Speculation: Sens finances discussions

[Tnuoc Alucard]

Pretty much,instead of crying poor when you are stuffing money into your pockets from the arena...How about you dont take a paycheck ,until you get the team humming and able to stand on its own

The "team" is standing on it's own.

What you don't seem to understand, is that when EM "cries" about the Senators financial difficulties, he is only speaking of the Franchise alone, a separate business, controlled through Capital Sports Management Inc.

He's not talking about all of his other Businesses in Ottawa and Eastern Ontario combined, only the Senators.

Years ago, he made it clear that the Franchise is being operated alone, and the operational budget is funded through the revenues it generates.

To suggest that removing profits, from another business (CTC), to fund the operational budget of another business, the Senators, is akin to asking EM to fund the Franchise from his own pocket.


He also owns/controls a few other businesses, besides CSMI, in Ottawa and Eastern Ontario such as the Canadian Tire Centre a Multi-purpose Arena, The Belleville Senators, Berts Bar (one in Ottawa) why would you suggest that he siphon off profits, from any of these other separate business?

Sure, the profits from these, and any other businesses he owns/controls are his to do with as he pleases ........ it's his decision. But he's not under any legal obligations to take money earned from one business, to fund/float another business, and it may be cheaper tax wise, to borrow money to fund/float those other businesses, if they need it.

 

[Sensung]

The "team" is standing on it's own.

What you don't seem to understand, is that when EM "cries" about the Senators financial difficulties, he is only speaking of the Franchise alone, a separate business, controlled through Capital Sports Management Inc.

He's not talking about all of his other Businesses in Ottawa and Eastern Ontario combined, only the Senators.

Years ago, he made it clear that the Franchise is being operated alone, and the operational budget is funded through the revenues it generates.

To suggest that removing profits, from another business (CTC), to fund the operational budget of another business, the Senators, is akin to asking EM to fund the Franchise from his own pocket.


He also owns/controls a few other businesses, besides CSMI, in Ottawa and Eastern Ontario such as the Canadian Tire Centre a Multi-purpose Arena, The Belleville Senators, Berts Bar (one in Ottawa) why would you suggest that he siphon off profits, from any of these other separate business?

Sure, the profits from these, and any other businesses he owns/controls are his to do with as he pleases ........ it's his decision. But he's not under any legal obligations to take money earned from one business, to fund/float another business, and it may be cheaper tax wise, to borrow money to fund/float those other businesses, if they need it.

Melnyk can say whatever he wants and is free to set up and run his business however he wants.

Sens fans are not responsible to ensure that the decisions Melnyk makes see every business he owns make money on paper.

They are free to laugh at his claims that operating the Sens loses him money, when the bottom line for all his Sens related operations generate a profit based on every available source of information.

They are also free to point out that simply by manipulating the rent he charges the Sens to use his CTC he can create a wide range of “profit” or “loss” statements for the Sens.

In short, Sens fans don’t need to fall for Melnyk’s BS, nor your parroting of it in this forum. The onus is on Melnyk to set up and run a profitable Sens related business empire.

The manipulative lies and guilt tactics simply don’t work. Time for Eugene to get a new plan.

 

[Upgrayedd]

The team and building should make money together or apart how that is mismanaged in Ottawa is private info. Also it's unfortunate that the rent charged and salary taken remain unknown and can and are manipulated to mirror whatever narrative the owner has at the time.

 

[Tnuoc Alucard]

They are also free to point out that simply by manipulating the rent he charges the Sens to use his CTC he can create a wide range of “profit” or “loss” statements for the Sens.
.

Source?

 

[Calvin123]

A few thoughts, from someone who's not an accountant, but worked in a senior role at a big ten accounting firm for 10 years. (The accountants are welcome to correct me anywhere I'm incorrect).

As a business, all of the activities based in the CTC are closely tied to together. The CTC almost certainly would not be viable as a business without an anchor tenant (the Senators). On the other hand, it's quite possible that the Senator's are not viable on their own either, and need the costs of the CTC to be offset by other events, in order to make the entire package (CTC, Senators & other related business activities) a viable business.

