Ottawa Senators announce completion of 135 million financing | MOD warning post #303

[Sensung]

So, Peter and Paul to pay Mary....does not work like that. The Sens as an orginization lose money because of the empty seats.

The Sens "lose" money because Eugene has set them up to do so.
Who gets to decide how much rent the Sens pay the CTC?

I swear these clowns think the fans are gullible fools.

 

[Nac Mac Feegle]

So, Peter and Paul to pay Mary....does not work like that. The Sens as an orginization lose money because of the empty seats.

Fact is, Melynk as owner of all of those entities makes a profit. Move the Sens out of the city, and the CTC and his other ventures in Ottawa will lose money (and he'll lose even more on the Sens by having to pay rent to a different arena owner and losing out on additional arena revenue).

 

[Stylizer1]

Melnyk is stalling. He refinanced the debt because he knew season tickets and walk up crowds were going to be weak this season so he needed the cash as a way to hold out until the Seattle money comes in, and then he will sell.

 

[Stylizer1]

So, Peter and Paul to pay Mary....does not work like that. The Sens as an orginization lose money because of the empty seats.

Melnyk hides profits by making the sens pay rent to him. He could charge 40 million a season if he wanted too.

 

[YouGotAStuGoing]

Caring and a buck 75 get you a double double. Like, big deal. Actions speak louder than words and if the team had the same support as the other NHL teams, a lot of this uncertainty about the captain and ending up at the cap floor wouldn't even be an issue. But keep caring.

Hey, you're the one who brought up caring:

It is good news for those who care about the Ottawa Senators

I was just responding to your point. It's not good news for everyone who cares about the team, only those who think Melnyk's ownership is not the problem. And that number is getting smaller every day. Actions speak louder than words: if we had the same ownership support as other teams, a lot of uncertainty about the captain and ending up at the cap floor wouldn't even be an issue, either. This particular team's not in trouble when the fans stop spending – only the owner is. But when the fans stop caring? That's when we've lost.

 

[Zorf]

Caring and a buck 75 get you a double double. Like, big deal. Actions speak louder than words and if the team had the same support as the other NHL teams, a lot of this uncertainty about the captain and ending up at the cap floor wouldn't even be an issue. But keep caring.

So explain the actions of cutting spending the season after the ECF run.

Instead of harping on one non-sellout, how about take that $27-30m in bonus revenue and keep the good times rolling?

But yes, you're right. Only we are to blame. Fans and the city went full bananas supporting the team, with the exception of one game that didn't sell out, only to get bent over the very next season.

 

[Zorf]

... It won't change dubious hockey personnel decisions, which are not his fault, but this news is very positive.

... The fact that he went Trudeau and pumped his chest out to tell everyone is a message to the city that he isn't going anywhere and he is going to invest in the team. Again, for those who can put aside their disdain and vitriol for the owner, it is a crucial bit of positive news.

LOL that you think he doesn't have his slimy little hands all over every decision that is made.

Double LOL that you believe their line about investing the loan money in the team.

"Those who do not learn history are doomed to repeat it."
- George Santayana

 

[Mingus Dew]

But it is not a new loan. It is a refinance of existing debt plus he borrowed some more for things he wants to do. Needs to do.

Do we know this for sure? I thought maybe the existing debt had matured (not that it really makes any practical difference I guess).

 

[Flamingo]

LOL that you think he doesn't have his slimy little hands all over every decision that is made.

Double LOL that you believe their line about investing the loan money in the team.

"Those who do not learn history are doomed to repeat it."
- George Santayana

I imagine that the loan with such favourable rates was secured with some sort of proposal on how the money would be used to run the business and secure/boost revenue. This would involve spending on hockey operations and player salary.

 

[Tuna99]

The value of the Ottawa Senators is low because the brand is broken in this market. The NHL brand is strong, the love of the Senators is strong, the ties to Alfie / EK and the legacy players is strong - the Ujean Mekncyk brand in Ottawa is probably the worst brand in the city - in fact I can almost guarantee he has a lower appeal then politicians do.

