Melnyk and co made their case for a rinkside casino to city council this afternoon, an unsuccessful effort as the vote went to recommend the site at Rideau Carleton Raceway instead.
During the proceedings the Senators owner seemed determined to communicate he was very hard done by as NHL owner in Ottawa (I disagree), check out Alison Sandor's (@CFRA_Alison) timeline if you need to get caught up.
Since then AJ Jakubec (@AJonSports) has heard the audio and a short time ago tweeted out this:
Melnyk was asked if the the hockey team makes a profit. "Substantial losses." #Sens— AJ Jakubec (@AJonSports) July 9, 2013
Which is real interesting as Eugene was singing a very different tune less than two years ago when in a September 15, 2011 appearance on PTS he said this (start audio at 7:50):
Q: If you're a non-playoff team in Ottawa, can you you make money? Cause somebody's gotta be a non-playoff team in in this league, somebody's not gonna make the playoffs.
Melnyk: We don't have to make the playoffs anymore to make money. We don't have to. I'm telling you now. All those big fat contracts that we had before that weren't getting us anywhere, you know. Our ticket sales are ahead of last year...ahead!
So besides the fact the Senators have been a very successful team the past two seasons with 7 playoff home gates, what's changed?
Other than it being in his interest to cry poor.
I'll admit my bias up front - I am not a fan of casinos. I think they are a complete mirage in terms of economic development, adding very little to a community except for a host of social problems. About 90% of casino patrons earn 50k or less, which rather bursts the bubble on this notion of James Bond like characters coming to gamble away big money. Another hard fact is that all four of OLG's large casinos are losing money right now, so why it is that people think an Ottawa casino is going to be a big money maker is a mystery.
My take is that this is just the latest episode of a Senators owner trying to develop that land around the arena into more than what it is currently. Eugene tried to get the new stadium located out there, and failed. (Had he been smart enough to include CFL football in his proposal, he might have won that one.) Before then, of course, you had the original Bruce Firestone vision for the property, complete with a hotel, shopping, etc.
What happened yesterday is very typical of what happens when proud, fiercely independent business people come up against the political process. Self made men like Eugene Melnyk are used to getting their own way. (This is why he will never have an equity partner with the Senators - he doesn't want to have to answer to a partner, and any partner knows that it would be Eugene calling the shots.) The political process is about give and take, compromise, and reading the prevailing winds, all skills that Eugene utterly lacks. Eugene needs to hire some people with political acumen and then actually listen to them, but I'm not holding my breath waiting for that to happen. He believes that he is his own best advisor.
Finally, pay no attention to how much money he claims the team is making, or losing. No one in business ever publicly tells the truth about that, so this hardly makes Eugene unique. You will know he is in financial trouble the day the "for sale" sign goes up on the team and building. Until then, you can safely assume that he is making money and having fun, even if he is frustrated at his inability to create greater value in his arena investment.
I generally respect your blog, but I don't see any point in drumming up bad publicity for the team. I know you're not a mouth-piece for the team, but I'm getting tired of having to read about attempts by Sens media to throw the owner under the bus...
@punk_fiction Fair comment. No one wants to read or hear about the financial difficulties of your favorite hockey team/owner, but everything that we've written on the subject has had substance to it. It's not like our posts are ad hominem attacks. Scott pointing out that Melny's current statements conflict with what he has said in the past is a worthwhile subject.
@punk_fiction Sorry that Eugene Melnyk's own words are bad publicity.
Something that was brought up with this whole "If I have a casino tickets will be cheaper!!" Are tickets cheaper in New Jersey because Atlantic City has a casino? Are Gatineau Olympiques tickets free because there is a caino in Lac Leamy? No...why? Because tickets are priced to what the market will bear, like any other commodity. It's all about equilibirium. Owner wants X, Customer will pay X, meet in the middle...
I'll tell you whats different. Melnyks companies have started to fail and that is what happens in business and what also happens in business? -politics. This whole thing with the casino is absolute crap. None of it is real. Just look at this:
Forbes is a respectable magazine eh? They know what they're talking this is an estimate from late 2012 and several numbers have changed there where it says the players salaries are 56 million. Its several million lower now. The players salaries are about 50 million the operating costs are (it says in the article 14 million we will raise it to be fair) 16 million. This accounts for all the costs of operating the CTC. The revenue is estimated at 113 million. Those numbers don't add up that Ottawa is not making profit. I think Melnyk is paying for several losses that he had to deal with in several other ventures that failed miserably (go to Travis yost for details). This is estimated by Forbes. Forbes a magazine that has highly educated accountants and even if you want to say that they're off by 20 million(a very substantial number) they are still making 30 million dollars. There is something very wrong here.