging ridiculous rent, concessions, fees, etc where those profits are booked by the other entities, meanwhile the sens show a debt.

Anyone with accounting 101 knows what he is doing, the problem is that he is FOS and separates the team from the other entities when talking meanwhile using them as a debt bucket. If you want to do this it is totally fine and legal however don't lie to the fanbase and tell us the team loses money when you purposely structured it to always lose money. Personally I find it insulting to my intelligence and if you don't then well.....I guess you don't get it.

Another example, I'd bet the naming rights money for the rink went in to Sens Sports and Entertainment rather than the team, without the team nobody is shelling out that kind of coin for naming and no team. It's just an accounting game that some can't seem to see or perhaps refuse to see.

Yup.

And the usual suspects will continue to propagate the lie and quote the mouthpieces paid to lie on behalf of EM.

 

[JD1]

This right here, he has more debt than the cost for the team, arena, surrounding land, the ticketing company and all the sensplexes that existed. He piles debt on the team while the others entities make massive profits, it's really not that difficult to understand what he is doing from an accounting perspective. This way he can claim poor and the team loses money while charging ridiculous rent, concessions, fees, etc where those profits are booked by the other entities, meanwhile the sens show a debt.

Anyone with accounting 101 knows what he is doing, the problem is that he is FOS and separates the team from the other entities when talking meanwhile using them as a debt bucket. If you want to do this it is totally fine and legal however don't lie to the fanbase and tell us the team loses money when you purposely structured it to always lose money. Personally I find it insulting to my intelligence and if you don't then well.....I guess you don't get it.

Another example, I'd bet the naming rights money for the rink went in to Sens Sports and Entertainment rather than the team, without the team nobody is shelling out that kind of coin for naming and no team. It's just an accounting game that some can't seem to see or perhaps refuse to see.

I have a fair bit more knowledge of accounting than 101 and don't agree at all with your assessment.

it is indisputably true that NHL teams except for the elite few were bleeding cash. 2 strikes later and a massive TV deal from Rogers seems to have changed that. But this team, a small market team, with revenue in Cdn dollars was losing money. Not just the team...all of it...Winnipeg and Quebec losing teams didn't happen because of a lack of accounting tricks. Bryden losing the "team" didn't happen because of a lack of accounting tricks.

Before we go any further....do you agree that this was true across the NHL up to a few years ago? if we can't agree on this then there's no point in any further discussion

 

[harrisb]

I have a fair bit more knowledge of accounting than 101 and don't agree at all with your assessment.

it is indisputably true that NHL teams except for the elite few were bleeding cash. 2 strikes later and a massive TV deal from Rogers seems to have changed that. But this team, a small market team, with revenue in Cdn dollars was losing money. Not just the team...all of it...Winnipeg and Quebec losing teams didn't happen because of a lack of accounting tricks. Bryden losing the "team" didn't happen because of a lack of accounting tricks.

Before we go any further....do you agree that this was true across the NHL up to a few years ago? if we can't agree on this then there's no point in any further discussion

So the moving of Winnipeg and Quebec pre salary cap are relevant? Bryden didn't have the money for a team in the first place, you need to be a multi-billionaire with multiple sources of income. Melnyk when he acquired the team had that, he has since been divorced, fined, restricted from boards, lied to securities exchange, cooked the books of a public company and had multiple failed startups. Bryden had to borrow almost every dime and then Melnyk benefited by paying pennies on the dollar, proceeded by financially leveraging it to the hilt. What exactly is Melnyk's big revenue stream right now? How about his startups with no products but hemorrhaging money that he's decided to sue?

You lean back on "the team lost money" argument, neglecting that Melnyk acquired everything and structured it such that the team will ALWAYS lose money. As I said, smart idea and totally legal but he is being completely disingenuous when saying the team loses money while the rest of the ventures profit. When he's selling draft picks for cash and acquiring players for far less dollars paid vs cap then preaches about how much cap we spend, he being nothing but a snake oil salesman. I mean no disrespect to snake oil salesman worldwide and I would never want to be compared to this man.

 

[Micklebot]

So, I came across some historical Forbes data from the year Melnyk bought the Sens, just a snapshot of what they estimated was going on in the league, and seems tangentially relevant here, so I thought I'd post;

Team	Value	Debt/Value	Revenue	Operating Income
NYR	272	92%	113	-6.9
DAL	270	55%	108	5.6
TOR	263	24%	105	13.8
PHI	252	26%	101	3.5
DET	245	25%	89	-13.7
COL	229	23%	88	-3.9
BOS	223	54%	84	2.8
CHI	192	0%	74	1
LA	183	72%	78	1.6
MTL	170	47%	71	-5.4
MIN	170	71%	79	20.1
NYI	151	66%	56	-10.9
STL	147	66%	67	-29.4
NJ	145	46%	73	-9.4
CBJ	144	31%	66	3.6
SJ	137	33%	65	-8.6
TB	136	37%	65	-0.07
WAS	130	51%	62	-21
VAN	125	76%	66	0.7
PHX	120	84%	43	-21.1
OTT	117	20%	59	-2
PIT	114	35%	57	4.5
FLA	113	44%	57	-9.2
ANA	112	0%	59	-10.8
ATL	110	63%	57	-0.09
CAR	109	55%	57	-13
NSH	101	40%	46	-2.8
CGY	97	20%	51	-5.8
BUF	95	53%	50	-5.3
EDM	91	35%	48	-0.1

[TBODY] [/TBODY]

Of note;

- They estimated the debt for the Sens at the time Melnyk purchased to be well below average. Most team were borrowing substantially more than they do these days.
- Only 10 teams had a positive OI that year, compared to 9 I think being in the negative this year.
- It doesn't show in the table I made, but teams were spending and insane amount on salaries given the revenue streams. Many of the teams bleeding money were doing so because couldn't or wouldn't control their spending.

based on the debt/value number, they are estimating the Sens debt at around 23 mil, which would have been the 4th lowest in the NHL, a pretty enviable position to start in I guess...