Given the above, how this business is divided into legal entities, is really not relevant. The corporate and legal structure of a business can be based on a many factors; legal, accounting and tax related. There are lots of tax, accounting and other laws which govern the rules about how related companies interact and move money between them. It's unlikely the CTC companies are breaking any of the laws, but it is more than likely that they are taking best advantage opportunities to benefit the owner (that's what keeps the accountant's employed).

The corporate structure is also not relevant when it comes to HRR. HRR may be generated in any or all of the companies, but no one will care, as long as the structure is not used to somehow hide HRR from the NHL/players.

As a private company, most of the financial information for CTC companies is not available to us. We have no idea how they are doing, other than more or less educated guesses that get made (by Forbes, etc). The necessary information to determine would be available to the accountants / auditors tasked with that role. (And they are more than capable of finding it, no mater what legal entity it happens to be in). We have no idea how much money Melnyk is putting in or taking out of the business.

Given that Melnyk appears to want to keep the business, it's highly unlikely it is unprofitable (when looking at both operating profit and capital gains). However it's quite possible that there challenges around operating profit and cash flow. It's not uncommon for businesses to die or have to be sold because of cash flow issues, when they would ultimately be profitable.

I believe all above is factual, now for my opinion. It appears to me that Melnyk is in a cash flow / operating profit crunch. For a variety of reasons revenues are down / expenses are up, and he doesn't appear to be able to cover the difference from his wealth, or may simply be unwilling to do this. Out of the several options available to him to free up cash (selling all or part of the team, finding more sources of revenue...) he appears to have choose the option to fix the problem by reducing expenses (Senator's budget). In doing so, he has completely misjudged the Ottawa market. While reducing his expenses may in the short term increase operating profit (or reduce losses), he is also destroying the brand, and the long term viability of the business (made worse by is horrible comments and lack of media savy). Hopefully he sells before the brand damage is irreparable.

 

[Sensung]

Source?

A few questions for you Count to help you understand the situation.

1) When Melnyk offers to play in Lebreton “rent free” does he hope to help his bottom line for his Sens business?

2) When the Melnyk owned CTC negotiates with the Melnyk owned Sens does CTC Melnyk offer to have the Sens play “rent free” in order to make the Sens more profitable?

3) Who is monitoring how much rent is charged by the CTC to the Sens?

4) Would a different business model where the Sens played rent free at the CTC and made a profit justify spending more on hockey operations and player budget?

5) Or would Melnyk then cite the losses on CTC as a reason to run at the cap floor with a bare bones operation?

Please respond...I’d really like to know.

 

[Sensung]

A few thoughts, from someone who's not an accountant, but worked in a senior role at a big ten accounting firm for 10 years. (The accountants are welcome to correct me anywhere I'm incorrect).

As a business, all of the activities based in the CTC are closely tied to together. The CTC almost certainly would not be viable as a business without an anchor tenant (the Senators). On the other hand, it's quite possible that the Senator's are not viable on their own either, and need the costs of the CTC to be offset by other events, in order to make the entire package (CTC, Senators & other related business activities) a viable business.

Given the above, how this business is divided into legal entities, is really not relevant. The corporate and legal structure of a business can be based on a many factors; legal, accounting and tax related. There are lots of tax, accounting and other laws which govern the rules about how related companies interact and move money between them. It's unlikely the CTC companies are breaking any of the laws, but it is more than likely that they are taking best advantage opportunities to benefit the owner (that's what keeps the accountant's employed).

The corporate structure is also not relevant when it comes to HRR. HRR may be generated in any or all of the companies, but no one will care, as long as the structure is not used to somehow hide HRR from the NHL/players.

As a private company, most of the financial information for CTC companies is not available to us. We have no idea how they are doing, other than more or less educated guesses that get made (by Forbes, etc). The necessary information to determine would be available to the accountants / auditors tasked with that role. (And they are more than capable of finding it, no mater what legal entity it happens to be in). We have no idea how much money Melnyk is putting in or taking out of the business.

Given that Melnyk appears to want to keep the business, it's highly unlikely it is unprofitable (when looking at both operating profit and capital gains). However it's quite possible that there challenges around operating profit and cash flow. It's not uncommon for businesses to die or have to be sold because of cash flow issues, when they would ultimately be profitable.

