SBD/July 10, 2013/Franchises

Senators' Casino Bid Denied By City Council; Melnyk Says Franchise Loses Money

Melnyk said he will not invest additional funds and capped team spending
Senators Owner Eugene Melnyk yesterday said that he "won’t be able to invest any more deeply in the team or in the city" of Ottawa after his plan to build a casino at Canadian Tire Centre was rejected by the City Council, according to David Reevely of the OTTAWA CITIZEN. Melnyk noted the Senators annually lose money and said, “If you heard a number, it would be staggering." He has set a C$50M "cap on player salaries and can’t afford to spend more." Reevely reports it "pleases Melnyk to own a hockey team and he doesn’t intend to sell or move the Senators, but without a 'third revenue stream,' his options for expanding the empire and renovating the arena are limited." Melnyk: "It puts a whole damper on my enthusiasm that I came here with 10 years ago" (OTTAWA CITIZEN, 7/10). In Ottawa, Jon Willing notes Melnyk "makes no secret that the Senators are short on revenue options while not making a profit." Melnyk said that "not having another revenue opportunity could 'stunt our growth.'" Melnyk: "We're trying to compensate that lack of capital by changing the way we conduct our hockey operations, that is, develop young players. We now have the youngest hockey team in the NHL and we try to be competitive that way" (OTTAWA SUN, 7/10). Willing notes a "gaming house would make the sports operations more financially healthy." Melnyk said that he "wants to invest in the Canadian Tire Centre in hopes of bringing more acts to Ottawa." But "without the extra money, there will be no investments." Melnyk when asked if he would leave Ottawa said, "No, no, no, no, no. I just won’t spend anymore money, that’s all" (OTTAWA SUN, 7/10).

CHANGING TIRES?
The CITIZEN's Reevely reported Melnyk "wants to renovate the Canadian Tire Centre to, among other things, have fewer suites." The "general sense is that the arena is a bit too ambitious a building for the market." Melnyk also said that he has "not intended to cut back on community work," though he "doesn't see being able to afford that kind of thing." He "doesn't want to punish people who have nothing to do with city council's decision" (OTTAWACITIZEN.com, 7/9).
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