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Is the Ottawa Senators franchise profitable?

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Old
06-23-2011, 10:44 AM
  #26
Holdurbreathe
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Originally Posted by benjiv1 View Post
The Jets new arena seats 17,000, and are expected to make money. While Melnyk would make more money off sellouts, we were ranked 11th overall in attendance this year. http://espn.go.com/nhl/attendance

If you look at it, the Sens operate on average at 99% of capacity, which is pretty damn good.
The Jets are going to be playing in the MTS Centre, it seats 15,015 for hockey.

The Sens do pretty well with average attendance, the issue the Senators have, the seats that don't get sold are predominantly in the high priced lower bowl.


Last edited by Holdurbreathe: 06-23-2011 at 10:51 AM.
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Old
06-24-2011, 01:11 AM
  #27
thinkwild
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I'd think the honest answer is of course that we don't know. We dont know because these are private companies that zealously guard their financials.

This is why we should look at all statements from owners about making or losing money as marketing statements, not financial updates. They arent going to tell the truth as if we were shareholders getting an update. They tell us these numbers to achieve marketing purposes, like justifying raising ticket prices etc.

For example Winnipeg, now that they are trying to get into the league will give marketing statements that they can compete fine in a 15,000 seat arena. But how long, until like Edmonton, fresh from bragging about their new billionaire owner rolling in dough, will it take them to be asking for tax concessions and public help as like Edm now, they cant be profitable in their 17,000 seat arena.

They are marketing statements.

The other point to note is whether the question is really relevant. We obsess a lot over the ongoing million or two they say they made in profit or loss or each year, but remember, they are capitalists, not operational profitists. Owners derive their wealth from owning sports teams in many ways, chiefly from capital gains when they sell the franchise, as well as the working capital the business provides them, the tax breaks, there are many ways the owner increases his wealth from owning a team. Often his wealth is maximized if he can structure the team portion of the enterprise to lose money. It isnt really important if it does. No one will care. It's a private business. There's no longera need for creative accounting.

The players get a share of Hockey Related Revenue, and they are sworn to confidentiality agreements not to reveal the true numbers.

Out of interest, if Melnyk gets millions from Scotiabank place for sponsorship rights, how much of that is official Hockey Related Revenue (HRR) that players get a 57% share of, and how much is just revenue related to hockey that the players dont get a share of?

Many teams are also in a lot of debt. Forbes suggests that Ottawa is in debt over $100 million. If Ottawa loses $4mil this year, does Melnyk write a check to cover it, or does the team take a loan to pay it increasing its debt. And who do they get the loan from? Imagine if Melnyk lent the team the $4mil at a high interest rate. WOuldnt that be clever, then he could get claim the team is losing money because it is in debt, while he collects those debts with his other company.

But yeah, we dont know if the "Team" is profitable as many have said, and even if we did, the question isnt the right one. The better question is how much wealth does the owner accumulate by owning a the team. That is a lot harder to determine.

If he loses 2 mil a yr for 5 years, and then sells the team for $50 mil more than he paid for it, first of all, why do teams allegedly losing money keep increasing in franchise value, and can we say the fact he lost money each year was important?

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06-24-2011, 06:50 AM
  #28
Droc
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Originally Posted by Northern Neighbour View Post
That's how it works. The Senators and SBP are treated as separate enterprises even though they are owned by the same person and are attached at the hip.
Its the same for all his companies.

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06-15-2013, 06:25 PM
  #29
Riddick19
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Listen the Sens are doing fine..... last season in 2011-12 the Sens made a 14.5M profit. Here's the link and it was Forbes who do the reports.

http://www.forbes.com/teams/ottawa-senators/

The Sens are basically keeping their costs down during their rebuild so that when they are ready to compete for the cup they have the money available to them to sign a player that will put them over the top. That is smart business, I don't expect the Sens to go on a huge spending spree in 2013-14 but I suspect you'll see them dip into some of that to bring in another offensive defenseman to replace Gonchar.

2 years from now you'll see the Sens are a perennial powerhouse, Murray just needs to make the right couple of trades and signings to make it happen. They have the coach, they have one of the game's top goaltenders, they have that elusive #1 centerman, a Norris Trophy defenseman, just need a few supporting cast members to help. Say a Nathan Horton & Mark Streit if he doesn't sign with Philly. Two moves similar to that and this team will contend for the cup.

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06-15-2013, 08:02 PM
  #30
Fenix Rises 2026
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Notable though that a spend to the cap Sens team is losing money. I'd be interested to know how much of that 14.5 is attributable to the 7-game Rangers series.

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06-15-2013, 09:51 PM
  #31
KarlSen
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Without the Sens as an anchor tenant, you don't have the concert facility, parking, concession and ticketing revenue that go with both hockey and non-hockey revenue. NHL, and most pro sports, have a long tradition of crying poor about losses by only reporting on hockey operations and not even including hockey concessions.

If the hockey operation is between and small loss and small profit each year, overall I expect they are doing fine on overall operations of the SBP enterprise. There is the capital appreciation as well, but Melnyk would have invested the funds somewhere else so that isn't unique to the Sens.

We will really never know, but I don't think it is being a drain on the owner's finances, and I wouldn't like it to be.

I bet that his horse stable takes a nice chunk of change to keep going every year. Melnyk likes to have a winner, and is willing to invest in it to.

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06-16-2013, 01:36 AM
  #32
MiscBrah
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You guys know this thread is 2 years old right?

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Old
06-16-2013, 07:47 AM
  #33
aragorn
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I remember reading that NHL owners make money when their teams are in the playoffs, so Melnyk must have made some money with four home playoff games this yr.

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06-16-2013, 08:02 AM
  #34
waynson spetzky
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Quote:
Originally Posted by aragorn View Post
I remember reading that NHL owners make money when their teams are in the playoffs, so Melnyk must have made some money with four home playoff games this yr.
That's correct. I've heard Melnyk banks roughly 2.5 million per (home) playoff game.

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