I believe all above is factual, now for my opinion. It appears to me that Melnyk is in a cash flow / operating profit crunch. For a variety of reasons revenues are down / expenses are up, and he doesn't appear to be able to cover the difference from his wealth, or may simply be unwilling to do this. Out of the several options available to him to free up cash (selling all or part of the team, finding more sources of revenue...) he appears to have choose the option to fix the problem by reducing expenses (Senator's budget). In doing so, he has completely misjudged the Ottawa market. While reducing his expenses may in the short term increase operating profit (or reduce losses), he is also destroying the brand, and the long term viability of the business (made worse by is horrible comments and lack of media savy). Hopefully he sells before the brand damage is irreparable.

GREAT POST!!!

 

[Masked]

GREAT POST!!!

One of the best I've seen on here in a long time.

 

[Sensung]

One of the best I've seen on here in a long time.

Agreed.

 

[Xspyrit]

I don't understand why some people expect that a businessman takes money from a business to "fund" another business. From my experience, you operate businesses separately. That being said, I have no idea how the Sens/CTC operate in reality.

Looking at those numbers from the Arizona bankrupt, it's not hard to imagine how much money the team loses most years. Not hard to believe Melnyk when he says that the team needs to make the playoffs to break even or make profit.

Ticket prices are quite low in Ottawa compared to Montreal or Toronto, so not only you need the arena to be full, but corporate and suites sales might be a lot lower too. Heck, it's not easy. I guess back then, the CTC at its location could be viable but the way the "NHL economy" has evolved, it's becoming not "NHL Material" anymore. The team needs to move downtown ASAP.

 

[Sensung]

I don't understand why some people expect that a businessman takes money from a business to "fund" another business. From my experience, you operate businesses separately.

Looking at those numbers from the Arizona bankrupt, it's not hard to imagine how much money the team loses most years. Not hard to believe Melnyk when he says that the team needs to make the playoffs to break even or make profit.

Ticket prices are quite low in Ottawa compared to Montreal or Toronto, so not only you need the arena to be full, but corporate and suites sales might be a lot lower too. Heck, it's not easy. I guess back then, the CTC at its location could be viable but the way the "NHL economy" has evolved, it's becoming not "NHL Material" anymore.

Please read Calvin’s post.

Given the above, how this business is divided into legal entities, is really not relevant. The corporate and legal structure of a business can be based on a many factors; legal, accounting and tax related. There are lots of tax, accounting and other laws which govern the rules about how related companies interact and move money between them. It's unlikely the CTC companies are breaking any of the laws, but it is more than likely that they are taking best advantage opportunities to benefit the owner (that's what keeps the accountant's employed).

The Sens operations as a whole needs to be looked at for a better understanding. The “losses” for the Sens portion of the whole business are meaningless.

 

[Spartachat]

I don't understand why some people expect that a businessman takes money from a business to "fund" another business. From my experience, you operate businesses separately. That being said, I have no idea how the Sens/CTC operate in reality.

Looking at those numbers from the Arizona bankrupt, it's not hard to imagine how much money the team loses most years. Not hard to believe Melnyk when he says that the team needs to make the playoffs to break even or make profit.

Ticket prices are quite low in Ottawa compared to Montreal or Toronto, so not only you need the arena to be full, but corporate and suites sales might be a lot lower too. Heck, it's not easy. I guess back then, the CTC at its location could be viable but the way the "NHL economy" has evolved, it's becoming not "NHL Material" anymore. The team needs to move downtown ASAP.

Melnyk doesn’t have to do it. He can slash the operating budget as much as wants within NHL rules as he is the sole shareholder. However, he risks destroying the brand of his business and alienating his consumer base. Restaurants can put crap ingredients in their food, but they will risk losing customers.

 

[Xspyrit]

Please read Calvin’s post.

The Sens operations as a whole needs to be looked at for a better understanding. The “losses” for the Sens portion of the whole business are meaningless.

I did, it was a great post.

You quoted my post before I added this :

"That being said, I have no idea how the Sens/CTC operate in reality."

