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Sens owner Melnyk claims $94 million in losses

Aug 16, 2013, 5:36 PM EDT

Eugene Melnyk Getty Images

For those who haven’t had their fill of Eugene Melnyk today, here’s a lengthy Ottawa Citizen article on the embattled Senators owner, who claims he’s lost almost $100 million on the team since buying it in 2003.

An excerpt:

How much are the Senators costing him? It’s impossible to be definitive because, despite its high public profile, the team is a private company. Not only that, the NHL regularly warns the 30 franchise owners not to divulge details about their operations. Nevertheless, Melnyk and two of his long serving senior executives — Leeder and chief financial officer Erin Crowe — offered some insight into the team’s finances.

On Melnynk’s decade-long watch, they say, the team has generated a grand total of just $6 million on operations — that is, total revenues minus the costs associated with paying and moving the players, advertising and managing the arena. After subtracting items unrelated to operations — such as interest on the team’s debt and capital expenditures to keep the arena up-to-date — Melnyk has had to absorb cumulative cash losses of $94 million. In short, he is losing an average of $9 million to $10 million a year. And this excludes the additional interest and fees related to the debt extensions.

There’s more in the story, which is well worth a read.

Earlier today, Melnyk blasted agent J.P. Barry over the failed Daniel Alfredsson negotiations.

Related: More bad news for Sens owner Melnyk

  1. hockeyflow33 - Aug 16, 2013 at 6:01 PM

    Then sell the team and move on. You’re clearly an incompetent businessman because running a team, with a well-established fan base, it should be impossible to run this franchise without turning a profit.

    • pone27 - Aug 16, 2013 at 6:05 PM

      Lol yeah, it’s that easy you could run the team.

      • hockeyflow33 - Aug 16, 2013 at 6:07 PM

        He’s running a business not running around with superpowers. Most people are capable of running a business.

      • pone27 - Aug 16, 2013 at 6:13 PM

        Read the article.

        It’s not the team isn’t generating revenue. It’s past debt interest that he took on.

        The guy started his own pharmaceutical business and made over a billion dollars lol. He knows how to run a business.

        It’s not him that is causing the mega debts. It’s the baggage he took on. That’s where he’s stupid, for buying the team in the first place.

      • hockeyflow33 - Aug 16, 2013 at 6:21 PM

        Right, that’s part of running a business. If you buy a house that needs a new roof, don’t act shocked when you have to pay for it.

      • mp1131211 - Aug 16, 2013 at 10:33 PM

        Wait, is he shocked or are you? You are the one that is saying its impossible not to turn a profit, and then you are saying its obvious that he has to pay for the debts, meaning he can’t turn a profit.

        Anyway, these cash losses are probably totally bogus to begin with. He probably includes his own salary in that operation’s expense line which means that he’s really just paid himself 10 mil. per year less than he would have liked to.

    • abouv1 - Aug 17, 2013 at 12:10 AM

      AND even if the fanbase was weak (which is certainly isn’t) you still have the division rivals (such as Habs, Leafs) filling up that stadium. What an idiot.

  2. pone27 - Aug 16, 2013 at 6:03 PM

    And this all comes out now because Alfie wanted to take an extra million bucks? Or because the Sens wouldn’t spend an extra million bucks?

    This whole Sens stuff has become a great laugh. Mission accomplished Melynk, Alfredsson and Barry.

  3. scyounger - Aug 16, 2013 at 6:07 PM

    There goes the myth that all Canadian teams make money. The reality is owning a sports franchise is essentially a vanity project for an UHNW individual who is in it for the action (see PHT article about Hasso Plattner).

  4. earpaniac - Aug 16, 2013 at 6:09 PM

    I never believe this stuff. Most team owners were business owners before they bought their teams. And obviously successful ones as well. What person in their right mind is going to keep a company that loses $100 million?!

  5. mrpinkca - Aug 16, 2013 at 6:28 PM

    I never realized forensic investigations were so expensive.

    Maybe if they stop providing sub-socks they will be able to get back in the black.

  6. jcmeyer10 - Aug 16, 2013 at 6:45 PM

    It’s either like when the Nets tried to claim poor with some crafty accounting or, he’s losing money on other business ventures.

    That’s where my money is.

    • mp1131211 - Aug 16, 2013 at 10:35 PM

      exactly

  7. govtminion - Aug 16, 2013 at 7:11 PM

    This, too, is Alfredsson’s agent’s fault. Right?

  8. pitpenguinsrulez - Aug 16, 2013 at 7:17 PM

    CSI: Ottawa didn’t help out either

  9. lovac2 - Aug 16, 2013 at 8:51 PM

    Move Ottawa to New Orleans and problem solved.

  10. kaptaanamerica - Aug 17, 2013 at 8:51 AM

    He needs to shut up already.

  11. phxhockeyfan - Aug 17, 2013 at 10:43 AM

    Guess it’s time to move them to Seattle, Portland, Hartford, or Kansas City. Obviously the fans can’t support this team in Canada. I mean it’s always the fans fault right? Or maybe it’s the local weather? Nope, it snows there , so hockey should work right? Just using Coyotes haters logic to try to figure out why this team isn’t making money even though it’s based in Canada…Maybe the haters can now step back, pull their heads out of you know where, and think just maybe, having incompetent owners was the cause of the Coyotes struggles just like it seems to be happening in Ottawa and not the location, weather, or fan base.

  12. nygdriveforfive - Aug 17, 2013 at 11:00 AM

    Eugene’s summer of lies. This could not have been handled any worse then it was.

  13. gospitfires - Aug 17, 2013 at 12:27 PM

    didnt we have 2 lockouts so owners would stop losing money, why did he agree to the last 2 CBAs if he was to continue losing money. sounds like some “hollywood” style creative accounting.

  14. redridershoottheireyeout - Aug 17, 2013 at 2:58 PM

    No sympathy, if you are losing that kind of money in a Canadian city, especially in Ontario, you’re either lying your ass off or stupid. Considering it’s Melnyk, my bet is he is lying, again.

  15. Lupy Nazty Philthy - Aug 17, 2013 at 11:10 PM

    The same guy who’s tried to ban Leafs fan from going to Ottawa games is losing money? Nashville might want to reconsider doing this to Chicago fans. Some owners are so dumb.

  16. nuckss - Aug 19, 2013 at 2:50 PM

    According to the story in the paper, owners set the lifespan of these arenas at 30 years. Is it just me or does 30 years sound way too short a time for an arena lifespan? Maple leaf gardens was used for 60 years I think. Don’t know how old the forum was but older than 30 years.

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