Melnyk's Financial Woes: Melnyk's Budget Edition

Ev wrote:

tim1_2 wrote:None of this is coming from Yost.  Melnyk said himself we can't afford to spend, we'll be a floor team, we'll be an underdog, etc etc.  Melnyk is the problem, and he needs to go.  

I'm excited about the upcoming season.  We have a great team.  Based on Melnyk's comments, we won't be able to keep this team together.

Nobody will be able to keep their whole team together under a salary cap.

They're not stupid, they will re-up their core players.

Melnyk has this female orgasm thing coming as well.

Oh, I see what you did, there.

wprager wrote:  Worst case, if Melnyk needs to raise capital for himself he can sell the team, or a part of it.  Debt load an all, it's still worth over $200M, and is generating $14.5M/year in earnings.  

How do you know what $14.5M/year is accurate? The Sens finances are private, no one outside the organization knows.  Forbes just estimates which may or may not be correct.

It seems he current level of spending is what the team can sustain on its own without going into the red.  This team doesn't generate the kind of money the big markets do.

It also seems Melnyk cannot afford to put any more of his own money into the team like other owners, which makes sense if all of his businesses are doing bad as Yost seems to have found out.

So the team has to generate more money to keep up with an increasing salary cap, primarily by raising ticket prices.

Now if the Ottawa market can't sustain higher ticket prices then we have a problem.

wprager wrote:
Look, are we cheering for the team or for the owner?  If Melnyk has to sell the team, is there a need to be concerned?  We had the sixth highest attendance in the league, we have a Norris winning D-man, a Jack Adams winner behind the bench, a perennial 30-goal scorer "coming in hot", the best goalie and a plethora of young prospects.  They are not going to move this franchise -- what would Habs and Leafs fans do to find tickets to see their team?

Who said anything about relocation?

What if he doesn't want to sell the team? If he can make money by keeping the team near the floor why would he sell?

If Melnyk cannot make money in a Canadian market then why not? Is it a bad owner mismanaging the team or is it a bad market where it's not possible to spend a lot on salaries without pouring your own money into the team on top of what the team and arena makes?

No one knows what's going on? I imagine there are ongoing debt payments on the loan used to buy the team. I figure someone who's been in trouble with the OSC before isn't getting the best rate either.

tim1_2 wrote:I find it funny how people are unwilling and unable to understand that Melnyk is holding this team back.  Melnyk said as much himself.  So hopefully he strikes gold sometime this season, and we can afford to actually not be 29th in the league in salary.

We'll be 28th when Cowen is signed. We will still be 30th when it comes to age. Look at the Oilers. They are 3rd in payroll and are also very young. How did that work out for them?

Would you rather Melnyk spent like Snider? Dolan? Vinnik? Katz? Pegula? Well, Pegula from a couple years ago.

Did you know we are only $6M behind the Leafs? And that could drop after Cowen is signed.

wprager wrote:
We'll be 28th when Cowen is signed.  We will still be 30th when it comes to age.  Look at the Oilers.  They are 3rd in payroll and are also very young.  How did that work out for them?
 

No one is saying that we should be spending to the cap.  It's that we can't spend more not that we choose not to.

Spending to the cap does not mean you have a winning team.

Spending to the floor(or near it) means you won't be going very far.  Look at cap floor teams like Nashville, Florida or the Islanders over the past few years to see how they did.

Hoags wrote:
How do you know what $14.5M/year is accurate? The Sens finances are private, no one outside the organization knows.  Forbes just estimates which may or may not be correct.

I said it earlier, I trust Forbes a hell of a lot more than Yost. And I certainly am not going to put much stock into what Melnyk says, since he contradicts himself.

Hoags wrote:It seems he current level of spending is what the team can sustain on its own without going into the red.  This team doesn't generate the kind of money the big markets do.

It also seems Melnyk cannot afford to put any more of his own money into the team like other owners, which makes sense if all of his businesses are doing bad as Yost seems to have found out.

Oh, you mean like the Little Caesars guy? Yeah, he staked his personal fortune giving Alfie the extra $1-2M. Meanwhile Detroit is declaring bankruptcy. Lots of owners come in and spend big, thinking that's what it takes to win -- look at Pegula. They quickly find out that buys you a cap ceiling's worth of mediocrity.

Hoags wrote:So the team has to generate more money to keep up with an increasing salary cap, primarily by raising ticket prices.