That's why I can't make any statements regarding that, because I have no idea how those businesses are organized, there is s many ways to do it. Calvin also mentioned it :

"As a private company, most of the financial information for CTC companies is not available to us. We have no idea how they are doing, other than more or less educated guesses that get made"

Reality is we don't know but I totally understand if the intention was to operate both revenue streams separately. And Calvin made another great point that makes a lot of sense, Melnyk is running into cash flow problems, the bank is empty and the debt is too high, paying too much interest already.

Melnyk doesn’t have to do it. He can slash the operating budget as much as wants within NHL rules as he is the sole shareholder. However, he risks destroying the brand of his business and alienating his consumer base. Restaurants can put crap ingredients in their food, but they will risk losing customers.

I'm not defending him or anything, just trying to portrait the reality as much as I can. I believe Melnyk has already damaged the brand with many people. Even for myself, who is really not the type to dramatize everything, but what happened in 2018 (or since that famous outdoor game) gradually went out of control. First, he should never speak unless he was repeating what a PR person told him to say.

 

[Calvin123]

I don't understand why some people expect that a businessman takes money from a business to "fund" another business. From my experience, you operate businesses separately. That being said, I have no idea how the Sens/CTC operate in reality.

I'm going to assume really don't understand this, and I'll try to provide a bit of an example.

If as an owner, I happen to own two unrelated businesses, a "pot shop" and a hardware store, it would be very reasonable to expect them both to exist as self contained businesses, without having to fund one from the other.

However if I own two highly related, and co-dependent businesses, for a example a "pot shop" and a junk food store, both co-located in the same building, they are really one business. One or both, may not be viable on their own, but together they more profitable than having only one of them. Why? The combination may allow for economies of scale (e.g. the same people manage and work in both, they share the real-estate costs, and floor cleaner is more cost effective as I now buy it in larger volume). However I might break them into separate legal businesses for legal, brand or tax reasons. In doing so, there are laws about how I allocated the shared costs to each of the businesses, but within the laws there is flexibility. This flexibility may allow me to reduce overall tax and /or generate a profit in only one of the businesses, and a loss in the other in the other (if for example I want to sell one of the businesses and therefore try to make it appear as profitable as possible).

Thus when two or more businesses are highly related, it makes sense to consider them as a whole, given that the profit or loss of any of the individual businesses can be manipulated (legally) for very good reasons.

 

[Sensung]

I'm going to assume really don't understand this, and I'll try to provide a bit of an example.

If as an owner, I happen to own two unrelated businesses, a "pot shop" and a hardware store, it would be very reasonable to expect them both to exist as self contained businesses, without having to fund one from the other.

However if I own two highly related, and co-dependent businesses, for a example a "pot shop" and a junk food store, both co-located in the same building, they are really one business. One or both, may not be viable on their own, but together they more profitable than having only one of them. Why? The combination may allow for economies of scale (e.g. the same people manage and work in both, they share the real-estate costs, and floor cleaner is more cost effective as I now buy it in larger volume). However I might break them into separate legal businesses for legal, brand or tax reasons. In doing so, there are laws about how I allocated the shared costs to each of the businesses, but within the laws there is flexibility. This flexibility may allow me to reduce overall tax and /or generate a profit in only one of the businesses, and a loss in the other in the other (if for example I want to sell one of the businesses and therefore try to make it appear as profitable as possible).

Thus when two or more businesses are highly related, it makes sense to consider them as a whole, given that the profit or loss of any of the individual businesses can be manipulated (legally) for very good reasons.

Very clear explanation.

 

[topshelf15]

A few thoughts, from someone who's not an accountant, but worked in a senior role at a big ten accounting firm for 10 years. (The accountants are welcome to correct me anywhere I'm incorrect).

As a business, all of the activities based in the CTC are closely tied to together. The CTC almost certainly would not be viable as a business without an anchor tenant (the Senators). On the other hand, it's quite possible that the Senator's are not viable on their own either, and need the costs of the CTC to be offset by other events, in order to make the entire package (CTC, Senators & other related business activities) a viable business.