 

[BonkTastic]

we'e in debt because for years we lost money

Almost all of the debt from the Bryden era (and earlier) was forgiven or restructuted on sweetheart deals for the team after Melnyk purchased the team. The organizational debt was well below league average the day Melnyl took over as owner.

The debt now is largely due to the fact that Melnyk used credit and borrowed money to purchase the team, and has borrowed money to pay for those loans, and every time he refinances those loans he is signing on for higher and increasingly more predatory lending rates.

It can be argued that the only reason the team ever "loses" money in any given year, outside of some creative accounting that moves profits around from the hockey side of the business to the arena side of the business (because the two are run as separate businesses from an accounting perspective) is because the interest on the loans are getting out of hand.

 

[JD1]

Almost all of the debt from the Bryden era (and earlier) was forgiven or restructuted on sweetheart deals for the team after Melnyk purchased the team. The organizational debt was well below league average the day Melnyl took over as owner.

The debt now is largely due to the fact that Melnyk used credit and borrowed money to purchase the team, and has borrowed money to pay for those loans, and every time he refinances those loans he is signing on for higher and increasingly more predatory lending rates.

It can be argued that the only reason the team ever "loses" money in any given year, outside of some creative accounting that moves profits around from the hockey side of the business to the arena side of the business (because the two are run as separate businesses from an accounting perspective) is because the interest on the loans are getting out of hand.

the team was essentially bought from bankruptcy....Melnyk negotiated with the creditors and picked the whole thing up for about 33 cents on the dollar of debt

imo the current debt state is largely due to Melnyk covering operating losses for the first 10 or so years that he owned the team....those losses needed to be covered...Melnyk ponies up to cover them and whatever he ponied up is recorded as a shareholder loan....every few years he increases the debt and pays back the loans....going back a few years the Citizen reported he had lost something like 93 million....he had to cover that, those bills had to be paid, and he covers it by injecting cash recorded as loan from shareholder...he refinances, pays himself back and the team is saddled with more debt...

i don't think it can be argued that they lose money because of debt ....well it can be, but not credibly IMO....since the Rogers deal and the Bell deals we signed, he's paying peanuts percentage wise on the debt, the TV revenues are guaranteed, there's a lien on them from the bankers, and the rates are low because payback is guaranteed on the revenue stream ....with its current long term TV revenue deals, any discussion about debt and financing is a discussion with bankers about how low they will go, not the other way around...the debt financing tour that everyone laughed about and it played out here like he couldn't get financing...no, that was a tour of lenders to find the lowest rates and it may be fractionally above the NHL credit line rates. This notion of loan shark rates is just patently false.

there are lots here that argue about Melnyk using the senators as a cash cow....not a lot of credibility in that.....what he is rather guilty of is having picked the whole up for a song, jacked the debt to cover the personal loans that covered the operating losses, and watched the value of the team triple over the course of his ownership. Arguably he's made 250 million on his investment. That's what billionaires and the ultra rich do....figure out how to make money on other people's money...but use it as a cash cow....no that 's quite unlikely ....i'd rather see him criticized for what he is actually guilty of than 90% of what people here accuse him of

 

[aragorn]

Sorry but this makes zero sense. Plenty of businesses and individuals have debt, it doesn't stop selling even a little bit. Melnyk will sell when the team is at it's peak in value, that will be once the Lebretton project is underway.

I'm still fairly confident that Karlsson and Duschene will re-sign, the issue will be surrounding them with enough talent to compete.

I'm still not sure what this management team is doing for next season or beyond. If they plan on making the playoffs next season than of course re-signing those players makes sense. But PD also said he wants to see the young guys play more & they seem to have a 3 yr plan. But what does that mean? A 3 yr plan to insert the younger players & eventually make the playoffs?

They aren't very clear as to what they want for next season & the foreseeable future & what does GB do? Is he trying to make the playoffs next season or developing the younger players to learn how to play in the league? I guess it's possible to do both if we are talking about only a couple of prospects at a time but Ottawa could use about half a dozen new young good players. I guess it will come down to goaltending again next season whether this team has any chance of returning to the playoffs or whether they will be rebuilding.

 

[Gil Gunderson]

I'm still not sure what this management team is doing for next season or beyond. If they plan on making the playoffs next season than of course re-signing those players makes sense. But PD also said he wants to see the young guys play more & they seem to have a 3 yr plan. But what does that mean? A 3 yr plan to insert the younger players & eventually make the playoffs?

They aren't very clear as to what they want for next season & the foreseeable future & what does GB do? Is he trying to make the playoffs next season or developing the younger players to learn how to play in the league? I guess it's possible to do both if we are talking about only a couple of prospects at a time but Ottawa could use about half a dozen new young good players. I guess it will come down to goaltending again next season whether this team has any chance of returning to the playoffs or whether they will be rebuilding.

Oh I'm well aware of what the plan is. Build a team with the bare minimum investment and pray we squeek into 8th and go on a Cinderella run. This 3 year plan is an excuse to spend the bare minimum just like it was in 2011. Any more criticism in the media and Melnyk will resort back to the "we'll spend when the time is right" BS.

How anyone buys anything Melnyk and Dorion are selling is baffling. The only thing Melnyk's budget can buy is the status quo.