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Melnyk Interview (Regarding Alfredsson and teams finances)

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Old
08-12-2013, 08:43 PM
  #101
My Sweet Shadow
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Quote:
Originally Posted by Rals View Post
Revenue is all money earned, top line, total.

Profits are Revenue-expenses.

You can spend $100023409823042380 developing the worlds most expensive widget, is no one buys it you have no revenue. The relationship is not a direct one.
What you say is true, but I don't really get how it relates to that guy's post...

He said a successful business is one that has revenue > cost (i.e. making a profit). Hence, if you sell more than $100023409823042380-worth of that widget than you will technically have been successful. How much so depends on how much more revenue you made.

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08-12-2013, 08:54 PM
  #102
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Quote:
Originally Posted by My Sweet Shadow View Post
What you say is true, but I don't really get how it relates to that guy's post...

He said a successful business is one that has revenue > cost (i.e. making a profit). Hence, if you sell more than $100023409823042380-worth of that widget than you will technically have been successful. How much so depends on how much more revenue you made.
the conversation wasn't about the formula for a successful business, it was about the relationship between cost of players salaries and ticket prices.


read:
http://www.uwp.edu/departments/econo.../lesson03.html

and you will understand.

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08-12-2013, 09:02 PM
  #103
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The reason I started to post in this thread was as a warning. What Eugene is doing is entering the beginning stages of a negotiation with the public.

His goal is to raise ticket prices, He justifies this by promising a better on-ice product. This song is used by every sports owner in the history of sports and/or capitalism. You need to understand why its a fallacy.

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08-12-2013, 09:03 PM
  #104
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Reading a bit of it, it seems to be about increasing ticket prices to pay increasing salaries.

But in the discusison here, I imagine it's more about and assumed that increasing salaries leads to a better product, which raises the demand, hence leading to higher ticket prices.

We know Melnyk plays his game, from needing to make the 2nd round each year to ticket prices, to needing casinos, etc.

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08-12-2013, 09:06 PM
  #105
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Quote:
Originally Posted by Rals View Post
the conversation wasn't about the formula for a successful business, it was about the relationship between cost of players salaries and ticket prices.


read:
http://www.uwp.edu/departments/econo.../lesson03.html

and you will understand.
Thanks Professor.

I just saw the post you quoted, so I guess I missed the rest of the conversation.

And yes, I understand how supply and demand works.

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08-12-2013, 09:10 PM
  #106
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Quote:
Originally Posted by Rals View Post
The reason I started to post in this thread was as a warning. What Eugene is doing is entering the beginning stages of a negotiation with the public.

His goal is to raise ticket prices, He justifies this by promising a better on-ice product. This song is used by every sports owner in the history of sports and/or capitalism. You need to understand why its a fallacy.
Maybe they plan to increase ticket prices because demand has increased?

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08-12-2013, 09:13 PM
  #107
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Yost has beat this dead horse to peices. Melnyk is pocketing money to stay liquid is my guess and thats what I'll be leaning towards until the end of next year when spezz and ryan are UFA.

I can tell you this, if we dont resign those two players I will seriously have to rethink how I approach this team. Lowered fan expectations = lower attendance and this is a lose-lose scenario.

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Old
08-12-2013, 09:14 PM
  #108
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Quote:
Originally Posted by Iggy77 View Post
Maybe they plan to increase ticket prices because demand has increased?
Possibly, but then implying its for better players is disingenuous.

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Old
08-12-2013, 09:25 PM
  #109
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I think people need to realize that Melnyk will never really claim to make any money... but I'm perfectly fine for us to spend efficiently like we have done for most of the franchise's existence (thinking back to the Bryden days).

It doesn't make sense to spend a lot on a team unless it is a winner. If you think about it, having a bunch of bad contracts or overpaying for free agents doesn't make any sense.

Draft and develop our own team (with trades like Ryan) and add some role players or support players as free agents only!

Remember - Melnyk claiming to make money while spending well below the cap will cause pressure from the fans and media to spend more on the team.

Melnyk claiming to be making money while raising ticket prices is also a bad idea.

Best way to "admit" it is to say they need to go 2 or 3 rounds to make a "bit". Fans will be distracted with a successful on-ice season that they wont care at that point...

Anyway, our Oakland A ways are fine by me! It'll be more satisfying when we end up building up our team to a champion anyway, like its done most of the time!