Given the above, how this business is divided into legal entities, is really not relevant. The corporate and legal structure of a business can be based on a many factors; legal, accounting and tax related. There are lots of tax, accounting and other laws which govern the rules about how related companies interact and move money between them. It's unlikely the CTC companies are breaking any of the laws, but it is more than likely that they are taking best advantage opportunities to benefit the owner (that's what keeps the accountant's employed).

The corporate structure is also not relevant when it comes to HRR. HRR may be generated in any or all of the companies, but no one will care, as long as the structure is not used to somehow hide HRR from the NHL/players.

As a private company, most of the financial information for CTC companies is not available to us. We have no idea how they are doing, other than more or less educated guesses that get made (by Forbes, etc). The necessary information to determine would be available to the accountants / auditors tasked with that role. (And they are more than capable of finding it, no mater what legal entity it happens to be in). We have no idea how much money Melnyk is putting in or taking out of the business.

Given that Melnyk appears to want to keep the business, it's highly unlikely it is unprofitable (when looking at both operating profit and capital gains). However it's quite possible that there challenges around operating profit and cash flow. It's not uncommon for businesses to die or have to be sold because of cash flow issues, when they would ultimately be profitable.

I believe all above is factual, now for my opinion. It appears to me that Melnyk is in a cash flow / operating profit crunch. For a variety of reasons revenues are down / expenses are up, and he doesn't appear to be able to cover the difference from his wealth, or may simply be unwilling to do this. Out of the several options available to him to free up cash (selling all or part of the team, finding more sources of revenue...) he appears to have choose the option to fix the problem by reducing expenses (Senator's budget). In doing so, he has completely misjudged the Ottawa market. While reducing his expenses may in the short term increase operating profit (or reduce losses), he is also destroying the brand, and the long term viability of the business (made worse by is horrible comments and lack of media savy). Hopefully he sells before the brand damage is irreparable.

Bingo......Awesome post

 

[topshelf15]

I don't understand why some people expect that a businessman takes money from a business to "fund" another business. From my experience, you operate businesses separately. That being said, I have no idea how the Sens/CTC operate in reality.

Looking at those numbers from the Arizona bankrupt, it's not hard to imagine how much money the team loses most years. Not hard to believe Melnyk when he says that the team needs to make the playoffs to break even or make profit.

Ticket prices are quite low in Ottawa compared to Montreal or Toronto, so not only you need the arena to be full, but corporate and suites sales might be a lot lower too. Heck, it's not easy. I guess back then, the CTC at its location could be viable but the way the "NHL economy" has evolved, it's becoming not "NHL Material" anymore. The team needs to move downtown ASAP.

Why???So EM can call that arena a multi purpose arena too....And shaft the team out the resources it needs to grow and remain competitive ,and tell us the team is losing even more money

 

[NorthCoast]

I don't understand why some people expect that a businessman takes money from a business to "fund" another business. From my experience, you operate businesses separately. That being said, I have no idea how the Sens/CTC operate in reality.

Looking at those numbers from the Arizona bankrupt, it's not hard to imagine how much money the team loses most years. Not hard to believe Melnyk when he says that the team needs to make the playoffs to break even or make profit.

There are hundreds of ways businesses that operate together can smudge the books.

You can 1) sell a pair or $100 hockey tickets and throw in a free pair of concert tickets, or 2) sell a pair of $100 concert tickets and throw in a pair of sens tickets.

Either way the customer pays $200 and the concert promoter gets paid for the tickets. But in the accounting, option 1 records $200 in HRR (with 50% to players) and option 2 records $0 (with 0% going to players).

Now apply this type of thinking to every aspect of the operation that can straddle both sides of the business. Anytime revenue can be claimed against the arena instead of HRR they will do it to cut out the players. Similarly, everytime they can shift costs to the team side they will do it. Do you think the stadium and team split fairly on paying for cleaning, security, maintenance, heating, etc, etc...ie: that it is not lopsided on the team side to drive up team costs?? There is very little to stop them and they have a huge monetary incentive.

This isn't just hearsay. Forensic accountants that looked into this before the last CBA admitted that teams used these loopholes to shift revenue and costs to the preferred side of the ledger. It's not illegal as the players allowed these loopholes to exists...but it makes judging the profitability of the team on it's own very difficult.