When Alfie left the Senators changed from God's team to Melnyck's team - and that was the start of the fans questinging their commitment to the team and belief in the culture of the franchise. With Alfie we always had the identity of a smart, hard working, punch above your weight NHL team - when he left we turned into a cheap, petty, dishonorable brand that didn't reflect any of the values or identity of the city or the team we were sold.

Look at the Season ticket base for the only proof you need - it'll be 6000 this year MAYBE - that's just straight up neglect of a fanbase for it to get that far.

Don;t listen to the pundits who blame the fans, they did the same thing to Calgary and Edmonton during their lean years, they said the Raptors would overtake the Leafs, they said the Boston and Chicago markets were dead - this really is about customer service, hockey is a religion in Ottawa - but even the church updates it's marketting polices and appeal, they don't just say 'we have god, show up or I'm leaving' the church competes for time and emotional investment with all the other competing elements in your life (TV, volunteering time, personal growth industirez)

 

[Sensung]

Melnyk is stalling. He refinanced the debt because he knew season tickets and walk up crowds were going to be weak this season so he needed the cash as a way to hold out until the Seattle money comes in, and then he will sell.

Guess it is up to fans to motivate Eugene to sell sooner by emptying the building...

 

[operasen]

Maybe we need some Laliberté billboards!

I really feel there is a disengagement from fans to support Melnyk, not the Sens per say, but the Melnyk feeling will trump supporting the team. There is a desire for a new ownership, which will imply a new direction. People are just tired of Melnyk's ways and know his flaws too well. He's not in it for "us"; he's in it for "himself", and that irks "us" because we pay the freight.

He needs to cash out as stated above. His time is done. And I think he has a plan to do that while at the same time to ride the timeline to up the cost, all the while stripping the team (Karlsson, Duchene, Stone?) of its greatest assets to ramp up his profits while he can. All the while, the fans (us) are left wanting.

 

[Pierre from Orleans]

I still find it funny that some people reference Alfredsson as a God

 

[TeamRenzo]

Timing makes sense, Cirque du Soleil is in town...

 

[NorthCoast]

So, Peter and Paul to pay Mary....does not work like that. The Sens as an orginization lose money because of the empty seats.

Says who?

- In 2013 they said they lost about 10 mil a year on top of debt.
- In 2014 the new TSN TV deal kicked in (30 mil per year), New naming rights kicked in, Rogers TV Deal just kicked in, etc.
- The player budget between 2013-2014 and 2014-2015 went up by a million or so.
- 2017 Melnyk: "We're doing okay, not great but okay"

So, even if we take them at their word that the team was losing 10 mil per year until 2013, and even if we ignore that it is well documented that all sports teams game the accounting to put as many loses on the team side versus the arena side to minimize salary caps, then it still doesn't add up that they are losing money today beyond debt payments.

The fact is that attendance revenues have been pretty steady. They shifted the strategy years back to reduce the number of cheap promotions and ticket giveaways that dramatically reduced the number of people going to the games...but was offset by an increase in avg. ticket price. Plus they steadily have increased concessions and parking so that the revenue per fan has increased.


Here is a question for you. Are the Redblacks more successful than the Renegades because the market changed or the ownership?


In other words, at what point does the responsibility of the team financial stability shift from the owner/management of the team to the customer? If you perform the math, the Ottawa fanbase is easily one of the most loyal and dedicated in the league on a per capita basis. The equation is simple:

Total Annual Attendance X Avg. Ticket Price
Population of Market

This gives you the avg. amount spent on tickets per capital for each team. If you do this you'll find that per capita, Ottawa fans spend more than most other fanbases. If you factor in the we have one of the smallest corporate bases, and that most of this is coming from actual fans, then it's even more glaring how much more dedicated the avg. fan in Ottawa is. I'm not saying that we are a cap team or can outspend other teams...but the market is plenty strong and dedicated to run a healthy NHL franchise.

BTW, Just for fun here is the list of teams that have not sold-out a playoff game so that we know who to kick out of the league if that is the measure of market viability:

Anaheim
Detroit
Florida
New Jersey
New York Islanders
Ottawa
Carolina
Colorado
San Jose
Arizona
Columbus
Nashville

 

[DrunkUncleDenis]

Me in a finance thread:

 

[SPF6ty9]

I still find it funny that some people reference Alfredsson as a God

Yup! Then again I never got the whole overboard love of celebrities, they're just people. Plus I bet god could have won at least a cup or 2.

