JD1
Registered User
- Sep 12, 2005
- 16,130
- 9,701
Except this is incorrect. Because Melnyk has taken money out of the team to pay for his other businesses. It happened when he bought the team. He didn't pay it all in cash, because he wanted to keep his liquid cash in Biovale stocks/other ventures because he thought they would appreciate in value faster than the carrying costs of the sens debt. That's why billionaires take on debt. Not because they can't pay it off, but because they believe that they can beat the interest rate investing the money somewhere else. They do it all the time.
But he lost that gamble. No problem for the first ten years when he was paying off the interest himself. But now he is broke, and the team revenue has to cover the interest, tanking the player budget.
Is some of the debt from operations that should be paid of by team revenues? Yes. How much, as you said, we don't know.
But it is clear the original debt was never paid down and it's pretty clear that Melnyk is not willing to pay it down out of his pocket since it's officially in the teams name now and everybody has forgotten where it came from. So now we have to rebuild while carrying 5-10 mil in interest on money Melnyk took out of the business to fund his other projects and YES, this is going to lead fans to wonder if we would have made the same moves, and be more competitive again sooner, if had we not had Melnyk's debt around our neck.
Like maybe we trade Condon for a player/coach type leader, maybe a local guy, who has already won the cup, that is signed for longer than a year and is really committed to the city/rebuild, and can help the youth find their way. It's not like adding 1-2 mid-level players are going to make the difference whether we are int he lottery next year. But maybe it makes the difference between this year being a character building experience for the rookies vs being completely miserable raking up loss after loss after loss.
Tell you what....I read pretty much everything there is to read about this organization and I've never seen a shred of evidence that supports the view that Melnyk uses money from the his ownership of the team to support other business ventures.
That type of statement is made on this board and repeated frequently but apart from reading it here I've never seen anything credible suggesting that to be true.