Now if the Ottawa market can't sustain higher ticket prices then we have a problem.

wprager wrote:
Look, are we cheering for the team or for the owner?  If Melnyk has to sell the team, is there a need to be concerned?  We had the sixth highest attendance in the league, we have a Norris winning D-man, a Jack Adams winner behind the bench, a perennial 30-goal scorer "coming in hot", the best goalie and a plethora of young prospects.  They are not going to move this franchise -- what would Habs and Leafs fans do to find tickets to see their team?

Who said anything about relocation?

What if he doesn't want to sell the team? If he can make money by keeping the team near the floor why would he sell?

If Melnyk cannot make money in a Canadian market then why not? Is it a bad owner mismanaging the team or is it a bad market where it's not possible to spend a lot on salaries without pouring your own money into the team on top of what the team and arena makes?

No one knows what's going on? I imagine there are ongoing debt payments on the loan used to buy the team.  I figure someone who's been in trouble with the OSC before isn't getting the best rate either.

Hoags wrote:

wprager wrote:
We'll be 28th when Cowen is signed.  We will still be 30th when it comes to age.  Look at the Oilers.  They are 3rd in payroll and are also very young.  How did that work out for them?
 

No one is saying that we should be spending to the cap.  It's that we can't spend more not that we choose not to.

Spending to the cap does not mean you have a winning team.

Spending to the floor(or near it) means you won't be going very far.  Look at cap floor teams like Nashville, Florida or the Islanders over the past few years to see how they did.

OK, so who should they have spent it on this off-season? We came in 7th with our #1 center, Norris-winning D-man, minute-munching 6'6" D-man, highest goal scorer and best goalie in the league for long stretches. We've lost Alfie but added MacArthur (similar offensive numbers) and then we went out and got a 4 time 30 goal scorer just coming into his prime.

So, who should we have gone after?

wprager wrote:
I said it earlier, I trust Forbes a hell of a lot more than Yost.  And I certainly am not going to put much stock into what Melnyk says, since he contradicts himself.  

That's fine.  Yost hasn't done anything except find public information that all of Melnyk's businesses seem to be doing bad, that info is correct, Forbes numbers are guesses.

wprager wrote:Oh, you mean like the Little Caesars guy?  Yeah, he staked his personal fortune giving Alfie the extra $1-2M.  Meanwhile Detroit is declaring bankruptcy.  Lots of owners come in and spend big, thinking that's what it takes to win -- look at Pegula.  They quickly find out that buys you a cap ceiling's worth of mediocrity.

Does Illitch own the city of Detroit or something? The Red Wings have nothing to do with the city going bankrupt.  They spend because they can, the Sens apparently can't.  And no one is saying Melnyk needs to spend like Pegula, sooner or later the Sens will have to spend to retain their best players or let them walk for nothing.

If you artificially limit the team budget far below the salary cap then you are making it even harder(if not impossible) to build a winner. The team can definitely be more cost effective than a lot of teams but a hard set budget is a disadvantage no matter how you spin it.

wprager wrote:
So, who should we have gone after?

The team couldn't afford both Ryan and Alfie. Yes maybe paying a 40-year Alfie $5.5M is a bad idea.

Can they afford both Spezza and Ryan? Will they try and force both to take $7M when they can get $8-9M from a team with less taxes than Canada?

Would they both want to re-sign long-term for an eternal cap floor underdog or will they be more impressed by teams who spend to the cap every year.

Traditionally players leave for the big money/big market teams. Players are impressed by the owner who will spend whatever it takes to win a Cup not by the owner on a budget. Maybe that's faulty thinking but historically that's how it goes.

Hoags wrote:

wprager wrote:
I said it earlier, I trust Forbes a hell of a lot more than Yost.  And I certainly am not going to put much stock into what Melnyk says, since he contradicts himself.  

That's fine.  Yost hasn't done anything except find public information that all of Melnyk's businesses seem to be doing bad, that info is correct, Forbes numbers are guesses.

wprager wrote:Oh, you mean like the Little Caesars guy?  Yeah, he staked his personal fortune giving Alfie the extra $1-2M.  Meanwhile Detroit is declaring bankruptcy.  Lots of owners come in and spend big, thinking that's what it takes to win -- look at Pegula.  They quickly find out that buys you a cap ceiling's worth of mediocrity.

Does Illitch own the city of Detroit or something? The Red Wings have nothing to do with the city going bankrupt.  They spend because they can, the Sens apparently can't.  And no one is saying Melnyk needs to spend like Pegula, sooner or later the Sens will have to spend to retain their best players or let them walk for nothing.

If you artificially limit the team budget far below the salary cap then you are making it even harder(if not impossible) to build a winner.

