At a ribbon cutting ceremony on Sens Mile this afternoon, Eugene Melnyk proceeded to get everyone excited for the sesaon by discussing the organization’s financial wherewithal.
You can find a full transcript of the Euge’s comments on the Senators’ official blog Inside the Senate (which by the way is maintained by Chris Lund who’s doing some excellent work for the organization), but you can read what I found interesting below.
As always, my thoughts are in bold.
On if the budget will change for potential rental players:
“We're already are over budget, I just found out yesterday, but as I said we'll do whatever it takes. We've got to be smart about it, I'm not a big fan of rentals, but if we need to fill a spot I'll leave that to Bryan (Murray) to come back and say this could make a big difference for us, especially if we need to fill a spot so that's not beyond the realm of reality that we have to live with. As things stand now we have so much depth in our organization, down in Bingo and even guys we're sending back to junior, one of our good problems is we have so many good, young players. It's tough, I was at yesterday's game and the game before and guys that you thought just weren't going to cut it all of a sudden are stepping up and it's unbelievable what's going on. I just don't know at this point.”
The Senators are already over budget on the money allocated for paying player salaries? To put this in perspective, the team has the 28th lowest salary cap payroll at $56,935,833 and the 27th lowest real money being spent on payroll at $52,377,500. Although they're not a cap floor team per se (note: the salary floor is set at $44 million), relative to their peers, they are definitely on the low-end of the scale.
Whether it’s been management or the owner, the organization has repeatedly said that it can spend and add to payroll if it sees fit. However, what are they going to say otherwise? Every time Melnyk opens his mouth, it turns into a mild PR disaster and it’s not like the organization is going to send a message to its fan base that it’s unwilling to spend the money necessary to build this once-rebuilding franchise into a contender. Eventually the time will come for ownership to shit or get off the pot and when that time comes, you can bet the fan base will stop paying attention to the organization’s lip service.
On the casino deal and his involvement with the club:
“Well, you know what I've decided to keep quiet about it for about a month, but no, my involvement remains — I'm a natural hockey fan, this is not a business but you have to treat it like a business because otherwise you're not going to have a business and you're not going to have a team. There was no plan C and we're now regrouping to see what we might be able to still do with the city's cooperation and at this point we're hoping for the best, but as far as the organization is concerned, again, the idea of moving the team is not a reality. It's not going to happen, but what is going to happen is if the salary cap is going to increase — I know it, it's just going to happen, the revenues of the league are going very, very well, they've fixed all the problem franchises and now people are spending to the cap. We spent to the cap two years in a row and didn't make the playoffs so I'm not a big fan of spending because you've just got to spend, but we need cooperation and help, it's as simple as that, because we're being outspent by everyone else and to be competitive you have to be at least in the top half of spenders. That's a stat, it's not just something I've made up, you have to be in the top half — we are — if you're not you don't have much of a chance, it's just not going to happen.”
This is vintage Brydenism - a classic class of appealing to some level of government to give the organization a break and in the process, fandangling the optics to ensure that hockey fans will be sympathetic to their pleas.
As justified as Melnyk’s vitriol towards City Council’s decision to single source the casino bidding process has been, I reserve some skepticism whether the Senators owner would reinvest the revenue generated by a casino back into his hockey team’s payroll.
The greatest fear in all of this is isn’t that the Senators aren’t financially viable and are destined to move. They simply won’t. Moving the team won’t happen because Gary Bettman won’t let it happen. I know much is made about how Melnyk saved this organization (and built up a lot of equity with this fan base in the process) from a prospective move to an area like Hamilton, but the NHL Commissioner never gets credit for doing his part to keep the franchise in this city.
No, the greatest fear is that all of the hard work and effort done by the Senators management and scouting staff throughout this rebuilding process will be for naught. If the payroll is already exhausted at $52 million, how are the Senators going to remain competitive when the cap ceiling is expected to reach the $70 million threshold next season? And moreover, how is a stringent internal budget going to entice impending free agents to remain in Ottawa if they can’t afford to surround them with talent?
This Plan C keeps getting brought up over and over again, and the City even acknowledged it saying, “When you have a Plan C, we’re ready.”
Well, considering the life expectancy of an arena is typically in the 30-40 years of service range, Plan C will hopefully center on the location of the Ottawa Senators’ next home.
On if the team is in jeopardy:
“No, if you recall 10 years ago I was the only guy standing, there was no one else. People say "Oh you could get an equity buyer" or you could do this, I don't see anybody, I don't get any phone calls. Those people don't exist, but the best thing to do is you have to turn it around and just work the problem. That's what we've got to do we've got to work the problem and without — this is a price sensitive market and we need to be able to compete and we're doing everything we can to do that. But no, there's no jeopardy there.”
This sounds like a bit of an about-face on the possibility of sharing ownership with another individual. At the time that Hockey Central broke news that Melnyk was looking at possibly selling some stake of team and Bruce Garrioch reiterated to Hockey Central’s panel that Melnyk told him that ‘He’s not that kind of guy (to take on a partner).’
So far, everything that Hockey Central said back in October of 2012 has checked out, so why should we believe Melnyk when he says that no one has shown interest in coming on board as a minority owner now?
Even at the time, Melnyk may have been the last one standing but he was far from the only one who showed interest. He may continue to try and build up equity in the fan base by portraying himself as the white knight who saved the franchise, but we can’t pretend like he was the only one who was interested. Nelson Peltz, described as a notorious tire-kicker by Elliotte Friedman, was another prospective buyer.
Having attended a Senators game during the preliminary process, Bettman said of Peltz at the time, “This doesn't mean anything is imminent and I really don't want you to think something is going to happen just because he's here. He's taking a look at (the Senators), but he's not the only one."
"Eventually the time will come for ownership to shit or get off the pot and when that time comes, you can bet the fan base will stop paying attention to the organization’s lip service."
Brilliantly put. Cyril has said the money is there to keep players, Eugene is saying the opposite. We'll know in 2015 if Spezza, Ryan, Anderson et al. are all kept on board.
(...) "I reserve some skepticism whether the Senators owner would reinvest the revenue generated by a casino back into his hockey team’s payroll."
This 100 times over. Let's face it, even if he had his casino he could still say the same thing. And then he'd need a hotel, or a shopping mall. Rich people generally want to get richer (and who doesn't like more money) but at some point Gene should just give us the straight goods...
"(...) Melnyk told him that ‘He’s not that kind of guy (to take on a partner).’"
And again on the ball. I have no inside info but it's NOT like people haven't been paying to buy into NHL franchises, even locally. Wasn't there an Ottawa investor for the Coyotes? The Panthers just got a group to buy in. The Jets have a group of magnates. Hell, worst comes to worst get MLSE to buy in and we'll have LeafsTV adds on the boards again. :p
At least Melnyk sounded sane this time, progress!