Ownership Questions Linger in Ottawa

SensChirp July 26, 2017 1,590
Ownership Questions Linger in Ottawa

On August 26, 2003, Eugene Melnyk officially became the Owner of the Ottawa Senators.

When the Toronto-born billionaire arrived in Ottawa 14 long years ago, he was seen as a saviour of sorts. A deep-pocketed businessman with a passion for the game that would bring much-needed stability to the franchise. Melnyk rolled into town at a time when the state of hockey in Ottawa was anything but secure.

Bankruptcy protection, talk of relocation, unpaid players and a for sale signing hanging in the window- this sort of thing was common place in Ottawa until Melnyk came along.

And for a while, there was stability.

On the ice, the Senators were a perennial contender.  Consistently among the top ranked teams in the league and regularly in the playoffs.  A team that was once struggling to pay its players was at times among the top spending teams in the league.  The building was packed and a tenuous and unpredictable organization and market was suddenly thriving.

But since 2012, financial limitations have been a reality for this team.

Budget has become a commonly uttered word by fans and by management.  There is an understanding that the free-spending days of Melnyk’s early time in Ottawa are long gone.  This is a small-market team, with a somewhat fickle fan base and too few season ticket holders, that must carefully monitor its spending at all times. Spending not just in the form of player salaries but overall operations.  This certainly isn’t unique to Ottawa but it is somewhat unusual for a Canadian market.

Melnyk himself claims to have lost a staggering $94 million during his time as Owner. And that was more than four years ago.  Behind the scenes, there have been steady stories of unrest including high-profile firings including Chief Marketing Officer Peter O’Leary and long time President Cyril Leeder.

The Senators are coming off a lengthy playoff run and currently find themselves in the Top 10 in total salaries for next season but this off-season, speculation of instability at the top persists.

There have been some rumours suggesting that Eugene Melnyk may finally be willing to take on a partner which is something he has been reluctant to do in the past. Other speculation indicates that there may be one or two groups positioning themselves for an outright bid for the team. There has even been talk that the financial backers of the DCDLS LeBreton bid may still be lurking around the team.

For now, it’s nothing more than rumours. And it’s worth pointing out that talk like this has followed the team for years.

All this takes on added significance with LeBreton project looming. The Ottawa Senators-backed Rendezvous LeBreton bid was identified as the preferred proponent back in November which means they can now officially enter in formal talks with the National Capital Commission.

Those negotiations have been presumably playing out behind closed doors but back in April we got our first indication that public money might be needed to make that project happen.

The NCC will obviously want to see a clear vision for the site during those negotiations but also you would think they want some level of certainty related to the future of the hockey team, which will be central in the development of that land.

In the past, Eugene Melnyk has made it quite clear that he has absolutely no interest in selling the team.

But eventually, you wonder if his own financial situation combined with the steadily increasing value of the franchise may force him into a spot where he has to consider his options.  It would be extremely difficult to leave with the prospect of a downtown arena finally a reality but that’s still at least five years away (based on the original projection) and maybe more.

On the ice, it looks like the Senators are in a great spot.

They have a young core fresh off an appearance in the Eastern Conference Finals. They have talent through the line up and some impressive young prospects. The amount spent on players has crept up gradually over the last few years. In Erik Karlsson, they have one of the league’s most dynamic players. He’ll be looking for a massive signing-bonus filled contract next summer, by the way.

For everything good about the on-ice product, those lingering questions about Ownership persist among fans and remain a regular topic in the rumour mill.

With the move downtown on the horizon, the next five years will be some of the most important in the history of the Ottawa Senators.

On the ice, the team needs to continue to take steps towards building a winner.  On the business and marketing side of things, the brand is in desperate need of a refresh and new President Tom Anselmi seems to recognize that fact. The fan base and more specifically, the season ticket holder base needs to grow.

And most importantly- the franchise needs stability, predictability and security at the top.  Eugene Melnyk provided the franchise with all of those elements when he arrived in Ottawa just 14 years ago.

Whether or not he alone can provide that in the future remains to be seen.