 

[Xspyrit]

Well, sorry guys no more time to be part of the discussion, was interesting

I'm going to assume really don't understand this, and I'll try to provide a bit of an example.

If as an owner, I happen to own two unrelated businesses, a "pot shop" and a hardware store, it would be very reasonable to expect them both to exist as self contained businesses, without having to fund one from the other.

However if I own two highly related, and co-dependent businesses, for a example a "pot shop" and a junk food store, both co-located in the same building, they are really one business. One or both, may not be viable on their own, but together they more profitable than having only one of them. Why? The combination may allow for economies of scale (e.g. the same people manage and work in both, they share the real-estate costs, and floor cleaner is more cost effective as I now buy it in larger volume). However I might break them into separate legal businesses for legal, brand or tax reasons. In doing so, there are laws about how I allocated the shared costs to each of the businesses, but within the laws there is flexibility. This flexibility may allow me to reduce overall tax and /or generate a profit in only one of the businesses, and a loss in the other in the other (if for example I want to sell one of the businesses and therefore try to make it appear as profitable as possible).

Thus when two or more businesses are highly related, it makes sense to consider them as a whole, given that the profit or loss of any of the individual businesses can be manipulated (legally) for very good reasons.

lol funny that you took that as example, because we are actually in the process of getting into that business.

Sure, you have the maneuverability to do as you wish, inject personal cash in a business, "withdraw' it from another business, etc, but there is reasons to do it or not do it. I think in this case, Melnyk just decided to reduce the operating costs instead of "funding" the team with "other money"to keep the team afloat. Sure, he's damaging the brand at the same time but that's a different discussion.

You can consider related businesses as a whole all you want, but like you said yourself (highlighted), there is reasons to NOT do it financially talking. And as I have said (and well, you did too), I have absolutely no idea how Melnyk operates his businesses so it's IMPOSSIBLE for me to say one way or the other. So that's why I didn't get any further with this and said "I have no idea how the Sens/CTC operate in reality". Not sure why you made this post after I said that but ok.

Anyway, all this means he probably isn't ready to sell (unless he gets an offer he can't refuse), he is obviously waiting for Lebreton to be underway.

Why???So EM can call that arena a multi purpose arena too....And shaft the team out the resources it needs to grow and remain competitive ,and tell us the team is losing even more money

? To raise the ticket prices and increase the revenues? Increase the corporate sales? Gain in popularity? And everything else the Lebreton project implies.

Listen, like almost everybody, I can't wait for the day that Melnyk sells the team, but they really need to move downtown, now owner or not, don't forget the CTC would need major renovations.

And you know, for example, the Habs really don't need Evenko to be HIGHLY profitable. Maybe the Sens can aspire to be like that someday, obviously never as highly profitable but profitable on their own.

 

[topshelf15]

Well, sorry guys no more time to be part of the discussion, was interesting



lol funny that you took that as example, because we are actually in the process of getting into that business.

Sure, you have the maneuverability to do as you wish, inject personal cash in a business, "withdraw' it from another business, etc, but there is reasons to do it or not do it. I think in this case, Melnyk just decided to reduce the operating costs instead of "funding" the team with "other money"to keep the team afloat. Sure, he's damaging the brand at the same time but that's a different discussion.

You can consider related businesses as a whole all you want, but like you said yourself (highlighted), there is reasons to NOT do it financially talking. And as I have said (and well, you did too), I have absolutely no idea how Melnyk operates his businesses so it's IMPOSSIBLE for me to say one way or the other. So that's why I didn't get any further with this and said "I have no idea how the Sens/CTC operate in reality". Not sure why you made this post after I said that but ok.

Anyway, all this means he probably isn't ready to sell (unless he gets an offer he can't refuse), he is obviously waiting for Lebreton to be underway.



? To raise the ticket prices and increase the revenues? Increase the corporate sales? Gain in popularity? And everything else the Lebreton project implies.

Listen, like almost everybody, I can't wait for the day that Melnyk sells the team, but they really need to move downtown, now owner or not, don't forget the CTC would need major renovations.

And you know, for example, the Habs really don't need Evenko to be HIGHLY profitable. Maybe the Sens can aspire to be like that someday, obviously never as highly profitable but profitable on their own.