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08-12-2013, 09:28 PM
  #110
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Originally Posted by porknbeans View Post
I think people need to realize that Melnyk will never really claim to make any money... but I'm perfectly fine for us to spend efficiently like we have done for most of the franchise's existence (thinking back to the Bryden days).
Quote:
As recently as September 2011, a decidedly more buoyant Melnyk went on the Prime Time Sports radio show in Toronto to say, “We don’t have to make the playoffs anymore to make money.” This was after the payroll savings from Fisher, Kelly, Kovalev, etc.
http://www.ottawacitizen.com/sports/...490/story.html

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08-12-2013, 11:26 PM
  #111
John Holmes*
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Eugene is priming us for a ticket increase, among other things.

You can't trust these guys when they cry poor.

Bryden was broke...for real. Melnyk may have taken a hit to his personal wealth, but he isn't Bryden broke. Not even close.

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08-12-2013, 11:43 PM
  #112
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Quote:
Originally Posted by John Holmes View Post
Eugene is priming us for a ticket increase, among other things.

You can't trust these guys when they cry poor.

Bryden was broke...for real. Melnyk may have taken a hit to his personal wealth, but he isn't Bryden broke. Not even close.
^ probably just a guy who wants to start seeing more of a return or less of a loss on investment.

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08-13-2013, 01:00 AM
  #113
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Quote:
Originally Posted by Rals View Post
The reason I started to post in this thread was as a warning. What Eugene is doing is entering the beginning stages of a negotiation with the public.

His goal is to raise ticket prices, He justifies this by promising a better on-ice product. This song is used by every sports owner in the history of sports and/or capitalism. You need to understand why its a fallacy.
What are the alternatives to raising ticket prices, then? The cost of owning a competitive team keeps going up.

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08-13-2013, 01:49 AM
  #114
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What are the alternatives to raising ticket prices, then? The cost of owning a competitive team keeps going up.
I believe this idea has been talked about before but now that i think about it i wouldnt be totally opposed to joining a different league like say the KHL. We'd instantly become the best team and i imagine we could keep salaries more even to their league then the NHL. Filitov is already and he can help some of players ajust to KHL ice and if you think about it our team colors might attract all kinds of new russian fans who have felt unwanted with the new Capitalist system. We'd totally tap into the potential of the russian youth hockey system like no team ever before. Seriously we should makes petition. EVERYONE TWEET EM.

Competitive team in KHL=cheaper
Senators in KHL=Champions
Think about it people.

Yup thats about it

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08-13-2013, 07:09 AM
  #115
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Melnyk is stockpiling profits for when we truly can be a competitive team. Making the playoffs and making a profit is the way to do that.

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08-13-2013, 07:45 AM
  #116
Karl Eriksson
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Quote:
Originally Posted by Vesa Awesaka View Post
I believe this idea has been talked about before but now that i think about it i wouldnt be totally opposed to joining a different league like say the KHL. We'd instantly become the best team and i imagine we could keep salaries more even to their league then the NHL. Filitov is already and he can help some of players ajust to KHL ice and if you think about it our team colors might attract all kinds of new russian fans who have felt unwanted with the new Capitalist system. We'd totally tap into the potential of the russian youth hockey system like no team ever before. Seriously we should makes petition. EVERYONE TWEET EM.

Competitive team in KHL=cheaper
Senators in KHL=Champions
Think about it people.

Yup thats about it
Whatever booze they have in Brazil, i want some.

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Old
08-13-2013, 07:55 AM
  #117
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Originally Posted by Senscore View Post
Can't wait until the "Save Our Sens" rallies start up again.
In Apathetic Ottawa? Don't count on it.

We'd sooner lose every pro sports team we ever had than diverge from our carefully crafted 'public service job to home' routine.

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08-13-2013, 08:01 AM
  #118
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The NHL does have some irregularities when compared to "regular" businesses, but at the end of the day, each team has a ledger, and the goal is to be in the black by the time the revenue sharing equalizations are paid out.

If you can charge more per ticket, you are increasing your revenues, and you can afford more in player salary. Period. They are connected.

There are lots of hiccups in how a team generates revenue, and what the costs are for each club (which can vary wildly), but "more revenue = more capital to invest in your business" is a very, very basic concept that is not lost on the NHL.
First (in bold), key word "IF". The local market will define ticket prices, not the owner unilaterally.

Your last paragraph once again ignores the reality of the NHL. An NHL franchise's hockey operations cost isn't dictated by what the local market revenue can sustain, but by the larger market revenues and their growth rates.