 

[coladin]

Maybe $100 million or so is repaying some old debt that has come due. That leaves $35 million to help his cash flow. It is a "new loan". He also could owe another $200 million or so in addition to the $135.

Maybe, but no point in speculating what that breakdown actually is. I can only go on from what I have read , and the previous amount I think was 150M 5 years ago

 

[coladin]

I am not amongst those who think this is all on Melnyk but it is hard to defend Melnyk's behaviour this past year: threatens relocation and is seemingly not in love with Lebreton all of a sudden.

Consumer confidence is low. It's on him to raise it back to where it was, there's no way around that simple fact: if people stop caring then getting them back is much harder.

Yes, he has not helped his cause, but people have blown it way out of proportion and allowed the media to ratchet up the hysteria, to the team, fans and city's expense.

Consumer confidence is at its worst. He can sign Karlsson, Stone and Duchene and it won't matter. Ottawans are a very judgemental group and make everything personal. I just want to watch my team win and enjoy going to games. The new kids have really energized my passion for the team. People smiling in Sens jerseys!

 

[coladin]

Melnyk is stalling. He refinanced the debt because he knew season tickets and walk up crowds were going to be weak this season so he needed the cash as a way to hold out until the Seattle money comes in, and then he will sell.

People refinance the debt to save money and make money. People will also pay obscene amounts of penalties to break existing loans to refinance. By all accounts, this seemed to be after 5 years so it sounds like he may have gone to term. He no doubt borrowed extra because he knows he is going to lose a ton of money this year. He has his work cut out for him.

 

[coladin]

So explain the actions of cutting spending the season after the ECF run.

Instead of harping on one non-sellout, how about take that $27-30m in bonus revenue and keep the good times rolling?

But yes, you're right. Only we are to blame. Fans and the city went full bananas supporting the team, with the exception of one game that didn't sell out, only to get bent over the very next season.

Wasn't one game. I was at every game. They had 20,500 for Alfie's retirement 4 months earlier. Nowhere near what it should have been.

Anyways, league gets a lot of that revenue in the playoffs AFAIK. Not sure how you arrived at 27-30...but ok. He made money, and probably had to put it towards debts created in the past like most businesses do when they have extra revenues.

All the empty seats over the season add up, most likely to the amount of a star player. Yeah, crappy season last year, so let's all abandon ship.

 

[coladin]

LOL that you think he doesn't have his slimy little hands all over every decision that is made.

Double LOL that you believe their line about investing the loan money in the team.

"Those who do not learn history are doomed to repeat it."
- George Santayana

OK? Again, poisonous attitudes will never see anything other than what they want to see, The responses on the twitter story on the refinance proves it. Sad, uninformed and poisonous attitudes will cloud one's judgement. I see it every day on a work basis. When someone has a hate on for you, every action, every movement is under the microscope and it never ends well.

People need to take a step back and really look at this scenario more objectively.

 

[coladin]

Do we know this for sure? I thought maybe the existing debt had matured (not that it really makes any practical difference I guess).

What was reported is refi, consolidated plus he borrowed more. My bet is his payment stays the same but he has millions of extra cash to spend. My guess would be probably in the 10-15 range.

 

[Pierre from Orleans]

OK? Again, poisonous attitudes will never see anything other than what they want to see, The responses on the twitter story on the refinance proves it. Sad, uninformed and poisonous attitudes will cloud one's judgement. I see it every day on a work basis. When someone has a hate on for you, every action, every movement is under the microscope and it never ends well.

People need to take a step back and really look at this scenario more objectively.

Do you think people just blindly hate Melnyk for no reason? He was adored here for a long time. Things change, peoples perception change and for good reason.

 

[Sens of Anarchy]

Do you think people just blindly hate Melnyk for no reason? He was adored here for a long time. Things change, peoples perception change and for good reason.

Agreed