I think the point that is lost on some is the problem is not that we think they should spend to the cap. it's to publicly say you won't. ever. that it's not how you wish to run the franchise. which is pretty much what he is saying right now. which is the dumbest move he's done so far.

it's a message to the team that he won't play the same way other teams will. he won't be as competitive. it's terrible

Hoags wrote:

wprager wrote:
So, who should we have gone after?

The team couldn't afford both Ryan and Alfie.  Yes maybe paying a 40-year Alfie $5.5M is a bad idea.

Can they afford both Spezza and Ryan? Will they try and force both to take $7M when they can get $8-9M from a team with less taxes than Canada?

Would they both want to re-sign long-term for an eternal cap floor underdog or will they be more impressed by teams who spend to the cap every year.

Traditionally players leave for the big money/big market teams.  Players are impressed by the owner who will spend whatever it takes to win a Cup not by the owner on a budget.  Maybe that's faulty thinking but historically that's how it goes.

Paying 40 year old Alfie a bad idea? Then wtf is paying 5.5 mil for 41-42 year old Alfie?

If Alfie's demands were true and he wanted a 2 year 11-12 million dollar deal, lol. Beat it. Don't care how good he once was or how his legacy affected peoples feelings, that's money spent with complete stupidity.

NEELY wrote:
If Alfie's demands were true and he wanted a 2 year 11-12 million dollar deal, lol.  Beat it.  Don't care how good he once was or how his legacy affected peoples feelings, that's money spent with complete stupidity.

Well he's 40 now, he'll be 41 when his contract ends with Detroit.

Ottawa couldn't afford to give it to him but someone else could, so the demand was good for Alfie's bank account.

Spezza and Ryan will make a similar request. If we can't afford it, someone else will and that's the problem.

NEELY wrote:

Hoags wrote:

wprager wrote:
So, who should we have gone after?

The team couldn't afford both Ryan and Alfie.  Yes maybe paying a 40-year Alfie $5.5M is a bad idea.

Can they afford both Spezza and Ryan? Will they try and force both to take $7M when they can get $8-9M from a team with less taxes than Canada?

Would they both want to re-sign long-term for an eternal cap floor underdog or will they be more impressed by teams who spend to the cap every year.

Traditionally players leave for the big money/big market teams.  Players are impressed by the owner who will spend whatever it takes to win a Cup not by the owner on a budget.  Maybe that's faulty thinking but historically that's how it goes.

Paying 40 year old Alfie a bad idea?  Then wtf is paying 5.5 mil for 41-42 year old Alfie?

If Alfie's demands were true and he wanted a 2 year 11-12 million dollar deal, lol.  Beat it.  Don't care how good he once was or how his legacy affected peoples feelings, that's money spent with complete stupidity.

I agree completely. If that's true, he just went for the money - the end. We paid MacArthur 3.25 - I'm SURE Melnyk would have gone to 4.5 for Alfie and still added Ryan. We're getting to the territory of 'he did it just for the money', none of this nonsense about Detroit being the 'better chance at a Cup' BS.

Alfie went for the money - and we weren't willing to give him a big contract. Diddle it, that's basically all there is to it.

Still...when the chips are down, I'm not comfortable with Melnyk as owner anymore.

SpezDispenser wrote:

NEELY wrote:

Hoags wrote:

wprager wrote:
So, who should we have gone after?

The team couldn't afford both Ryan and Alfie.  Yes maybe paying a 40-year Alfie $5.5M is a bad idea.

Can they afford both Spezza and Ryan? Will they try and force both to take $7M when they can get $8-9M from a team with less taxes than Canada?

Would they both want to re-sign long-term for an eternal cap floor underdog or will they be more impressed by teams who spend to the cap every year.

Traditionally players leave for the big money/big market teams.  Players are impressed by the owner who will spend whatever it takes to win a Cup not by the owner on a budget.  Maybe that's faulty thinking but historically that's how it goes.

Paying 40 year old Alfie a bad idea?  Then wtf is paying 5.5 mil for 41-42 year old Alfie?

If Alfie's demands were true and he wanted a 2 year 11-12 million dollar deal, lol.  Beat it.  Don't care how good he once was or how his legacy affected peoples feelings, that's money spent with complete stupidity.

I agree completely.  If that's true, he just went for the money - the end.  We paid MacArthur 3.25 - I'm SURE Melnyk would have gone to 4.5 for Alfie and still added Ryan.  We're getting to the territory of 'he did it just for the money', none of this nonsense about Detroit being the 'better chance at a Cup' BS.

Alfie went for the money - and we weren't willing to give him a big contract.  Diddle it, that's basically all there is to it.