Let me assure you the revenue sharing equation doesn't magically make all non-profitable franchises into breakeven franchises, nor does it make all local markets equal in opportunity for revenue growth.

Simply Melnyk can't hope to compete in the revenue game with Toronto, New York, Chicago, Vancouver, Montreal, etc, yet the aggregate market growth forces his hockey operations cost to rise at a faster rate than his revenue streams allow.

So I agree, as you suggest, the goal is to be in the "black" when all the revenue and costs are accounted for on the balance sheet. However the issue for any NHL owner is growing local revenue at or above the NHL average and if the market doesn't support that rate of growth then the owner must manage costs.

Therefore owner's like Melnyk that have limited alternative revenue streams are forced into internal budgets which simply mean spending closer to the cap floor each year the local revenue growth is exceeded by the NHL revenue growth.

FYI more revenue doesn't in any way mean more capital to invest in the business, simply because revenue does not equal profit.

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08-13-2013, 08:30 AM
  #119
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Quote:
Originally Posted by John Holmes View Post
Eugene is priming us for a ticket increase, among other things.

You can't trust these guys when they cry poor.

Bryden was broke...for real. Melnyk may have taken a hit to his personal wealth, but he isn't Bryden broke. Not even close.
I'm not sure at he is priming the fans for ticket price increases as much as he is sending a message to local and potentially provincial politicians.

How I read what he has been saying, if he can get no support from politicians for the casino project to leverage his current investments to increase his revenue, then he may be forced to look elsewhere.

I can't believe Melnyk has any interest in selling off his players as contracts expire and salary demands rise due to an inability to grow revenues and leverage existing investment at the levels needed to support an NHL franchise. To do so only diminishes the value of his assets.

Regarding ticketing prices. I'm pretty sure Melnyk knows within a dollar or two what the Ottawa market will support in terms of pricing, if he believed the arena would be sold out at increased prices, that would have occurred already.

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08-13-2013, 09:21 AM
  #120
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Making money while spending below the cap = not okay

Breaking even while spending below the cap = not okay

Losing money = everyone is happy

Talking about losing money = not okay

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08-13-2013, 09:38 AM
  #121
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Quote:
Originally Posted by Holdurbreathe View Post
I can't believe Melnyk has any interest in selling off his players as contracts expire and salary demands rise due to an inability to grow revenues and leverage existing investment at the levels needed to support an NHL franchise. To do so only diminishes the value of his assets.

Regarding ticketing prices. I'm pretty sure Melnyk knows within a dollar or two what the Ottawa market will support in terms of pricing, if he believed the arena would be sold out at increased prices, that would have occurred already.
1) I don't think he wants to sell off players, no team does. The fear is he may not have a choice. If you can't afford a player, then you can't afford a player.

2) I am sure Leeder & co. know what to set the prices at. If the team does really well, demand will go up and they can probably bump the prices up a bit as well due to increased demand. Leeder has said something along those lines in the past.

I don't think Melnyk is lying about needing additional revenue streams though. This team will hit a spending limit if the cap keeps going up if they haven't already

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08-13-2013, 09:54 AM
  #122
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I dont beleive a word that comes out of that guys mouth. He constantly contradicts other people and unless I am going to beleive that most people employed/used to be employed by the SENS are liars and he is the only one telling it like it is, its pretty clear he is the liar.

In Yost I trust when it comes to the teams finances.

It's pretty clear he is taking money out and spinning it that we dont make money. 2 rounds of playoffs and we dont raise our budget? give me a break.

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08-13-2013, 10:03 AM
  #123
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Originally Posted by EdTheSabresFan View Post
In Apathetic Ottawa? Don't count on it.

We'd sooner lose every pro sports team we ever had than diverge from our carefully crafted 'public service job to home' routine.
You say that like it hasn't happened before.

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08-13-2013, 10:06 AM
  #124
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Originally Posted by EdTheSabresFan View Post
We'd sooner lose every pro sports team we ever had than diverge from our carefully crafted 'public service job to home' routine.
If everyone lived in Kanata, I guess it wouldn't be an issue.

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08-13-2013, 10:19 AM
  #125
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Originally Posted by EdTheSabresFan View Post
In Apathetic Ottawa? Don't count on it.

We'd sooner lose every pro sports team we ever had than diverge from our carefully crafted 'public service job to home' routine.
$cumb@g Sports fan: Complains about local pro sports team support. Supports rival franchises.

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