On the Ottawa Senators’ new financial reality

About a year and a half ago, Ottawa Senators owner Eugene Melnyk phoned in to his favourite Toronto radio station to talk trade deadline and past mistakes.

On the Ottawa Senators’ new financial reality
Bryan Murray (Wayne Cuddington/Ottawa Citizen)

About a year and a half ago, Ottawa Senators owner Eugene Melnyk phoned in to his favourite Toronto radio station to talk trade deadline and past mistakes.

The surprising Senators were well on their way to a playoff berth just one season after shedding a clump of expensive veteran contracts and declaring they were in full retool mode following a last-place finish in the Northeast Division.

The days of throwing money around without regard for the bottom line like a money-soaked European soccer club owner trying to buy a championship were over. The Senators would take their time and build from within, with the ultimate goal of being competitive every year.

Melnyk named the team he wanted the Senators to emulate, too: The Detroit Red Wings.

“Every year, they’re somewhere in the hunt,” he said at the time. “They don’t win every year, but they’re certainly in the hunt, and that’s all the fans ask for.”

So it’s more than a bit stinging that former captain Daniel Alfredsson expressed those exact same sentiments on his way to the Motor City, his preferred alternative to “playing it out” with a team that went just as far in the playoffs last spring.

It was a sobering reminder of how times have changed since Melnyk took over the team 10 years ago this month, pledging to spend whatever it took to bring a Stanley Cup to the capital.

Because while the Senators are a lot like the Detroit Red Wings — in that they now excel with homegrown talent and play a puck possession game under Jack Adams Trophy-winning coach Paul MacLean (who was an assistant with the Wings when he was hired here) — they differ in one key way.

Money.

The Senators balked at Alfredsson’s initial contract demands, not only because they felt the number was too high, but because it would preclude them from adding another top six forward under a self-imposed internal cap on player salaries in the low $50 million range.

Meanwhile, the Wings did pay asking and then added a top-six forward of their own in one of the summer’s most sought-after free agents, centre Stephen Weiss. Going into this season, they have $67 million in real dollars committed to the cause of bringing the Cup back to Detroit.

After the Senators get restricted free agent Jared Cowen under contract, they’ll come in around $53 million.

As Senators owner Eugene Melnyk told the Citizen in an exclusive interview Friday, the days of Ottawa spending with the big boys are over.

“I think where we are now is … it’s a very fine, a fine line. It’s very easy to sit back and say, ‘oh, why doesn’t Melnyk spend more? He doesn’t spend, he doesn’t spend.’ Well, hold on a second, first things first, we spend right down the centre,” he said, referring to the salary cap range (the top of the cap is just over $64 million, the bottom $44 million).

“We’re not the New York Rangers, we’re not the Toronto Maple Leafs, and I’m trying to keep ticket prices reasonable, because there’s a very delicate balance between ticket pricing, attendance and being able to put a competitive team (on the ice).”

The internal cap has become the source of some anger for fans who insist you must spend close to the cap to truly compete in the National Hockey League.

If the Senators had just agreed to Alfredsson’s initial contract demands and ponied up a couple million dollars more per season, he’d still be here. Furthermore, if they’d done that and added Bobby Ryan, they’d be a legitimate Stanley Cup contender.

Melnyk’s response?

“If we want to even spend a few extra million dollars, that just goes right out of my pocket. It’s a business, people have to understand. This is not philanthropy. I love the team, but there’s only so much you can bear.”

Here’s where the franchise is walking a fine line, charity work aside.

Ottawa Senators fans demand a competitive team — and they vote with their wallets. Even in good on-ice times, the market is highly sensitive to price. Yes, the team finished sixth in league attendance last season, but the annual Team Marketing Report has its average ticket price sixth-lowest — almost $20 below the league average (this doesn’t take building size into account).

There’s no spinning the fact the Senators are at a significant competitive disadvantage due to their budget, and if that eventually contributes to a team struggling to make the playoffs every year, there will be significant consequences at the gate.

Put another way, $10 million worth of cap space is the equivalent of an all-star defenceman and top six winger. That can turn a loser into a winner pretty quickly.

Which brings us to one area Melnyk and fans can probably agree on: The Ottawa Senators are extremely fortunate to have a resourceful veteran like Bryan Murray at the helm of hockey operations.

He’s taken a relative shoestring budget (the Senators have the third-lowest cap hit in the league, according to CapGeek.com) and managed to ice a team that not only came within 11 wins of the Stanley Cup this spring, but had the kind of depth that allowed them to trade for a player of Ryan’s stature.

Said Melnyk of Murray: “He could easily come back and say, ‘you know, I really can’t do anything for you unless you spend the cap.’ But he doesn’t, he says, ‘if I have $50-51 million to spend, that’s good enough.’ But we have to be fiscally responsible.”

Last season, the young Senators earned the moniker Pesky Sens for overcoming what should have been a devastating string of injuries to make the playoffs.

Now it’s on Murray to overcome the budgetary limitations that place them well behind the league’s power players, evolving Pesky Sens from one-season catchphrase into organizational identity.

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