Still...when the chips are down, I'm not comfortable with Melnyk as owner anymore.  

Anyone who ever was is kind of out t lunch. He's been a loud mouth, money grubbing, two faced lair the entire time... people just refused to say it or even acknowledge it until it looks like he might be running out of money. He's always been a trash human.

NEELY wrote:

SpezDispenser wrote:

NEELY wrote:

Hoags wrote:

wprager wrote:
So, who should we have gone after?

The team couldn't afford both Ryan and Alfie.  Yes maybe paying a 40-year Alfie $5.5M is a bad idea.

Can they afford both Spezza and Ryan? Will they try and force both to take $7M when they can get $8-9M from a team with less taxes than Canada?

Would they both want to re-sign long-term for an eternal cap floor underdog or will they be more impressed by teams who spend to the cap every year.

Traditionally players leave for the big money/big market teams.  Players are impressed by the owner who will spend whatever it takes to win a Cup not by the owner on a budget.  Maybe that's faulty thinking but historically that's how it goes.

Paying 40 year old Alfie a bad idea?  Then wtf is paying 5.5 mil for 41-42 year old Alfie?

If Alfie's demands were true and he wanted a 2 year 11-12 million dollar deal, lol.  Beat it.  Don't care how good he once was or how his legacy affected peoples feelings, that's money spent with complete stupidity.

I agree completely.  If that's true, he just went for the money - the end.  We paid MacArthur 3.25 - I'm SURE Melnyk would have gone to 4.5 for Alfie and still added Ryan.  We're getting to the territory of 'he did it just for the money', none of this nonsense about Detroit being the 'better chance at a Cup' BS.

Alfie went for the money - and we weren't willing to give him a big contract.  Diddle it, that's basically all there is to it.

Still...when the chips are down, I'm not comfortable with Melnyk as owner anymore.  

Anyone who ever was is kind of out t lunch.  He's been a loud mouth, money grubbing, two faced lair the entire time... people just refused to say it or even acknowledge it until it looks like he might be running out of money.  He's always been a trash human.

We might have an ego problem with him not wanting to take on a partner for the team. The rest of his ventures I don't give a crap about, the Sens I do big time.

Either way, the guy has screwed more people than his wife... sorry ex.

Hoags wrote:

wprager wrote:
So, who should we have gone after?

The team couldn't afford both Ryan and Alfie.  Yes maybe paying a 40-year Alfie $5.5M is a bad idea.

Can they afford both Spezza and Ryan? Will they try and force both to take $7M when they can get $8-9M from a team with less taxes than Canada?

Would they both want to re-sign long-term for an eternal cap floor underdog or will they be more impressed by teams who spend to the cap every year.

Traditionally players leave for the big money/big market teams.  Players are impressed by the owner who will spend whatever it takes to win a Cup not by the owner on a budget.  Maybe that's faulty thinking but historically that's how it goes.

I doubt Spezza will be getting $8-9M. But if he is, then he's worth holding on to. Same with Ryan. We can always fill out the ranks with prospects and then add a couple veterans at the trade deadline.

Yes, taxes are higher in Canada, but there are other benefits to living here that, frankly, for a player making *that much* are likely worth it. When you have more money than you would ever need, it's not about making more money, just more than the next guy (i.e. you want to be the highest paid at your position, for example). And the only comparison that's valid is the cap hit, not take home pay.

Want to cancel out the tax difference? Negotiate your own contract.

NEELY wrote:Either way, the guy has screwed more people than his wife... sorry ex.

Marshy?

Who knows how much of this you can blame on Melnyk anyway.

Our ticket prices are below NHL average, we don't have much corporate support in this town and I don't believe they're at their season ticket target(13,000 ?).  And who knows where their costs are at nowadays.

There's definitely a limit somewhere of how much they can spend without going into the red.  If they haven't hit it yet, they will at some point if the cap keeps going up.

The team can either bring more money in or cut costs.  It's easier to cut costs so that's what it seems they're doing.

We've never been a big spending team, even with no cap we were going up against teams from Toronto with something like 2x our payroll.

But it's definitely not a good feeling as a fan if (lack of)money is seriously holding the team back.

wprager wrote:
I doubt Spezza will be getting $8-9M.  But if he is, then he's worth holding on to.  Same with Ryan.  We can always fill out the ranks with prospects and then add a couple veterans at the trade deadline.  

I think he will be getting $8-9M. If he's healthy, him and Ryan should light it up. Getzlaf and Perry contracts will be a rough starting point.

It really depends on how much they want to stay, might have to give a bit more to convince them to stay. Team needs to resign them one year from now.