During last night’s Senators broadcast, Sportsnet’s headlining analyst Nick Kypreos had some pretty interesting comments about the financial state of the Ottawa Senators.
In retrospect, I wish I PVR’d what he said so that I could write a transcript, but the context was simple. According to Kypreos, even with the incoming money that the Senators will receive from the American national television deal, Rogers’ Canadian television deal, Ottawa’s new regional rights agreement with Bell Media, the organization will still be losing money and that they’re “not out of the woods yet”.
Not out of the woods?
To be clear, the organization is due to receive $17 to $20 million, including invasion fees, as part of Rogers’ new national broadcast agreement with the NHL. Reports suggest that the Senators’ new regional broadcast deal with Bell Media can reach upwards of $400 million over its 12-year lifespan – which means upwards of $33.3 million per season on average (note: accounting for an escalating payout, you’re at least looking at somewhere in the vicinity of $20 million in the first few years of the deal). Throw in the money the team will receive as part of the NHL’s American national contract and you’re looking at a situation in which the team is receiving north of $40 million per season in television revenue. And that’s before the Senators even sell one ticket or piece of merchandise.
How in the hell could Ottawa still be losing money?
Kypreos then insinuated that the Senators were not done in their fight for getting a casino and they will revisit this possibility within the near future.
Ah yes, the casino.
It’s worth noting that in appearance on TSN 1050’s ‘The Drive’, Eugene Melnyk discussed the need to bring another attraction to the neighbouring area near the Canadian Tire Centre and how he still trying to cooperate with the City of Ottawa to make his desires come to fruition.
“You know, you could make that argument and it’s a good argument to make. Does (the arena location) hinder us? I think to a certain extent it does. It’s an effort to get out to Kanata and that’s one of the reasons why I’ve been pushing very, very hard and very publicly to try to expand the activities out in Kanata. I know that the residential areas and a lot of the commercial and business and industrial areas have grown, but we need more entertainment out there. We need more than just one place to go to and I’m trying desperately to do that. If I can get some more cooperation, it could get accomplished. But, I would say it’s a disadvantage but it’s not a disadvantage that can’t be changed. It can turn because I’ve seen other places where… for example, if you go just outside of… to Baltimore. They took a place that was a dump area and they turned it into one of the most beautiful parts of Baltimore. So you can do a lot of things, it just takes time. It takes cooperation from City Hall. It takes cooperation from a lot of people to get this done and we’re going to keep plugging away until we do.”
If Melnyk is still dead set on getting his casino, it’s naturally in his best interests to portray the Senators’ financial situation as challenging so that he can rummage up the support of city council to protect the best interests of his hockey team.
Of course it works in Melnyk’s favour that Ottawa’s reputation for being a walk up crowd kind of sports town has taken a hit with the Senators this season.
Despite the organization has trumpeted its growing season ticket holder base that has surpassed the 12,000 benchmark, the organization has struggled to fill the building on many nights this season.
Could a prospective casino help boost attendance and entice more people to come to the west end and go enjoy a Sens game?
That’s what Melnyk believes and with it, there is this underlying assumption that the casino will make the Senators more viable.
Considering Melnyk has repeatedly discussed how he runs each of his businesses separately, fans expecting the owner to redirect profits from this prospective revenue stream into the Senators’ bottom line (and ultimately the Senators’ player payroll) should probably reconsider that line of thought.
Didn't Kypreos give a rather backhanded comment a few months back, when the team was struggling mightily on the ice, about the then potential TV deal being questionable or lacking if the Sens continued to struggle to get wins? At the time, seemed more like a child pouting since it was clear there was a good chance Rogers would lose the regional broadcast rights. Now, lo and behold, they have, and Kypreos, there employee, goes out and suggests the Sens are still in dire straights...
I *hope* this is just another example of Melnyk changing his tune to suit his audience/end goal, which has become somewhat pathological and painfully transparent. He says the team is profitable if he's trying to come off as a stable owner; it's haemorrhaging money if he wants some sort of government concession in his favour. I hope he's playing poor to get his casino and that's it. What I hope it's not, is him using the windfall not to improve the team but to prop up other ventures/pay off personal debts.
But either way, the idea that the team is actually losing money, given the what we know about the TV deals and player salaries, is completely laughable. Cabbage 1, Kypreos 0.
I read your blog to avoid Kypreos, it demeans what you do to even mention his hockey knowledge. Please, move on.
Interestingly and kinda on topic, I picked up Empire of Ice, about the Pacific Coast Hockey Association (PCHA) and one of the things I found topical was that even then the team owners (who had 3,000-5,000 seat rinks) cried poor constantly. They weren't making any money, they couldn't pay the players, they couldn't compete with the PCHA's offers, they'd fold. Some of them did, of course. Quebec, Seattle, one of the Toronto teams but the Great War and Influenza helped some of that. Anyway, Melnyk has to cry poor so he can get his casino. I doubt he WILL get it, Rideau Carleton is settled if I recall, but he'll keep saying he's poor. As long as the team keeps its best players...because there are NO excuses for losing Ryan, Spezza and so on for money reasons!
I wonder what kind of sources Kiper has?? Sens' s brass would never open their books or mouths to a small time like him
@6thSens He is just using the "poor me" argument as leverage to try and get his casino. A casino will do nothing for the hockey team.
@6thSens good read
@6thSens Someone should send Melnyk pictures of what used to be around CTC 15 yrs ago to now. The area has grown organically.
@6thSens I think you are bang on with your assessment here.
@6thSens Kypreos better watch his step...he's being fed white lies & propaganda...he's inside with the wrong guys...
@jumetra Well said. It seems like Kypreos probably did some internet research and didn't really analyze the situation in Ottawa before making those comments.
@Fffeisty wouldn't be the first sports owner to do that to get what he seeks.
@6thSens Also, the year Bryden went bankrupt ended up being one of the team's best years. Ownership $$ didn't impact the team that yr.
@6thSens Of course not. Everyone freaking out every time he says the team has no money is playing right into his hands.
@6thSens (not that bankruptcy is my preferred method of operation)