They are profitable on their own,thats the point you are missing...The arena was built for them ,it makes money ...Yet the team must pay rent to play there,and never gets to use the profit it generates

 

[topshelf15]

The very fact EM is willing to sell the very meat of which billionaires buy professional sports teams for..Just to gain a rent free arena for 30 years should scare everybody here...He doesnt have the money to make any real profit ,so he will shortchange the team to keep his cash flow going and little else

 

[Tnuoc Alucard]

A few questions for you Count to help you understand the situation.

1) When Melnyk offers to play in Lebreton “rent free” does he hope to help his bottom line for his Sens business?

2) When the Melnyk owned CTC negotiates with the Melnyk owned Sens does CTC Melnyk offer to have the Sens play “rent free” in order to make the Sens more profitable?

3) Who is monitoring how much rent is charged by the CTC to the Sens?

4) Would a different business model where the Sens played rent free at the CTC and made a profit justify spending more on hockey operations and player budget?

5) Or would Melnyk then cite the losses on CTC as a reason to run at the cap floor with a bare bones operation?

Please respond...I’d really like to know.

So no Source then, eh?

 

[Sensung]

So no Source then, eh?

Truly shocking that you would avoid the questions and try to deflect with your "source" routine.

You are nothing if not consistent.

 

[Micklebot]

Source?

Basic math?

Lets see if it checks out:

Hypothesis: by manipulating the rent he charges the Sens to use his CTC he can create a wide range of “profit” or “loss” statements for the Sens.

Experiment design: (Revenue) - (non-rent expenses) - (rent) = Operating Profit. Lets see what happens when we maintain revenue and non-rent expenses as constants, and change rent...

First, lets set the constants:
Revenue = 125 mil
Non-rent expenses = 100 mil

Now, lets try set the variables for 3 different cases:
Case 1: Rent =30 mil
Case 2: Rent = 15 mil
Case 3: Rent = 0

And run the experiment:
Case 1: Revenue (125 mil) - Non-rent expenses (100 mil) - Rent (30 mil) = -5 mil Operating Profit
Case 2: Revenue (125 mil) - Non-rent expenses (100 mil) - Rent (15 mil) = 10 mil Operating Profit
Case 3: Revenue (125 mil) - Non-rent expenses (100 mil) - Rent (0) = 25 mil Operating Profit

Analysis of results?
There's a 30 mil delta between the 3 case studies based on what he sets rent at.

Huh, look at that, it checks out. Changing how much one business charges another can affect the operating profit of the latter.

Does Melnyk do this? Who knows. Are there incentives for him to do this? Probably. Does the fact that he is in the position to do so make his statements about losing money carry less weight? Absolutely.

 

[Sensung]

Basic math?

Lets see if it checks out:

Hypothesis: by manipulating the rent he charges the Sens to use his CTC he can create a wide range of “profit” or “loss” statements for the Sens.

Experiment design: (Revenue) - (non-rent expenses) - (rent) = Operating Profit. Lets see what happens when we maintain revenue and non-rent expenses as constants, and change rent...

First, lets set the constants:
Revenue = 125 mil
Non-rent expenses = 100 mil

Now, lets try set the variables for 3 different cases:
Case 1: Rent =30 mil
Case 2: Rent = 15 mil
Case 3: Rent = 0

And run the experiment:
Case 1: Revenue (125 mil) - Non-rent expenses (100 mil) - Rent (30 mil) = -5 mil Operating Profit
Case 2: Revenue (125 mil) - Non-rent expenses (100 mil) - Rent (15 mil) = 10 mil Operating Profit
Case 3: Revenue (125 mil) - Non-rent expenses (100 mil) - Rent (0) = 25 mil Operating Profit

Analysis of results?
There's a 30 mil delta between the 3 case studies based on what he sets rent at.

Huh, look at that, it checks out. Changing how much one business charges another can affect the operating profit of the latter.

Does Melnyk do this? Who knows. Are there incentives for him to do this? Probably. Does the fact that he is in the position to do so make his statements about losing money carry less weight? Absolutely.

Thanks for saving me the keystrokes.

Well laid out. Too bad it will be ignored.