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09-27-2012, 09:24 AM
Join Date: Jul 2005
Originally Posted by
In about 8 years he doubled his money on the team? Thats pretty good, you have an investment advisor getting you getter returns? Do tell.
And that was just his return from the non HRR. You didnt include his money from his portion of the HRR. And you didnt mention what the arena was worth or generating, and if he didnt have the team, would all those companies be buying big sponsorships and suites just for the madonna concerts?
While Bryden lost his shirt, Melnyk prospered spectacularly. And not because of player salaries; salaries were actually higher for Melnyk. Maybe im learning a different lesson from that.
Melnyk likely would be paying himself a salary or making drawings each year. He could also lend the money to the team to cover its $4mil loss one year and get that money back as interest payments, from the team, which are expenses making it lose money. Plus he also wants operating profits each year on top of this. All these things add up to much more than Chris Phillips salary i'd figure.
These guys don't meet with the average investment advisor in the back of a bank. A 10% annual ROI isn't that much for someone with 120m in the game.
If you read the forbes link you'd see that the $200m valuation includes the arena as well - and therefore likely includes a good chunk of non-HRR. But why are we talking about that? What does a Madonna concert have to do with the Ottawa Senators other than sharing a building? You could argue that companies feel compelled to buy tickets, but that isn't making Melnyk rich.
Melnyk isn't likely taking a salary or a draw from the team. We know this team operates on razor sharp margins...why do we suddenly think Melnyk is making a mint on it?
Face it, even with a relatively successful franchise like Ottawa, the owner still isn't making much in relation to the amount invested. Add in a continuously rising cap and before you know it we'll be back to 2000 where teams spend 3-4 times others.
There is no reason the owners shouldn't be getting a deal comparable to what the other, more successful, franchises are getting...50% or more.
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